Initiation of the Second Round of Accelerated Tariff Elimination Talks Under Provisions of the North American Free Trade Agreement

OFFICE OF THE UNITED STATES TRADE REPRESENTATIVE

Initiation of the Second Round of Accelerated Tariff Elimination

Talks Under Provisions of the North American Free Trade Agreement

AGENCY: Office of the United States Trade Representative.

ACTION: Notification of an opportunity to file petitions requesting

accelerated tariff elimination under the North American Free Trade

Agreement.

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SUMMARY: Section 201(b) of the North American Free Trade Agreement

Implementation Act of 1993 (``the Act'') grants the President, subject

to the consultation and lay-over requirements of section 103(a) of the

Act, the authority to proclaim any accelerated schedule for duty

elimination that may be agreed to by the United States, Mexico and

Canada under Article 302(3) of the North American Free Trade Agreement

(``the NAFTA''). This notice opens the second round of consideration

for accelerated tariff elimination under the NAFTA, and describes the

procedure for filing petitions. The closing date for filing petitions

requesting consideration is June 13, 1997. The three NAFTA governments

will announce the products being provided accelerated reductions on or

before December 15, 1997, with implementation planned for early 1998.

FOR FURTHER INFORMATION CONTACT: Office of Western Hemisphere Affairs,

Office of the United States Trade Representative, Room 522, 600 17th

Street, N.W., Washington, D.C. 20508; telephone: (202) 395-3412; fax:

(202) 395-9675.

SUPPLEMENTARY INFORMATION: Annex 302.2 of the NAFTA establishes the

timetable for the staged elimination of tariffs on all dutiable goods

traded between Mexico and the United States and most dutiable goods

traded between Mexico and Canada. Duties on goods traded between the

United States and Canada remain subject to the tariff elimination

timetables agreed to under the U.S-Canada Free Trade Agreement (CFTA).

All goods covered by the tariff elimination provisions agreed to by the

United States and Canada will be duty free as of January 1, 1998.

Article 302(3) of the NAFTA provides that, at the request of any

party to the NAFTA, the parties shall consult to consider accelerating

the elimination of customs duties set out in the Agreement. Section

201(b) of the Act grants the President, subject to certain consultation

and layover requirements, the authority to proclaim any such agreed

acceleration of the elimination of a U.S. duty. The Statement of

Administrative Action (SAA) which was approved by the Congress along

with the NAFTA and Sec. 201(b)(2) of the Act state that the President

may not consider a request to accelerate the staging of duty reductions

for an article

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for which the U.S. tariff phaseout period is more than 10 years if a

request for acceleration with respect to such an article has been

considered and denied in the preceding 3 calendar years. (That is, a

request denied in 1997 cannot be reconsidered before 2001.) However, no

such products were considered during the first NAFTA tariff

acceleration round. No decision has been made at this time regarding a

third round.

Based on the above, and on the experience gained in conducting the

prior round, the following procedures will apply to the second tariff

acceleration round, subject to future modifications.

I. Articles Which May Be Petitioned

Petitions for accelerated tariff elimination may be filed only for

articles for which the duty is currently scheduled to be eliminated

after January 1, 1998, as noted in Annex 302.2 of the NAFTA, and

modified by the first tariff acceleration round and any addition tariff

reductions implemented by each of the parties. Requests may be made to

the United States government with respect to trade in originating

products between the United States and Mexico. As noted above, all

applicable trade between the United States and Canada will be duty free

on January 1, 1998, that is, before the conclusion of the second tariff

acceleration round. Therefore, no U.S.-Canada requests will be

considered. In addition, no U.S.-Mexico requests will be considered for

products with tariff elimination currently scheduled for January 1,

1998. Finally, requests for elimination of duties between Mexico and

Canada can be requested through the United States government only when

U.S.-Mexico duties are also subject to that request. Requests for

accelerated duty elimination on trade solely between Mexico and Canada

should be made to the governments of Mexico or Canada.

USTR will generally not act on a petition unless most U.S.

producers of that particular product consider the request for

acceleration to be non-controversial. Petitions may request

acceleration of reductions by one or all of the NAFTA parties.

Normally, the acceleration of the elimination of tariffs will be

pursued on a reciprocal basis. Since the consultations will be

trinational, petitions requesting acceleration by other than all

parties must note the reasons for excluding any party.

Regarding Products Subject to Petitions Filed in 1994

(1) Products considered for, but not granted, accelerated

reductions are subject to the limitations noted above. If met,

petitions submitted in 1994 can be considered in this second round.

However, the NAFTA parties will consider petitions on previously

rejected requests only when there is evidence that conditions have

changed sufficiently since the prior decision to merit reconsideration.

As for any other request, petitioners must file new, complete,

petitions to have such requests considered.

(2) Products subject to petitions filed in 1994 but not considered

in the first round can be considered in the second round, if they will

continue to be dutiable after January 1, 1998. However, due to the time

elapsed since these petitions were received, petitioners are asked to

file new petitions to confirm their continued interest and provide

updated information.

II. Timetable

Petitions requesting consideration of accelerated duty elimination

are due at USTR by 5:00 p.m., June 13, 1997. USTR will then published a

preliminary list of the products to be presented to Mexico and request

comments on this list as specified in that notice. Trinational meetings

will begin shortly thereafter, with the announcement of the agreed

package of accelerated tariffs to be made by December 15, 1997.

Implementation under the applicable domestic procedures will then begin

in each country, and should be completed in approximately 90 days.

Advice from the United States International Trade Commission (USITC)

and the Trade Advisory Committee will also be requested for all

products on the preliminary list.

III. Format of Petitions

A model petition format and the information requested is shown in

the annex to this notice. In order to be considered, petitions for

accelerated tariff eliminations must conform to the model format and

contain all essential data elements.

If a submission contains business confidential material, the

specific material must be so identified in order to receive

confidential treatment. In such cases, both a non-confidential and a

business confidential version of the petition, each clearly marked as

to its status, must be submitted. None of the information provided in

sections A and B of the petition may be designated business

confidential.

A copy of the petition format and this notice can be obtained from

the Office of the Western Hemisphere, Office of the United States Trade

Representative (USTR), Room 522, 600 17th Street, NW, Washington, D.C.

20508, telephone (202) 395-3412. Petitioners are encouraged to submit

requests to USTR via the Internet or on a properly formatted computer

disk. The form, and instructions for electronic submissions can be

obtained, beginning May 20, 1997, from the USTR Internet home page:

www.ustr.gov under the ``What's New'' heading.

IV. General Instructions

1. Each harmonized tariff system (HTS) number must have a separate

petition; that is, each petition may request accelerated tariff

elimination for a single product only. All information contained in a

petition must pertain solely to the single product that is the subject

of the petition. A single petition requesting acceleration on more than

one product cannot be considered.

2. Product description (number 5). Petitions for acceleration of an

entire 8-digit tariff subheading must provide the HTS descriptions for

the United States and Mexico, and for Canada when relevant. Whenever

possible, petitions should be for the entire 8-digit tariff line.

However, petitions for acceleration for only certain products

classified within an 8-digit subheading can be considered when

necessary. Such petitions must provide the following additional

information in Section C:

a. A full and complete description of the article;

b. The article's principal use in the United States;

c. The reason the full tariff line should not be considered;

d. The article's commercial, common or technical name or

designation; and, as appropriate:

(1) Illustrative literature;

(2) The relative quantity by weight of each component materials for

articles composed of two or more materials;

(3) Chemical analysis, flow charts, CAS number, etc.;

e. Any other information that may assist in determining the

appropriate tariff classification of the article;

f. A statement of the reason(s) the petitioner believes that the

article is classified in the 8-digit tariff subheading which the

petitioner has entered in number 7 of the petition (e.g., outstanding

classification by Customs or a classification by Customs on liquidated

entries of the article in question) and;

g. A copy of any rulings issued by the U.S. Customs Service or the

appropriate authorities in the Government of Mexico specifying the

classification of the petitioned product in the Harmonized Tariff

Schedule of the United States, and the Tariff Schedule of Mexico.

[[Page 25994]]

h. A statement of the reasons why accelerated duty elimination

should be considered for only a portion of the 8-digit tariff

subheading. Petitions for products within an 8-digit which do not

provide the above information cannot be considered. Brand names or

trademarks are not acceptable as product descriptions for this purpose

and their use may result in rejection of the petition.

3. 8-digit tariff subheading (number 6). Petitions for acceleration

of tariff elimination under the 1997 U.S. and Mexican tariff schedules

must provide the correct applicable 8-digit tariff subheading number

for each of the tariff schedules. As noted above, not more than one 8-

digit subheading in each tariff schedule must be listed in a petition.

The tariff subheading is requested for Canada in the event Mexico and

Canada consider acceleration. Commodity numbers contained in Schedule

B, Statistical Classification of Domestic and Foreign Commodities

Exported from the United States, cannot be substituted for the number

of the 8-digit tariff subheading in the United States, Mexican or

Canadian tariff schedules. Petitions using Schedule B commodity numbers

for this purpose cannot be considered. Petitioners are responsible for

assuring that the products of interest are classified in the tariff

subheading being petitioned. We recommend that petitions include the

information described in paragraph 3 above on representative products

for which the petitioner is seeking accelerated tariff elimination.

4. Petitioner/product relationship (number 7). At least one item

must be checked. If item ``e'', ``j'' or ``o'' is checked, specify the

relationship or interest that the petitioner has in the product.

5. Supplemental information (Section C). This section of the

petition should be used to provide information supplementing that

provided in numbers 1 through 11 (specify the relevant number(s) being

supplemented), or any other relevant information that may assist in

consideration of the petition.

6. Submission of petitions.

a. Electronic submissions: USTR prefers that petitions be submitted

in electronic form, either interactively via the Internet, or by

submission of floppy disk. If disks are being submitted, one hard copy

of each petition should also be enclosed; if multiple requests are

being filed, they may be submitted on a single disk, with a hard copy

list of all the petitions by HTS number included. The form, and

instructions for electronic submissions can be obtained, beginning May

20, 1997, from the USTR Internet home page: www.ustr.gov under the

``What's New'' heading. Technical questions regarding electronic

submission may be made after May 20 by contacting the USTR computer

operations office at (202) 395-3417 during business hours.

b. Paper submissions: Petitions must be type-written and submitted

in 10 copies, in English, at the earliest possible date, but not later

than June 13, 1997 to: Office of the Western Hemisphere, Office of the

United States Trade Representative, Room 501, 600 17th Street, NW,

Washington, D.C. 20508, ATTN: NAFTA Tariff Acceleration desk. Petitions

received after the deadline cannot be considered.

V. Consideration of Petitions

All petitions received by June 13, 1997, and containing complete

and correct information as required in this notice will be reviewed and

a decision made as to which articles will be proposed to the Government

of Mexico for possible accelerated tariff elimination. As noted above,

petitions for articles on which the duty is currently scheduled for

elimination on or before January 1, 1998 in Annex 302.2 of the NAFTA,

as modified, cannot be considered.

Petitions not containing complete and accurate information required

in numbers 1 through 11 of sections A and B cannot be considered.

Petitions not containing complete and accurate information required

in numbers 1 through 11 of sections A and B cannot be considered.

Petitions for products previously considered for acceleration under

the NAFTA will be considered only if USTR determines that circumstances

have sufficiently changed to warrant reconsideration at this time. Such

petitions should include information in Section C of the petition

documenting such a change. Products considered in the first NAFTA

rounds are listed in the Federal Register notice May 23, 1994, Volume

59, Number 98, at pages 26688 through 26690. Information on whether a

product was considered in the first NAFTA product round may also be

obtained from: The Office of the U.S. Trade Representative, NAFTA

Acceleration Help Desk (202) 395-3412, or The U.S. Department of

Commerce, Office of NAFTA (202) 482-0305.

Normally, the accelerated elimination of tariffs between the United

States and Mexico will be pursued on a reciprocal basis. Petitions

containing requests for the accelerated elimination of Mexican tariffs

will be treated as applying equally to corresponding U.S. tariff

treatment, and vice versa. Petitions requesting other than reciprocal

acceleration must note the reasons for the exclusion of the other

party.

Peter F. Allgeier,

Associate U.S. Trade Representative for the Western Hemisphere.

Model Petition To Accelerate the Removal of Tariffs Under the North

American Free Trade Agreement

1997 Round Form for U.S. Petitioners

Section A. Petitioner Identification

1. Petitioner:---------------------------------------------------------

2. Address:------------------------------------------------------------

3. Contact Person:-----------------------------------------------------

4. Telephone Number: (______)------------------------------------------

Section B. Product Identification and Tariff Information

5. Product Description:------------------------------------------------

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(Important: See paragraph IV.3 of General Instructions. Supplement

in Section C, if necessary.)

6. The product is classified in the following 8-digit tariff

subheading:

a. __________ in the 1997 Harmonized Tariff Schedule of the

United States

b. __________ in the 1997 Tariff Schedule of Mexico

c. __________ in the 1997 Customs Tariff of Canada

(Note: petitions cannot be accepted without this information.)

7. Petitioner/Product Relationship (check all that apply):

a. __ Producer in the United States

b. __ Importer in the United States

c. __ Exporter in the United States

d. __ Consumer in the United States

e. __ Other, in the United States

Specify: __________

f. __ Producer in Mexico

g. __ Importer in Mexico

h. __ Exporter in Mexico

i. __ Consumer in Mexico

j. __ Other, in Mexico

Specify: __________

k. __ Producer in Canada

l. __ Importer in Canada

m. __ Exporter in Canada

n. __ Consumer in Canada

o. __ Other, in Canada

Specify: __________

8. This petition:

a. __--covers all products in the U.S. 8-digit tariff subheading

b. __--does not cover all products in the U.S. 8-digit tariff

subheading

c. __--covers all products in the Mexican 8-digit tariff

subheading

d. __--does not cover all products in the Mexican 8-digit tariff

subheading

e. __--covers all products in the Canadian 8-digit tariff

subheading

f. __--does not cover all products in the Canadian 8-digit

tariff subheading

(Important: If items ``b'', ``d'' or ``f'' are checked, the

information required in paragraph 3 of the General Instructions for

product descriptions of single products within an 8-digit subheading

must be provided with this petition.)

[[Page 25995]]

9. Under the NAFTA, the duty is currently scheduled to be eliminated

on January 1:

For U.S. imports: __1999 __2000 __2001 __2002 __2003 __2004

__2005 __2006 __2007

For Mexico imports: __1999 __2000 __2001 __2002 __2003 __2004

__2005 __2006 __2007

10. Accelerated removal is requested for:

a. __ the United States duty on Mexico

b. __ the Mexican duty on the U.S.

(Note: if the request is not made for both Parties, note reason for

exclusion, such as current duty-free status.)

11. The petitioner requests elimination of the tariff/s:

a. __ immediately without further staging

b. __ with accelerated staging

Specify: __________

Section C. Supplemental Information

(Use additional pages as necessary.)

Signature of person filing the petition:-------------------------------

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Title or position:-----------------------------------------------------

Date:------------------------------------------------------------------

[FR Doc. 97-12406 Filed 5-9-97; 8:45 am]

BILLING CODE 3190-01-M