Notice of Determination and Request for Public Comment Concerning Proposed Determination of Action Pursuant to Section 301: Barriers to Access to the Auto Parts Replacement Market in Japan

OFFICE OF THE UNITED STATES TRADE REPRESENTATIVE

[Docket No. 301-93]

Notice of Determination and Request for Public Comment Concerning

Proposed Determination of Action Pursuant to Section 301: Barriers to

Access to the Auto Parts Replacement Market in Japan

AGENCY: Office of the United States Trade Representative.

ACTION: Notice of determination under section 304(a)(1)(A) of the Trade

Act of 1974, as amended (Trade Act) (19 U.S.C. 2414(a)(1)(A)); notice

of proposed determination of action to be taken under section

304(a)(1)(B) of the Trade Act and notice of public hearing and request

for public comment pursuant to section 304(b) of the Trade Act.

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SUMMARY: The United States Trade Representative (USTR) has determined

pursuant to section 304(a)(1)(A)(ii) of the Trade Act that certain

Acts, policies and practices of Japan that restrict or deny suppliers

of U.S. auto parts access to the auto parts replacement and accessories

market (``after-market'') in Japan are unreasonable and discriminatory

and burden or restrict U.S. commerce. The USTR is seeking public

comment and will hold a public hearing on June 8 and 9, 1995, regarding

the proposed determination pursuant to section 304(a)(1)(B) on the

appropriate action under section 301 being considered in response to

these acts, policies and practices.

DATES: Written comments on the determination are due by noon, Monday,

June 19, 1995. Requests to testify at the hearing must be submitted by

noon, Thursday, May 25, 1995. Written testimony is due by noon, Friday,

June 2, 1995, and written rebuttals are due by noon, Wednesday, June

21, 1995.

ADDRESSES: Office of the United States Trade Representative, 600 17th

Street NW., Washington, DC 20506.

FOR FURTHER INFORMATION CONTACT:

David Burns, Senior Advisor for Japan, (202) 395-5050, or James

Southwick, Assistant General Counsel, (202) 395-7203. Questions about

the public hearing, written testimony and written comments should be

directed to Sybia Harrison, Staff Assistant to Section 301 Committee,

(202) 395-3432.

SUPPLEMENTARY INFORMATION: On October 1, 1994, the USTR initiated an

investigation pursuant to section 302(b) of the Trade Act to determine

whether specific barriers to access to the after-market for auto parts

in Japan are unreasonable or discriminatory and burden or restrict U.S.

commerce. By Federal Register notice dated October 13, 1994 (59 FR

52034), the USTR requested public comment on the issues raised in the

investigation. The comment period was subsequently extended by a

Federal Register notice dated November 10, 1994 (59 FR 56099).

Officials of the Office of the USTR and other United States

agencies have conducted extensive consultations with Japanese

government officials concerning these market access barriers, but

negotiations have failed to resolve the issues under investigation.

Consequently, on May 10, 1995, the USTR pursuant to section

304(a)(1)(A)(ii) of the Trade Act determined that certain acts,

policies and practices of Japan that restrict or deny suppliers of U.S.

auto parts access to the auto parts replacement and accessories market

(``after-market'') in Japan are unreasonable and discriminatory and

burden or restrict U.S. commerce.

Reasons for Determination

The Japanese market for replacement auto parts is restricted by a

complex system that is not reasonable or justifiable. This system

channels most repair work to government-certified garages that use very

few foreign parts, and the system restricts the development of other

garages more likely to carry and use foreign parts. In addition, even

minor additions of accessories to motor vehicles require a full vehicle

inspection and tax payment, which severely limits opportunities for

U.S. automotive accessories suppliers.

The United States pressed Japan for broad reform in the

aftermarket. The U.S. proposals did not ask for reduction of safety or

environmental standards, but for measures that would allow for

substantially more repair work to be performed outside the certified

garages, and therefore would open up opportunities for foreign

suppliers. The Government of Japan was unwilling to make changes to key

elements of the system which restricts opportunities for U.S. and other

foreign parts suppliers.

Proposed Determination on Appropriate Action

If the USTR makes an affirmative determination pursuant to section

304(a)(1)(A)(ii) of the Trade Act, pursuant to section 304(a)(1)(B) the

USTR also must determine what action, if any, by the United States is

appropriate. If the USTR determines that action is appropriate, section

301(b) of the Trade Act directs the USTR to take all appropriate and

feasible action to obtain the elimination of the unreasonable or

discriminatory act, policy or practice.

Therefore, the USTR proposes to take the following action, pursuant

to the authority provided by section 301(c)(1)(B) of the Trade Act:

To impose prohibitive (100 percent ad valorem) duties upon luxury-

type motor vehicles from Japan. The increased tariffs will apply to the

following motor cars and other motor vehicles principally designed for

the transport of persons provided for in heading 8703 of the Harmonized

Tariff Schedule of the United States (HTS):

(1) Motor vehicles having 4 doors, a wheelbase more than 260 cm

(102.4 inches) but not more than 263 cm (103.6 inches), a curb weight

more than 1,495 kg (3,295.9 pounds), a height not more than 138 cm

(54.3 inches), and a spark-ignition internal combustion reciprocating

piston engine with 6 or more cylinders, having a total cylinder

capacity exceeding 2,900 cc or a rotary piston engine (provided for in

HTS subheadings 8703.23, 8703.24 or 8703.90); and

(2) Motor vehicles having a wheelbase exceeding 266 cm (104.7

inches), a curb weight more than 1,365 kg (3009.3 pounds), a height not

more than 145 cm (57 inches), and either a spark-ignition

[[Page 26746]] internal combustion reciprocating piston engine having a

total cylinder capacity exceeding 2,900 cc or a rotary piston engine

(provided for in HTS subheadings 8703.23, 8703.24 or 8703.90).

The USTR has asked the Customs Service to withhold liquidation of

the entries of the goods identified above which are entered, or

withdrawn from warehouse for consumption, on or after May 20, 1995. If

the proposed duty increases enter into effect, the USTR intends to make

these increases effective as of May 20, 1995.

In making this determination, the USTR will consider public

comments submitted in accordance with the requirements set forth below.

Public Comment on Proposed Determination; Hearing Participation

In accordance with section 304(b) of the Trade Act, the USTR

invites all interested persons to provide written comments on the

proposed determination. Comments may address: (1) The appropriateness

of subjecting the motor vehicles described above to an increase in

duties; (2) the levels at which duties should be set; and (3) the

degree to which an increase in duties might have an adverse effect on

U.S. consumers. Written comments are due by noon, Monday, June 19,

1995.

The USTR also will consider the written, oral, and rebuttal

comments submitted in the context of public hearings held pursuant to

section 304(b) of the Trade Act and in accordance with 15 CFR 2006.7

through 2006.9. The hearings will commence at 10 a.m. on Thursday, June

8, 1995, and continue on Friday, June 9, 1995, if necessary. The

hearings will be held in Room 100 at the U.S. International Trade

Commission, 500 E Street, SW., Washington, DC 20436.

Request to Testify: Interested persons wishing to testify orally at

the hearings must provide a written request to do so by noon, Thursday,

May 25, 1995, to Sybia Harrison, Staff Assistant to the Section 301

Committee, Office of the U.S. Trade Representative, 600 17th Street

NW., Washington, DC 20506. Requests to testify must include the

following information: (1) Name, address, telephone number, and firm or

affiliation of the person wishing to testify; and (2) a brief summary

of the comments to be presented. Requests to testify must conform to

the requirements of 15 CFR 2006.8(a). After the Chairman of the Section

301 Committee considers the request to present oral testimony, Ms.

Harrison will notify the applicant of the time of his or her testimony.

Remarks at the hearing will be limited to 5 minutes.

Written Testimony and Rebuttal Briefs: In addition, persons

presenting oral testimony must submit their complete written testimony

by noon, Friday, June 2, 1995. In order to assure each party an

opportunity to contest the information provided by other parties, USTR

will entertain rebuttal briefs filed by any party by noon, Wednesday

June 21, 1995. In accordance with 15 CFR 2006.8(c), rebuttal briefs

should be strictly limited to demonstrating errors of fact or analysis

not pointed out in the briefs or hearing and should be as concise as

possible.

Requirements for Submissions: Written comments on the proposed

determination, written testimony, and rebuttal briefs must be filed in

accordance with thr requirements set forth in 15 CFR 2006.8(b).

Comments 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: Auto Parts

Investigation, Room 223, USTR, 600 17th St NW., Washington, DC 20506.

Written comments, testimony, and briefs will be placed in a file

(Docket 301-93) 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

confidential business 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 the twenty

copies and must be accompanied by a nonconfidential summary of the

confidential information. The nonconfidential summary will be placed in

the Docket open to public inspection. An appointment to review the

docket may be made by calling Brenda Webb (202) 395-6186. The USTR

Reading room is open to the public from 10 a.m. to 12 noon and 1 p.m.

to 4 p.m., Monday through Friday, and is located in: Room 101, Office

of the United States Trade Representative, 600 17th Street NW.,

Washington, DC 20506.

Irving A. Williamson,

Chairman, Section 301 Committee.

[FR Doc. 95-12344 Filed 5-16-95; 8:45 am]

BILLING CODE 3190-01-M