26262 Federal Register / Vol. 65, No. 88 / Friday, May 5, 2000 / Notices

total jobs would have a positive impact

on the economic area surrounding the

reactor site. Operation of a newly

completed reactor would have the

greatest positive socioeconomic

impacts, while use of currently

operating CLWRs to produce tritium

would involve insignificant

socioeconomic impacts.

Transportation

There will be impacts associated with

transporting irradiated TPBARs from the

reactor sites to the Tritium Extraction

Facility (TEF) at the Savannah River

Site (SRS). There would be up to

approximately 13 shipments of TPBARs

annually to SRS which would result in

an annual human health risk, over the

entire route of the shipments, of less

than 1 latent cancer fatality every

100,000 years. The impact on any one

individual would be less than that. All

the transportation impacts are

negligible.

No environmental commitments or

mitigation were identified for the

preferred alternative. A substantial

radiological monitoring program for

public exposure and all environmental

media (air, water and land) is an

established component of existing

operations at the Watts Bar and

Sequoyah Nuclear Plants. This existing

program will identify any increases in

radiological releases and impacts that

may result from tritium production.

Other Considerations

TVA’s Support of National Defense

TVA’s decision to produce the

Nation’s tritium on an ‘‘at cost’’ basis

under an Economy Act agreement

reflects TVA’s continuing willingness to

support the national defense. TVA’s

historic and contemporary defense roles

are described above under TVA’s

National Defense Role. Both alternatives

would further TVA’s commitment to

national defense by producing the

requisite quantities of tritium.

Regulatory and Licensing Issues

The Bellefonte alternatives would

have to be licensed as a new nuclear

power plant. The plant’s initial NRC

operating license would also permit

tritium production. Since the process is

likely to take 5 years, the Bellefonte

alternative has the potential to impact

the project schedule but would not

affect the national security because

initial tritium production could begin

with the Watts Bar reactor.

For the alternatives using existing

CLWRs, NRC would have to amend the

operating licenses of the Watts Bar and

Sequoyah reactors to permit tritium

production. TVA expects that NRC

would be in a position to act upon the

amendment requests well in advance of

the planned October 2003 start of

irradiation.

Environmentally Preferable Alternative

The alternatives involving the

completion and operation of one or both

of the Bellefonte units would cause

greater environmental impacts than the

alternatives using existing operating

reactors at Watts Bar and Sequoyah.

This greater impact of alternatives using

the Bellefonte reactors would result

from their construction and operation as

nuclear units which would be made

possible by their concurrent use for

tritium production. Based on these

additional impacts that would be caused

by completing and operating the

Bellefonte units, TVA considers the use

of the Watts Bar and Sequoyah reactors

for tritium production as the

environmentally preferable alternative.

Dated: April 24, 2000.

John A. Scalice,

Chief Nuclear Officer and Executive Vice

President.

[FR Doc. 00–11222 Filed 5–4–00; 8:45 am]

BILLING CODE 8120–08–U

OFFICE OF THE UNITED STATES

TRADE REPRESENTATIVE

Report on Trade Expansion Priorities

Pursuant to Executive Order 13116

(‘‘SUPER 301’’)

AGENCY: Office of the United States

Trade Representative.

ACTION: Notice.

SUMMARY: The United States Trade

Representative (USTR) is providing

notice that it submitted the report on

U.S. trade expansion priorities

published herein to the Committee on

Finance of the United States Senate and

Committee on Ways and Means of the

United States House of Representatives

pursuant to the provisions (commonly

referred to as ‘‘Super 301’’) set forth in

Executive Order No. 13116 of March 31,

1999.

DATES: The report was submitted on

May 1, 2000.

FOR FURTHER INFORMATION CONTACT:

Demetrios Marantis, Associate General

Counsel, Office of the U.S. Trade

Representative, 600 17th Street, NW,

Washington, DC 20508, 202–395–9626.

SUPPLEMENTARY INFORMATION: The text of

the USTR report is as follows.

Identification of Trade Expansion

Priorities Pursuant to Executive Order

13116 April 30, 2000

The United States Trade

Representative (USTR) submits to

Congress this year’s ‘‘Super 301’’ report

pursuant to Executive Order 13116 of

March 31, 1999. The Executive Order

directs the USTR to review U.S. trade

expansion priorities and identify

priority foreign country practices, the

elimination of which is likely to have

the most significant potential to increase

United States exports, either directly or

through the establishment of a

beneficial precedent. This report builds

on the 2000 National Trade Estimate

(NTE) Report on Foreign Trade Barriers

(released on March 31, 2000) and

complements the ‘‘Special 301’’

(intellectual property rights) and ‘‘Title

VII’’ (government procurement) reports.

The USTR prepared this report in

close consultation with other U.S.

Government agencies. After reviewing

the 2000 Trade Policy Agenda, the 2000

NTE Report, public comments

submitted to USTR, and information

received from U.S. Embassies abroad,

these agencies have identified the

Administration’s top U.S. trade

expansion priorities for 2000. USTR has

also determined that a number of

countries have failed to fully implement

certain multilateral commitments and,

accordingly, has decided to pursue

enforcement action in the World Trade

Organization (WTO). Finally, although

USTR is not identifying any ‘‘priority

foreign country practice’’ in this Report,

the Administration has focused on a

number of practices which may warrant

future enforcement action.

I. Trade Expansion Priorities for 2000

Over the past eight years, this

Administration has promoted a strong

trade policy premised on open markets

and the rule of law. The

Administration’s trade policy

achievements have contributed to strong

economic growth, rising living

standards, increased investment, and

industrial growth. Looking forward,

further expansion of trade will remain

crucial to continued growth and

technological progress. In this regard,

USTR identifies below its top trade

expansion priorities for 2000.

A. Complete China’s Accession to the

WTO

This year’s top trade expansion

priority is to complete China’s accession

to the WTO and secure approval of

permanent Normal Trade Relations

(NTR) status for China. The economic

liberalization and opening to the world

Federal Register / Vol. 65, No. 88 / Friday, May 5, 2000 / Notices 26263

China will make as part of its WTO

accession will support reform in China,

create opportunities for China’s trading

partners, and ultimately help to stabilize

peace in the Pacific. From the

perspective of the trading system, a

status quo in which the world’s thirdlargest economy does not need to follow

WTO rules is an enormous source of

distortion and uncertainty.

This Administration made a

monumental step in the direction of

China’s accession last November by

reaching a bilateral agreement with

China on WTO accession. This

Agreement secures broad-ranging,

comprehensive concessions on China’s

part, granting the United States

substantially greater market access

across the spectrum of industrial goods,

services, and farm products. The

Agreement covers tariff and non-tariff

barriers to U.S. exports of industrial

goods, agricultural products and

services. Specific rules address import

surges, anti-dumping and subsidies

practices and requirements for export

performance, local content, offsets, and

technology transfer. These commitments

are specific and enforceable through

WTO dispute settlement, U.S. trade

laws, and other special mechanisms,

including periodic multilateral review

of China’s compliance with its

commitments.

Beyond our bilateral agreement,

securing China’s accession this year will

require action, first by those WTO

members which have yet to complete

their own negotiations with China, and

second by the entirety of the WTO’s

membership on WTO rules issues. As

part of this process, the United States

must grant China unconditional (e.g.,

permanent) NTR or risk losing the full

benefits of the agreement that was

negotiated, including special import

protections, and the right to enforce

China’s commitments through WTO

dispute settlement. All WTO members,

including the United States, pledge to

give one another unconditional NTR so

that we may enjoy the WTO benefits

available in one another’s markets.

Permanent NTR, in terms of our

policy toward China, is no real change.

NTR is simply the tariff status we have

given China since the Carter

Administration; and which every

Administration and every Congress over

the intervening 20 years has reviewed

and found, even at the periods of

greatest strain in our relationship, to be

in our fundamental national interest. If

Congress were to refuse to grant

permanent NTR, our Asian and

European competitors will reap the

benefits of the agreement we negotiated

with China, but American farmers and

businesses may well be left behind.

B. Secure Enactment of Legislation

Promoting Trade in Certain Regions

Greater market access for the poorest

countries remains essential to

integrating less developed regions into

the world economy on an equitable

basis. As the President stressed in his

State of the Union Address, the United

States is prepared to do this unilaterally

by securing passage this year of

legislation further opening U.S. markets

to goods from Africa and the Caribbean.

This is of fundamental importance to

growth and sustainable development for

the people of these regions, and will

also help these regions become better

markets for U.S. products.

In this regard, one of our principal

policy goals for the year 2000 is passage

of the African Growth and Opportunity

Act and Caribbean Trade Enhancement.

This legislation has received bi-partisan

Congressional support, and should see

final action soon. Enactment of these

measures would provide increased

market access for products from

reforming sub-Saharan African

countries. This legislation would also

institutionalize an annual U.S.-subSaharan Africa Trade and Economic

Cooperation Forum and encourage the

establishment of funds and guarantees

to support private sector and

infrastructure development in Africa.

In the Caribbean and Central America,

this legislation would strengthen the

partnerships that exist between the U.S.

and Caribbean Basin firms in the textile

and apparel sector. It would also

improve the competitiveness of apparel

assemblers from the Caribbean and

Central America vis-a-vis assembly

operations in other parts of the world

that do not use U.S. fabric and other

inputs to the same extent.

Offering additional trade benefits to

Southeast Europe is also an important

component of the Administration’s

efforts, in conjunction with the

European Union (EU) and other

multilateral institutions, to bring

stability and economic development to

Southeast Europe. The Administration

has transmitted to Congress legislation

that would provide the authority to

establish duty-free treatment of certain

imports from the countries and

territories of Southeast Europe on the

basis of specific criteria for a period of

five years. Full utilization of the

additional duty-free treatment would

provide several of the countries of

Southeast Europe with duty-free entry

to the U.S. market for over 80 percent

of their products. Serbia would be

eligible for this treatment only if the

President determined significant

progress had been made in meeting

several reform criteria and international

obligations. This legislation has been

introduced in the Senate, and the

Administration supports its enactment

this year.

C. Advance Negotiations for the Free

Trade Area of the Americas

The 34 democracies in the Western

Hemisphere are currently engaged in the

historic mission to create the Free Trade

Area of the Americas (FTAA). This

process will eliminate tariffs and nontariff barriers to trade in goods and

services throughout the Hemisphere and

establish a single set of rules for

liberalized trade in the region, and

fulfill a two-century old dream of a

hemisphere united by a shared

commitment to democracy, prosperity

and mutual benefit. This commitment

has already led to agreement on the

adoption of specific business facilitation

measures in the area of customs

procedures, with implementation

beginning this year. In addition, in

November 1999, the 34 trade ministers

agreed in Toronto to an ambitious

negotiating agenda for the following 15

months, namely for each of the nine

negotiating groups to prepare draft texts.

With the Third Summit of the

Americas scheduled for April 2001 in

Quebec, Canada, this year will be an

intense year of negotiations. The agenda

concentrates in four areas: Negotiating

draft texts of the chapters of the

Agreement by April 2001; carrying out

a continuing program of business

facilitation; addressing the views and

concerns of civil society; and deepening

the region’s understanding of the

implications and benefits of electronic

commerce for our societies.

Ensuring that trade liberalization and

environmental protection policies are

mutually supportive is a key priority of

the Administration. One important

means of ensuring this is through

environmental reviews of trade

agreements, as reflected in the Executive

Order on Environmental Review of

Trade Agreements. Thus, the

Administration has initiated its

environmental review of the FTAA.

This will help inform both the public

and negotiators of the environmental

considerations that must be taken into

account as the United States formulates

its negotiating positions. As we

implement the principles of the White

House Declaration of Environmental

Trade Policy, the United States will also

work with other stakeholders to address

concerns including issues of worker

rights, transparency, and consumer

protection.

26264 Federal Register / Vol. 65, No. 88 / Friday, May 5, 2000 / Notices

D. Pursue Multilateral Negotiations To

Open World Markets to U.S. Exports

Over the past eight years, the

Administration has made great progress

toward open and fair world markets.

However, this work is not yet done, and

WTO members must focus on the

negotiating agenda of the next decade.

Under existing commitments made in

the Uruguay Round, WTO members

have opened formal negotiations to

undertake further reforms and

liberalization in agriculture and

services—sectors in which the most

distortions and barriers remain. The

Administration intends to pursue

progress in these areas in close

consultation with Members of Congress,

the private sector and other interested

Americans. In this regard, on March 28,

USTR published in the Federal Register

a notice seeking comments from all

interested parties as the United States

begins the process of developing

proposals for these negotiations.

The Administration has ambitious

goals in these areas. In agriculture, the

WTO Agreement on Agriculture

provides the basis on which to pursue

further meaningful reform. The United

States is now working with other

countries to ensure that negotiations

focus on substantive reform proposals

such as eliminating export subsidies;

reducing tariffs; expanding market

access opportunities for products

subject to tariff rate quotas (TRQs),

including better disciplines on the

administration of those TRQs; reducing

trade-distorting domestic support levels;

and ensuring that the operation of

agricultural state trading entities is more

market-oriented.

In services, the United States is

developing negotiating proposals for a

wide range of sectors, including energy

services, environmental services,

audiovisual services, express delivery,

financial services, telecommunications,

professional services, private education

and training, private healthcare, travel

and tourism, and other sectors of great

importance to the U.S. economy in

particular, its high-tech sectors. Broadly

speaking, U.S. objectives include further

removing restrictions on services trade

and ensuring non-discriminatory

treatment.

Beyond these mandated negotiations,

there is a host of other issues on the

WTO’s agenda which warrant attention.

As examples, we must address market

access concerns in non-agricultural

products, electronic commerce, issues

related to trade and the environment,

trade and labor, trade facilitation,

transparency in government

procurement, and other topics as well.

Thus, while there are a number of

different options for proceeding with

trade liberalization beyond agriculture

and services, the United States is

working to build consensus for a new

Round. Building such a consensus is not

a simple task. However, the goal can be

achieved if WTO members prove willing

to focus more fully on the shared

benefits of success, and find the balance

that allows us to move ahead.

E. Enhance Monitoring and Enforcement

Efforts

Ensuring full implementation of our

trade agreements remains one of this

Administration’s strategic priorities.

Vigorous enforcement enhances our

ability to get the maximum benefit from

our trade agreements, ensures that we

can continue to open markets, and

builds confidence in the trading system.

The United States has respected its own

commitments in this regard and expects

the same of its trading partners.

Consequently, this Administration has

devoted more attention and resources

than ever before to ensuring that these

agreements yield the maximum

advantage in terms of ensuring market

access for Americans, advancing the

rule of law internationally, and creating

a fair, open and predictable trading

environment.

To carry out this work as effectively

as possible, in particular with the

prospect of enforcing our bilateral

agreement with China on WTO

accession, the Administration has added

new personnel to carry out a larger

enforcement workload, without

compromising our efforts to negotiate

further market access in key markets.

The President has also announced a

Trade Compliance Initiative, which

would further strengthen the monitoring

and enforcement capabilities of the

Executive Branch and would add

additional resources for those efforts.

II. Enforcing Trade Commitments and

Resolving Disputes

Since 1993, the Administration has

vigorously enforced U.S. rights by

deploying all available trade

enforcement tools. Through application

of U.S. trade laws, and active use of

WTO dispute settlement procedures, the

Administration has effectively opened

foreign markets to U.S. goods and

services. The President has also used

the incentive of preferential access to

the U.S. market to encourage

improvements in workers’ rights and

reform of intellectual property laws and

practices in other countries. These

enforcement efforts have resulted in

major benefits to U.S. firms, farmers and

workers.

In parallel with enforcement of U.S.

trade laws, U.S. participation in the

WTO has been instrumental to the

progress made in enforcing the

international commitments of our

trading partners. By ratifying the

Uruguay Round Agreements, which

created the WTO on January 1, 1995,

Congress took a step of immense

significance: helping to expand the rule

of law and strengthening our ability to

enforce the commitments of U.S. trading

partners. Since that time, the United

States has been the world’s most

frequent user of WTO dispute

settlement procedures, winning

favorable settlements and panel

victories in virtually all sectors,

including manufacturing, intellectual

property, agriculture, and services.

Continued participation in the WTO by

the United States therefore remains

central to the efforts of this and future

Administrations to ensure that

Americans enjoy the full promise and

benefit of international trade

agreements.

With the WTO now five years old, the

obligations contained in most of the

Uruguay Round agreements have

already entered into force. In particular,

January 1, 2000, marked the expiration

of the five-year transition periods

granted to certain WTO members

(particularly in less-developed

countries) to phase-in key rules agreed

in the Uruguay Round, such as those in

the area of intellectual property, traderelated investment measures, customs

valuation and industrial subsidies.

There has been good progress in the

implementation of and compliance with

WTO commitments, particularly as a

result of enforcement of U.S. trade law,

activity in the various WTO oversight

bodies, and successful dispute

settlement activity. However, the United

States remains concerned that certain

trading partners are not yet fulfilling all

of their WTO obligations.

A. Enforcement Successes

Securing compliance with WTO and

other trade obligations has been a major

success of this Administration. Efforts to

promote compliance with the WTO

agreements have taken place using three

tools: (1) Enforcement of U.S. trade law;

(2) the various WTO oversight bodies

and (3) the WTO dispute settlement

mechanism.

First, the panoply of U.S. trade tools

(e.g., Section 301, Section 1377, Special

301, Super 301, and Title VII) works in

conjunction with bilateral and WTO

mechanisms to promote compliance and

to address problems that are outside the

scope of the WTO and NAFTA. These

tools have led to some important

Federal Register / Vol. 65, No. 88 / Friday, May 5, 2000 / Notices 26265

implementation successes in the past

year:

• Pursuant to Section 301, USTR

successfully investigated and resolved a

petition filed by the Border Waters

Coalition Against Discrimination in

Service Trade of certain Canadian

practices affecting tourism and sport

fishing. This investigation was

announced as part of last year’s Super

301 report.

• Section 1377 has produced

enhanced implementation of WTO basic

and value-added telecommunications

commitments. For instance, as part of

this year’s Section 1377 process, Israel

announced that it would terminate its

discriminatory access charge on traffic

between Israel and North America (see

USTR News Release 00–25, April 4,

2000).

• Special 301 has been used

successfully by USTR to encourage

many developing countries to make

substantial progress toward full

implementation of their TRIPS

obligations. For details, see this year’s

Special 301 report on intellectual

property rights.

• The 1999 Super 301 Report

provided the basis for WTO

enforcement action against India

(regarding automotive trade and

investment measures) and for steppedup enforcement activity in the area of

customs valuation. The United States

will pursue WTO consultations

regarding the customs valuations

practices of Brazil and Romania, consult

bilaterally with Mexico, and closely

monitor India’s customs valuation

practices.

• Title VII has enabled USTR to

challenge the discriminatory

procurement barriers of foreign

governments. For instance, after being

identified under Title VII in 1996 for

failing to provide an adequate remedies

system to challenge procurement

decisions in the heavy electrical sector,

Germany has since passed and

implemented new legislation to reform

its bid challenge system.

Second, WTO oversight bodies offer

another important means of securing

implementation of WTO commitments.

WTO members have worked collectively

in the array of WTO oversight bodies

charged with monitoring

implementation and surveillance of

agreements and disciplines to monitor

the commitments our trading partners

have made, identify potential problems,

and offer technical assistance or other

expertise when necessary to help ensure

compliance and implementation of

commitments. The United States

actively asserts its rights and pursues its

interests through these mechanisms. For

example:

• The Committee on Agriculture has

remained an effective forum for raising

agricultural trade issues of concern. The

United States played a leading role in

the Committee’s activities, working with

other countries to ensure broad-based

compliance with WTO commitments on

agriculture.

• The Committee on Customs

Valuation, where more than 50

developing country members face

individual deadlines for

implementation of the Agreement on

Customs Valuation. Some members

have requested additional time to

assume the Agreement’s obligations in

full. The United States and others,

working through the Committee, have

consulted with these members to craft

individualized extension decisions

which provide for benchmarked work

programs toward full implementation,

along with reporting requirements and

specific commitments on other

implementation issues important to U.S.

export interests.

• In the Committee on Technical

Barriers to Trade, the United States has

expressed concerns about a range of

foreign measures which could adversely

affect trade or pose unnecessary trade

barriers, e.g., EU restrictions on the use

of hushkitted and certain re-engined

aircraft.

• In the Committee on Balance of

Payments (BOP) Restrictions, the

effective use of consultation procedures

resulted in Nigeria’s elimination of all

BOP-justified restrictions such that,

now, only four members continue to

retain such measures.

• Finally, the Trade Policy Review

process has been instrumental in the

identification of potentially WTOinconsistent practices in members’

regimes, and provides a forum in which

pressure can be brought to urge reform

or elimination of such practices.

Third, the United States has used the

WTO dispute settlement mechanism to

ensure implementation of WTO

commitments. U.S. dispute settlement

activity has aimed not only at

challenging existing barriers but also at

preventing the future adoption of

similar barriers around the world. In

this regard, the United States continues

to be the most active user of the WTO

dispute settlement process and, in 1999,

filed eight new complaints. These cases

involve a variety of WTO-inconsistent

trade barriers maintained by several

different governments.

U.S. experience thus far indicates that

the WTO dispute settlement process has

been an effective tool in combating

barriers to U.S. exports. Some key

dispute settlement successes in the past

year include:

• Agreement on expeditious

elimination of India’s import bans and

other quantitative restrictions on 2,700

tariff lines of goods. This ruling will

open new markets for U.S. producers of

consumer goods, textiles, agricultural

products, petrochemicals, high

technology products, and other

industrial products;

• Reduction of Canada’s subsidized

exports of dairy products. The WTO

panel and Appellate Body rulings in

this case prevent Canada from applying

illegal export subsidies on dairy

products, including butter and skimmed

milk powder; stop Canada’s evasion of

its Uruguay Round agricultural trade

obligations; and deter copycat subsidies

in other countries;

• WTO ruling requiring withdrawal

of Australia’s subsidies on exports of

automotive leather. If the United States

cannot satisfactorily resolve this matter

with Australia, the WTO Dispute

Settlement Body will authorize the

United States to suspend concessions

with respect to products of Australia;

• Affirmation of the WTO right to

suspend concessions with respect to

certain products from the EU as a result

of the EU’s failure to lift its ban on

imports of U.S. meat, as well as its

adoption of a WTO-inconsistent bananaimport policy;

• Elimination of Japanese restrictions

on the imports of certain varieties of

fruit, including apples and cherries; and

• Affirmation that Mexico’s

imposition of anti-dumping duties on

the import of high fructose corn syrup

from the United States was inconsistent

with the requirements of the WTO

Antidumping Agreement.

As important as favorable WTO

rulings are early settlements, achieved

without having to pursue litigation to

completion. Some notable settlements

include full enforcement of intellectual

property rights in Sweden, elimination

of tax discrimination against imported

movies in Turkey, and market access for

U.S. agricultural products in the

Philippines and the EU.

B. Resolving Disputes

Despite these many successes, certain

WTO members are not implementing

their WTO obligations, including those

that came due on January 1, 2000. The

United States remains committed to

engaging in discussions with its trading

partners in a constructive spirit to find

solutions to implementation problems,

including in the respective WTO bodies

charged with overseeing the rigorous

technical aspects of implementation,

and will use all multilateral tools

26266 Federal Register / Vol. 65, No. 88 / Friday, May 5, 2000 / Notices

available to resolve such problems. In

this connection, initiating WTO dispute

settlement procedures may be the most

effective means of achieving a

resolution on a multilateral basis of

some of these difficult issues.

Accordingly, USTR has decided to

resort to these procedures in the

following cases:

• Brazil-Customs Valuation: The

United States will request WTO

consultations with Brazil regarding its

system for verification of the declared

values of imported goods, such as textile

products. Brazil uses minimum

reference prices both as a requirement to

obtain import licenses and/or as a base

requirement for import. In practice, this

system works to prohibit the import of

products with declared values below

established minimum prices, and, as

such, appears to violate provisions of

the WTO Agreement on Customs

Valuation, GATT 1994, and the WTO

Agreement on Import Licensing

Procedures. The United States has also

actively participated as an interested

third party in consultations requested

by the EU on this issue.

• India-Measures Affecting Trade and

Investment in the Motor Vehicle Sector:

The United States will take the next step

in its dispute with India and will

request the establishment of a WTO

dispute settlement panel to challenge

the WTO consistency of Indian

measures that apply to investment in

the automotive industry. In order to

obtain import licenses for certain motor

vehicle parts and components, India

requires manufacturing firms in the

motor vehicle sector to achieve

specified levels of local content,

neutralize foreign exchange by

balancing the value of certain imports

with the value of exports of cars and

components over a stated period, and

limit imports to a value based on the

previous year’s imports. Considering

these requirements inconsistent with

India’s obligations under the GATT

1994 and the TRIMS Agreement, the

United States requested WTO

consultations on June 2, 1999. These

consultations—held on July 20, 1999—

failed to resolve the dispute, and

accordingly the United States intends to

take the next step and litigate this issue

before a WTO panel.

• Philippines-Measures Affecting

Trade and Investment in the Motor

Vehicles Sector: The United States will

request WTO consultations with the

Philippines on its motor vehicle

policies. The Philippines imposes local

content requirements on producers of

motorcycles, automobiles and

commercial vehicles which range from

13 to 45 percent (certain automobiles

face a 40 percent requirement). There

are also foreign exchange balancing

requirements which range from 5 to 75

percent. The Philippines was required

to remove these measures by January 1,

2000, unless additional time was

granted by the WTO. On October 4,

1999, the Philippines made a formal

request for an additional five years to

bring these measures into compliance

with its obligations under the

Agreement. For these reasons, the

Philippines appears to be in violation of

the TRIMs Agreement. Additionally,

other facets of the Philippines’ motor

vehicle policy will be reviewed to

ensure their consistency with other

WTO standards. The approximate size

of the vehicle market in the Philippines

in 1998 was 80,000 units (250,000 units

including motorcycles). A large portion

of the vehicles sold in the Philippines

are produced locally. Motor vehicle

parts sales into the Philippines are also

reduced by these measures. The United

States has actively pursued a resolution

of this request through bilateral and

multilateral meetings, and will continue

to do so through the use of dispute

settlement procedures.

• Romania-Customs Valuation: The

United States will request WTO

consultations with Romania regarding

measures which establish minimum and

maximum prices for certain imported

products (such as poultry, eggs, fruits

and vegetables, clothing, footwear, and

certain distilled spirits) and procedures

for investigating import prices when the

declared value falls below the minimum

import price. In such situations, the

importer is required to pay, in addition

to the duty based on the declared value,

a ‘‘guarantee’’ deposit that is the

difference between the duties of the

maximum established price and that of

the declared value. These practices

appear to violate Romania’s obligations

under the WTO Customs Valuation

Agreement, GATT 1994, as well as the

WTO Agreement on Agriculture.

• Intellectual Property Rights: In

addition, in the ‘‘Special 301’’ report on

intellectual property rights, the USTR

announces that the United States will

pursue WTO dispute settlement in three

intellectual property rights cases. The

United States will request WTO

consultations with Argentina regarding

significant deficiencies in its patent

regime. The United States will also

consult with Brazil in the WTO

regarding a longstanding narrow

difference of views on interpretation of

the WTO Agreement on Trade-Related

Aspects of Intellectual Property Rights

(TRIPS) that can only be resolved

through WTO dispute settlement. The

United States will also proceed to a

WTO panel in an existing dispute with

Denmark regarding enforcement of its

intellectual property laws unless

imminent progress is made.

III. Continued Monitoring of Certain

Trade Practices

This report also identifies several

trade practices of significant concern.

While these practices do not yet warrant

enforcement action, USTR will monitor

closely developments with respect to

these practices and could initiate

bilateral or multilateral trade

enforcement action as necessary.

EU-Airbus

The United States is extremely

concerned about the ongoing

subsidization of the Airbus consortium

by EU Member State governments. Since

the inception of Airbus in 1967, the

Airbus member governments have

provided massive subsidies to their

respective member companies to aid in

the development, production and

marketing of the Airbus family of large

civil aircraft, enabling Airbus to garner,

according to the Airbus Chief Executive

Officer, ‘‘a 55 percent market share in

1999, after almost 50 percent in 1998.’’

The Airbus partner governments have

borne 75 to 100 percent of the

development costs for all major lines of

Airbus aircraft and provided other forms

of support, including equity infusions,

debt forgiveness, debt rollovers and

marketing assistance. They have also

provided funds to support the

development of derivative versions of

earlier Airbus aircraft models, such as

the A330–200 and the A340–500/600.

Some loans for Airbus programs,

repayable from royalties on aircraft sold,

have been effectively forgiven because

projected sales did not materialize.

The Airbus governments continue to

subsidize their member companies. The

British government recently announced

a commitment of $830 million to

underwrite BAe System’s participation

in the development of a new Airbus

project, the A3XX ‘‘superjumbo’’

aircraft. The French, German and

Spanish governments are considering

whether to extend A3XX funding to

their producers as well. The recent

announcement that the Italian company

Finmeccanica may join both Airbus and

the A3XX program raises new subsidy

issues with regard to Italy, and the

pending creation of a unified Airbus

company creates serious concerns about

possible debt forgiveness in all of the

Airbus countries.

The United States believes that

government support of Airbus raises

serious concerns about Member State

compliance with their bilateral and

Federal Register / Vol. 65, No. 88 / Friday, May 5, 2000 / Notices 26267

multilateral obligations in this sector.

The United States will closely monitor

developments and will consider all

options to ensure that these obligations

are fully met.

India-Textiles

Under the December 31, 1994 U.S.-

India Memorandum of Understanding

(MOU) on Market Access for textile

products, India committed to

undertaking tariff bindings on a broad

spectrum of such products. The United

States also committed to provide India

with ‘‘relevant price information’’ on

products subject to the MOU. The

United States has lived up to its

commitments under the MOU. India,

after a lengthy delay, has made some

effort to bind textile tariffs. However,

the items proposed to be bound

generally are not items covered by the

U.S.—India agreement, and the binding

proposal is deficient in many respects.

In addition, India has begun to apply

alternative specific duties in the textile

sector, which will have a significantly

negative impact on potential U.S.

exports. In so doing, India has

apparently failed to take into account

relevant data supplied by the United

States. India’s actions conflict with the

objectives of the 1994 agreement, which

called on both the United States and

India to improve conditions for access

into their markets for textile and apparel

products. The United States will

continue to work to ensure that India

completes an acceptable,

comprehensive tariff binding, in

compliance with bilateral and WTO

commitments, as soon as possible, and

will take appropriate action as

necessary.

Japan-Automotive Sector

The U.S.-Japan Automotive

Agreement achieved initial progress in

opening Japan’s auto and auto parts

market to U.S. and other foreign

suppliers, but results over the last few

years have been disappointing. Japan

introduced new categories of service

garages, removed shock absorbers,

struts, trailer hitches, and power

steering from the critical parts list,

deregulated 23 standards and

certification requirements and

streamlined the type designation

system, improved access to vehicle

registration data, and took steps to

ensure auto dealers that they are free to

carry the products of competing

manufacturers. Since 1997, however,

the Japanese Government has remained

reluctant to take additional meaningful

steps to actively deregulate and fully

open its automotive sector, or to create

an environment that would help

promote a more competitive market in

this sector. The United States has called

upon Japan to take additional, concrete

market-opening and deregulatory

actions to achieve the Automotive

Agreement’s objectives of ensuring

continuing improvements in market

access and sales opportunities in the

Japanese automotive market. The United

States is also consulting with U.S.

industry, labor, Congress, NGOs, and

other interested parties to develop a

position on what type of follow-on

agreement it should seek in light of the

December 2000 expiration date of the

current Automotive Agreement. The

Administration hopes to work closely

and cooperatively with Japan on this

issue in the coming months.

Japan-Flat Glass

The U.S.-Japan Flat Glass Agreement,

which expired on December 31, 1999,

achieved some progress in opening

Japan’s flat glass market. For example, it

resulted in Japan’s adoption of energy

conservation standards in the housing

sector, boosting demand for high-valueadded insulating glass produced by both

Japanese and U.S. manufacturers.

However, the Agreement’s principal

objective, opening Japan’s flat glass

distribution to non-Japanese

manufacturers, remains unfulfilled. The

Japanese Government’s own data show

that most Japanese distributors believe

that foreign flat glass manufacturers

offer equal or better prices, quality and

service than Japanese manufacturers.

Yet the world’s four leading nonJapanese flat glass manufacturers,

including two U.S. firms, still sell an

insignificant amount of glass to Japan,

with market share stuck at about five

percent. The highly oligopolistic market

structure and the tight control exerted

by three Japanese manufacturers over

the domestic glass distribution system

though majority ownership, equity and

financing ties, employee exchanges, and

purchasing quotas remain the key

barriers to market access in this sector.

Japan’s Fair Trade Commission has

recently taken action to curb some of

these practices in niche glass markets,

but has not taken action in the broader

glass market.

The United States continues to urge

Japan to take concrete steps to open this

market. Later this Spring, the United

States and Japan are planning to hold a

government/industry forum involving

Japanese and U.S. industry

representatives to share perspectives on

the state of competition in Japan’s flat

glass market. Following this forum, the

two governments will meet to discuss

ways in which the two governments can

work together to achieve an open and

competitive flat glass market in Japan.

Korea-Motor Vehicle Policies

In October 1998, the U.S. and Korean

Governments concluded a

Memorandum of Understanding (MOU)

and exchange of letters to settle a

section 301 investigation initiated after

USTR named Korea’s motor vehicle

policies as a ‘‘priority foreign country

practice’’ in the 1997 Super 301 report.

Under the 1998 MOU, Korea agreed to

(1) bind in the WTO its 80 percent

applied tariff rate at 8 percent; (2) lower

some of its motor-vehicle-related taxes

and eliminate others; (3) adopt a selfcertification system by 2002; (4)

streamline its standards and

certification procedures; (5) establish a

new financing mechanism to make it

easier to purchase motor vehicles in

Korea; and (6) actively and

expeditiously address instances of antiimport activity and actively promote a

better understanding of free trade and

open competition.

While Korea has taken steps to

implement provisions in the MOU, after

two sets of detailed consultations and

numerous other government-togovernment exchanges, the U.S.

Government and industry continue to

have serious concerns about the lack of

access to the Korean motor vehicle

market, as demonstrated by

unacceptably low foreign market share.

The MOU provides for a significant

increase in market access for foreign

motor vehicles. In addition, there has

not been meaningful restructuring of the

Korean motor vehicle sector, i.e.,

changes have yet to yield efficient,

market-driven firms. Also, anti-import

activity continues, and negative

perception of foreign motor vehicles

persists, including, for example, the

perception that buying a foreign car is

an unpatriotic act that could lead to tax

audits. While the Korean Government

has taken some steps to address these

problems, some Korean Government

officials, as well as Korean individuals

outside of the government, have

demonstrated a return to the past

practice of discouraging the purchase

and consumption of imported goods,

including foreign motor vehicles.

Finally, the U.S. Government has put

the Korean Government on notice that

some of its plans or policies on

standards and taxes do not conform

with the provisions in the MOU. The

U.S. Government will continue to

aggressively push for full and faithful

implementation of the 1998 MOU and

side letter.

26268 Federal Register / Vol. 65, No. 88 / Friday, May 5, 2000 / Notices

Korea-Treatment of Foreign, ResearchBased Pharmaceuticals

U.S. concerns about Korea’s treatment

of foreign, research-based

pharmaceuticals have centered around

(1) discrimination in the reimbursement

pricing system; (2) lack of protection of

intellectual property rights (IPR),

particularly with respect to clinical data

and patents; and (3) burdensome and

non-science-based Korean regulatory

requirements, particularly on the

acceptance of foreign clinical test data,

testing, and approval of new drugs. In

response to multiple government-togovernment exchanges, including at

high levels, the Korean Government has

made some changes to address U.S.

concerns. Specifically, imported

pharmaceuticals are now listed, as are

domestic drugs, on Korea’s national

health insurance reimbursement

schedule. Also, the Korean Government

has introduced a new system to

reimburse hospitals for drugs at actual

transaction prices to eliminate the

illegal hospital margins that were

available only for domestic drugs.

Finally, Korea has taken some minor

steps to address U.S. concerns on data

protection and regulatory issues.

However, serious questions remain

regarding how the new reimbursement

pricing system in Korea will treat

foreign innovative drugs, and regarding

whether Korea provides TRIPSconsistent data protection. Korean

authorities have resisted committing to

a system of ‘‘linkage’’ between health

and IPR authorities that would prevent

the launch into the Korean market of

drugs that would infringe valid patents.

Finally, new Korean regulations

finalized in December 1999 do not

conform to international guidelines on

the acceptance of foreign clinical test

data. Prior to December of last year, in

communications with the U.S.

Government, the Korean Government

indicated that it would implement these

guidelines. In fact, the final Korean

regulations appear to perpetuate

requirements for redundant clinical

testing and fail to shorten and

streamline Korea’s drug approval

process. The U.S. Government will

continue discussions with the Korean

Government until U.S. concerns are

addressed.

Malaysia-Trade and Investment in

Motor Vehicles

The United States will continue to

monitor Malaysia’s compliance with its

WTO obligations in the motor vehicle

sector. Malaysia imposes local content

requirements on producers of

motorcycles, automobiles and

commercial vehicles (45 to 60 percent

for passenger and commercial vehicles

and 60 percent for motorcycles). Under

the TRIMs Agreement, Malaysia was

required to remove these measures by

January 1, 2000 unless additional time

was granted by the WTO. On December

29, 1999, Malaysia made a formal

request for an additional two years to

bring these measures into compliance

with its obligations under the

Agreement, but approval of this request

has not been forthcoming. For these

reasons, Malaysia appears to be in

violation of the TRIMs Agreement. The

approximate size of the automobile and

commercial vehicle market in Malaysia

in 1998 was 164,000 units. A large

portion of the vehicles sold in Malaysia

are produced locally. Motor vehicle

parts sales into Malaysia are also

reduced by these measures.

The United States hopes to receive

increased interest from Malaysia in

resolving this issue in a timely fashion.

It will be important to increase the

dialogue regarding the extension request

made by the Malaysians. A meaningful

first step will be for Malaysia to provide

answers to a series of questions posed

by several WTO members. The United

States provided its questions on

February 8, 2000 and on several

occasions encouraged Malaysia to

respond. Absent progress toward

resolving Malaysia’s request, we will

need to consider alternate action to

resolve this apparent violation.

Additionally, other facets of Malaysia’s

motor vehicle policies will be reviewed

to ensure their consistency with WTO

obligations.

Mexico-Customs Valuation

The United States has requested

bilateral consultations with the

Government of Mexico regarding its use

of reference prices for a wide range of

imported products, including foods,

distilled spirits, chemicals, paper,

textiles, apparel, footwear, steel, hand

tools, and appliances. Based on

currently available information,

effective May 1, 2000, companies

importing affected products below the

Government’s minimum reference price

must deposit cash in a designated

Mexican financial institution (or arrange

one of two alternative guarantees) to

cover the difference in duties and taxes.

This cash deposit requirement is to

replace a bond requirement that has

been in place for several years. These

practices appear to violate a number of

WTO agreements, including the WTO

Agreement on Customs Valuation,

GATT 1994, the WTO Agreement on

Import Licensing Procedures, the

Agreement on Preshipment Inspection,

and the Agreement on Textiles and

Clothing. If consultations underway do

not result, in a timely manner, in

Mexican policies which are in

compliance with its international

agreements, the United States will

initiate WTO consultations.

Mexico-Nutritional Products

Mexican Health Ministry regulations

require the inspection and approval of

manufacturing facilities in order to sell

nutritional products, such as low-dosage

vitamins, in Mexico. However, Mexican

authorities refuse to inspect U.S.-based

manufacturing facilities. Denying U.S.

exporters the ability to have their

facilities inspected and approved on the

same basis as their Mexican

counterparts raises serious concerns

about Mexico’s adherence to its trade

obligations under the NAFTA and the

WTO. The United States has raised

these concerns with Mexico and has

requested further consultations with

Mexico. If this problem is not resolved

in a timely manner that will allow U.S.

companies without Mexican-based

production facilities to resume

exporting nutritional products to

Mexico, the United States will consider

proceeding to dispute settlement.

A. Jane Bradley,

Assistant U.S. Trade Representative for

Monitoring and Enforcement.

[FR Doc. 00–11289 Filed 5–4–00; 8:45 am]

BILLING CODE 3190–01–P

DEPARTMENT OF TRANSPORTATION

Federal Aviation Administration

Aviation Rulemaking Advisory

Committee Meeting on Noise

Certification Issues

AGENCY: Federal Aviation

Administration (FAA), DOT.

ACTION: Notice of meeting.

SUMMARY: The FAA is issuing this notice

to advise the public of a meeting of the

Federal Aviation Administration

Aviation Rulemaking Advisory

Committee to discuss noise certification

issues.

DATES: The meeting will be held on May

18, 2000, at 10 a.m.

ADDRESSES: The meeting will be held at

the General Aviation Manufacturers

Association, 1400 K Street NW,

Washington, DC

FOR FURTHER INFORMATION CONTACT: Ms.

Angela. O. Anderson, (202) 267–9681,

Office of Rulemaking (ARM–204), 800

Independence Avenue, SW,

Washington, DC 20591.