Implementation of WTO Recommendations Concerning the European Communities' Regime for the Importation, Sale and Distribution of Bananas

OFFICE OF THE UNITED STATES TRADE REPRESENTATIVE

[Docket No. 301-100a]

Implementation of WTO Recommendations Concerning the European

Communities' Regime for the Importation, Sale and Distribution of

Bananas

AGENCY: Office of the United States Trade Representative.

ACTION: Notice of proposed determination of action to be taken; request

for public comment; notice of public hearing.

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SUMMARY: The United States Trade Representative requests written

comments and invites testimony in the context of a public hearing on

its proposed determination that the imposition of prohibitive (100

percent ad valorem) duties on selected products from the European

Communities (EC) is an appropriate action under section 306(b) and

301(a) of the Trade Act of 1974, as amended, should the EC fail to

implement the recommendations of the World Trade Organization Dispute

Settlement Body concerning the EC's regime for the importation, sale,

and distribution of bananas within the prescribed reasonable period of

time, which expires on January 1, 1999. The products to be affected by

the proposed duty increase will be drawn from the list of products set

forth in the Annex to this notice. The USTR intends to publish a notice

on December 15, 1998 describing the actions that it would take,

beginning as early as February 1, 1999.

DATES: Requests to testify at the public hearing and written testimony

for the public hearing are due by noon on Monday, November 30, 1998;

the public hearing will be held on Wednesday, December 9, 1998; written

comments, in lieu of written and oral testimony, are due by noon on

Thursday, December 10, 1998; and rebuttal briefs, if needed, are due by

noon on Friday, December 11, 1998.

ADDRESSES: 600 17th Street, NW, Washington, DC 20508.

FOR FURTHER INFORMATION CONTACT: Rachel Shub, Associate General

Counsel, (202) 395-7305; or Ralph Ives, Deputy Assistant U.S. Trade

Representative, (202) 395-3320.

SUPPLEMENTARY INFORMATION: January 1, 1999 is the deadline for the

European Communities' (EC) implementation of the recommendations of the

World Trade Organization (WTO) Dispute Settlement Body (DSB) concerning

the EC's regime for the importation, sale, and distribution of bananas

(banana regime). On October 22, 1998, the United States Trade

Representative (USTR) published a notice [63 FR 56687] of a proposed

affirmative determination under section 306(b) of the Trade Act of

1974, as amended (Trade Act) (19 U.S.C. 2416), that the measures the EC

has undertaken to apply as of January 1, 1999 fail to implement the WTO

recommendations concerning the EC banana regime. Such a determination

will require the USTR also to determine what further action to take

under section 301(a) in the event the EC has failed to implement the

WTO recommendations by January 1, 1999.

Permissible actions under section 301(a) of the Trade Act include:

action to suspend, withdraw or prevent the application of benefits of

trade agreement concessions to the EC; imposition of duties or other

import restrictions on goods of the EC or fees or restrictions on

services of the EC; and restriction or denial of service sector access

authorizations with respect to services of the EC. The USTR proposes

that the imposition of prohibitive (100 percent ad valorem) duties on

selected products from the EC is an appropriate action should the EC

fail to implement the WTO recommendations within the prescribed

reasonable period of time. The products to be affected by the duty

increase will be drawn from the list of products set forth in the Annex

to this notice.

The USTR intends to publish a notice on December 15, 1998

describing the actions that it would take beginning February 1, 1999.

If the EC requests arbitration under Article 22.6 of the WTO Dispute

Settlement Understanding (DSU), the USTR would delay implementation of

action until the completion of the arbitration proceedings or until

March 3, 1999, whichever is earlier.

The announcement of the USTR's determination on December 15 and the

subsequent implementation of action are contingent upon the EC's

failure to suspend the implementation of its new banana regime and to

implement a regime consistent with the WTO's recommendations. The dates

on which the USTR intends to implement action--February 1 or no later

than March 3, 1999--correspond to the dates contemplated by sections

306(b) and 305(a) of the Trade Act as well as Article 22 of the DSU.

Section 306(b) of the Trade Act requires the USTR to determine what

further action it shall take under section 301(a) if the USTR considers

that a foreign country has failed to implement a recommendation made

pursuant to dispute settlement proceedings under the WTO. The USTR

shall make this determination no later than thirty days after the

expiration of the reasonable period of time provided for such

implementation under Article 21.3 of the DSU, which is January 31, 1999

in this case. Section 305(a)(1) requires the USTR to implement such

action by no later than thirty days after the date on which that

determination is made, or March 2 in this case.

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According to Article 22 of the DSU, the United States can request

DSB authorization to suspend the application of concessions or other

obligations to the EC for its failure to bring a measure into

compliance with a covered agreement or the WTO's recommendations within

the reasonable period of time. The United States may make its request

twenty days after the expiration of the reasonable period of time, or

January 21 in this case. Article 22.6 of the DSU provides that the DSB

shall grant the requested authorization not later than thirty days

after the expiration of the reasonable period, or January 31 in this

case. The DSB must decide by consensus to reject the request for

authorization. The EC may object to the level of suspension proposed or

the application of the principles and procedures specified in Article

22.3 of the DSU in considering the types of concessions or obligations

to suspend, in which case the matter shall be referred to arbitration.

The DSU requires that arbitration proceedings be completed within sixty

days after the expiration of the reasonable period of time, or March 2

in this case. The United States may not suspend concessions or other

obligations during the course of the arbitration proceedings.

Proposed Determination on Appropriate Action

The USTR proposes that the imposition of prohibitive (100 percent

ad valorem) duties on selected products from the EC is an appropriate

action should the EC fail to implement the WTO recommendations within

the prescribed reasonable period of time, which expires on January 1,

1999. The products to be affected by the duty increase will be drawn

from the list of products set forth in the Annex to this notice. The

USTR also has been considering whether appropriate action may include

the imposition of fees or restrictions on, or the restriction or denial

of authorizations for, EC services and service suppliers. If the USTR

intends to determine that any action with respect to services or

service suppliers would be practicable and effective, the USTR will

publish a further notice seeking comments on such proposed action.

In determining what action to take, the USTR will consider all

written comments, testimony, and rebuttal briefs submitted by

interested persons to the Section 301 Committee in accordance with the

procedures described below.

Public Comment on Proposed Action; Hearing Participation

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

requests all interested persons to provide written comments on the

proposed action. Written comments are due by noon on Thursday, December

10, 1998.

The USTR also invites interested persons to present written and

oral testimony and rebuttal briefs in the context of a public hearing

to be held pursuant to section 304(b) of the Trade Act. The hearing

will be held at 8:00 a.m. on Wednesday, December 9, 1998 in the Main

Hearing Room at the U.S. International Trade Commission, 500 E Street,

SW, Washington, DC 20436. Testimony at the public hearing should be

limited to no more than five minutes.

Written comments and written and oral testimony may address: the

appropriateness of imposing increased duties upon the products listed

in the Annex to this notice; the levels at which U.S. customs duties

should be set for particular items; the degree to which increased

duties might have an adverse effect upon U.S. consumers of the products

listed in the Annex; and any other matter relating to the appropriate

action to be taken under section 306(b) and 301(a). Interested persons

submitting written comments do not need to present written and oral

testimony as well.

Requests To Testify and Written Testimony: Interested persons

wishing to present testimony at the hearing must submit a written

request to do so by noon on Monday, November 30, 1998, together with

twenty copies of their complete written testimony. Requests to testify

must conform to the requirements of 15 CFR 2006.9 and include the

following information: (1) Name, address, telephone number, fax number,

firm or affiliation of the applicant, and interest of the applicant;

and (2) a brief summary of the comments to be presented. After

considering the request to present oral testimony, the Chairman of the

Section 301 Committee will notify the applicant of the time of his or

her testimony.

Rebuttal Briefs: To assure each party an opportunity to contest the

information provided by other parties, the USTR will entertain rebuttal

briefs filed by any party by noon on Friday, December 11, 1998. 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

written or oral testimony 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 the 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: EU--Bananas

Implementation of WTO Recommendations, Room 100.

Written comments, written testimony, and rebuttal briefs will be

placed in a file (Docket 301-100a) 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 nonconfidential summary of the

confidential information. The nonconfidential summary will be placed in

the docket that is open to public inspection.

An appointment to review Docket No. 301-100a may be made by calling

Brenda Webb at (202) 395-6186. 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.

Joanna K. McIntosh,

Chairman, Section 301 Committee.

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[FR Doc. 98-30225 Filed 11-9-98; 8:45 am]

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