Initition of Section 302 Investigation and Request for Public Comment; Practices of the Government of Brazil Regarding Trade and Investment in the Auto Sector

OFFICE OF THE UNITED STATES TRADE REPRESENTATIVE

[Docket No. 301-110]

Initition of Section 302 Investigation and Request for Public

Comment; Practices of the Government of Brazil Regarding Trade and

Investment in the Auto Sector

agency: Office of the United States Trade Representative.

action: Notice of initiation of investigation; request for written

comments.

-----------------------------------------------------------------------

summary: The Acting United States Trade Representative (USTR) has

initiated an investigation under section 302(b)(1) of the Trade Act of

1974, as amended (the Trade Act), with respect to certain acts,

policies and practices of the Government of Brazil concerning the grant

of tariff-reduction benefits contingent on satisfying certain export

performance and domestic content requirements. The United States

alleges that these acts, policies and practices are inconsistent with

certain provisions of the General Agreement on Tariffs and Trade 1994

(GATT 1994), the Agreement on Trade-Related Investment Measures (TRIMS

Agreement), and the Agreement on Subsidies and Countervailing Measures

(SCM Agreement), each administered by the World Trade Organization

(WTO). USTR invites written comments from the public on the matter

being investigated.

dates: This investigation was initiated on October 11, 1996. Written

comments from the public are due on or before noon on Thursday,

November 14, 1996.

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

Street, N.W., Washington, DC 20508.

for further information contact: Karen Chopra, Deputy Assistant U.S.

Trade Representative for the Western Hemisphere, (202) 395-5190, or

Amelia Porges, Senior Counsel for Dispute Settlement, (202) 395-7305.

supplementary information: Section 302(b)(1) of the Trade Act) (19

U.S.C. 2412(b)(1)), authorizes the USTR to initiate an investigation

under chapter I of Title III of the Trade Act (commonly referred to as

``section 301'') with respect any matter in order to determine whether

the matter is actionable under section 301. Matters actionable under

section 301 include, inter alia, the denial of rights of the United

States under a trade agreement, or acts, policies, and practices of a

foreign country that violate or are inconsistent with the provisions

of, or otherwise deny benefits to the United States under, any trade

agreement.

Investigation and Consultations

On October 11, 1996, having consulted with the appropriate private

sector advisory committees, the USTR determined that an investigation

should initiated to determine whether certain acts, policies and

practices of Brazil concerning trade and investment in the auto sector

are actionable under section 301(a). Brazil has adopted since December

1995 a series of decrees that provide that manufacturers of automobiles

may get reductions in duties on inputs and assembled vehicles if they

maintain a specified level of local content, and export an offsetting

amount of finished vehicles and parts and maintain specified ratios of

imported to domestic capital goods and of imported to domestic inputs.

Brazil also provides more favorable treatment to automobiles and auto

parts from Argentina.

The USTR believes that these acts, policies and practices of Brazil

are inconsistent with certain aspects of the GATT 1994, the TRIMs

Agreement, and the SCM Agreement. In particular, the program appears to

be inconsistent with the most-favored-nation treatment and national

treatment provisions found in Articles I and III of the GATT 1994; the

prohibition in Article 2 of the TRIMs Agreement on investment measures

that are inconsistent with the national treatment and quantitative

restriction provisions in the GATT 1994, and the prohibition on certain

subsidies in Articles 3 and 28.2 of the SCM Agreement.

In August 1996 the USTR invoked WTO dispute procedures and held

consultations with Brazil regarding its auto regime. As a result of

these consultations, Brazil has agreed to enter into intensive talks

with the United States. The goal of these talks is the removal of the

discriminatory impact of the Brazilian practices on U.S. exports.

Pending the outcome of these talks the USTR has decided pursuant to

section 303(b)(1)(A) of the Trade Act to delay for up to 90 days

requesting the consultations required under section 303(a) of the Trade

Act for the purpose of ensuring an adequate basis for such

consultations. Pursuant to section 303(b)(1)(B) of the Trade Act the

time limitations for making the determinations required by section 304

of the Trade Act will be extended for the period of the delay.

Public Comment: Requirements for Submissions

Interested persons are invited to submit written comments

concerning the acts, policies and practices of Brazil which are the

subject of this investigation, the amount of burden or restriction on

U.S. commerce caused by these acts, policies and practices, and the

determinations required under section 304 of the Trade Act. Comments

must be filed in accordance with the requirements set forth in 15 CFR

2006.8(b) (55 FR 20593) and must be filed on or before noon on

Thursday,

[[Page 54486]]

November 14, 1996. Comments must be in English and provided in twenty

copies to: Sybia Harrison, Staff Assistant to the Section 301

Committee, Room 223, Office of the U.S. Trade Representative, 600 17th

Street, NW, Washington, D.C. 20508.

Comments will be placed in a file (Docket 301-110) 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. Confidential business information submitted in accordance with

15 CFR 2006.15 must be clearly marked ``BUSINESS CONFIDENTIAL'' in a

contrasting color ink at the top of each page on each of 20 copies, and

must be accompanied by a nonconfidential summary of the confidential

information. The nonconfidential summary shall be placed in the file

that is open to public inspection. An appointment to review the docket

(Docket No. 301-110) may be made by calling Brenda Webb (202) 395-6186.

The USTR Reading Room is open to the public from 10:00 a.m. to 12 noon

and 1:00 p.m. to 4:00 p.m., Monday through Friday, and is located in

Room 101.

Irving A. Williamson,

Chairman, Section 301 Committee.

[FR Doc. 96-26711 Filed 10-17-96; 8:45 am]

BILLING CODE 3190-01-M