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###### Office of the United States Trade Representative

# AGENCY:

Office of the United States Trade Representative (USTR). 

# ACTION:

Request for comments. 

# SUMMARY:

                        The interagency Trade Policy Staff Committee (TPSC) seeks public                               ( print page 22628)                            comment by May 25, 2001, as part of its efforts to develop product-specific rules of origin for the Free Trade Area of the Americas (FTAA), the U.S.-Chile Free Trade Agreement (Chile FTA), and the U.S.-Singapore Free Trade Agreement (Singapore FTA).                     

# FOR FURTHER INFORMATION CONTACT:

                        For procedural questions concerning public comments, contact Gloria Blue, Executive Secretary, Trade Policy Staff Committee, Office of the United States Trade Representative at (202) 395-3475. General questions concerning FTAA and Chile FTA negotiations should be addressed to the agency's Office of Western Hemisphere Affairs at (202) 395-5190. General questions concerning the Singapore FTA negotiations should be addressed to the agency's Office of Asia and the Pacific, at (202) 395-3430. Questions pertaining to this specific request for public comment as it relates to the Chile FTA and the Singapore FTA should be addressed to Matthew Rohde, Director for Customs Affairs, Office of the USTR, at (202) 395-3063 and as regards to the FTAA to Bennett Harman, Deputy Assistant US Trade Representative for Latin America, Office of the USTR, at (202) 395-5190. The official FTAA web site (                        *www.ftaa-alca.org*) contains information regarding the FTAA process, including official documents.                     

# SUPPLEMENTARY INFORMATION:

At the first Summit of the Americas, held in Miami, Florida on December 11, 1994, the President of the United States and 33 other democratically-elected leaders in the Western Hemisphere agreed to conclude an FTAA no later than 2005. Hemispheric leaders formally launched FTAA negotiations at the second Summit of the Americas, held in Santiago, Chile on April 18-19, 1998. The Presidents of the United States and Chile announced plans for a Chile FTA on November 29, 2000, and trade ministers from the two countries launched bilateral negotiations on December 6, 2000. The TPSC has already requested public comment on general U.S. positions and objectives in the FTAA (63 FR 128, July 6, 1998; 64 FR 248, December 28, 1999) and the Chile FTA (65 FR 241, December 14, 2000). 

On November 16, 2000, the President of the United States and the Prime Minister of Singapore agreed to negotiate a bilateral free trade agreement. The TPSC has previously requested public comment on negotiating objectives for the agreement and on how specific goods and services and other matters should be treated under the Singapore FTA (65 FR 71197; November 29, 2000 and 65 FR 80982; December 22, 2000). 

The United States is seeking rules of origin in the FTAA, the Chile FTA and the Singapore FTA which will ensure that only goods produced in the territories of the parties to those Agreements qualify for preferential tariff treatment. Concurrently, another objective of the United States will be to ensure that the rules of origin in the FTAA, the Chile FTA and the Singapore FTA are transparent, administrable, and trade facilitative. In order to meet these objectives, and based in part on responses to previous requests for public comment, in the negotiations to date on these agreements the United States has advocated pursuing the development of product-specific rules of origin. 

A product-specific approach to preferential rules of origin will require negotiators to establish, for each product or product sector, the degree of working or processing necessary within the Parties to the FTAA, Chile FTA, and the Singapore FTA to transform non-originating component materials into originating goods eligible for preferential tariff treatment. In the North American Free Trade Agreement (NAFTA), the predominant approach used for preferential rules of origin was a product-specific “tariff shift” approach, whereby the degree of working or processing is represented by a specified change in Harmonized Tariff System tariff classification for each product or sector.

The product-specific “tariff shift” approach is to be contrasted with rules of origin based upon a single generally-applicable rule, such as a “regional value content” test , or a single uniformly applied “tariff shift” standard. Comments previously submitted as well as experience over the years in administration of rules of origin suggest important advantages related to greater certainty in the administration of product-specific rules of origin than with a generally applicable “regional value content” rule of origin. The product-specific “tariff shift” approach also has advantages over a uniform “tariff shift” approach because Harmonized System tariff nomenclature was not drafted for the purpose of reflecting a particular transformation for all products by virtue of a shift between a single uniform level of digits within the Harmonized System. 

                    The NAFTA preferential rules of origin are listed at General Note 12 to the Harmonized Tariff Schedule of the United States (HTSUS), available on the U.S. International Trade Commission (ITC) web site at                     *http://dataweb.usitc.gov/​SCRIPTS/​tariff/​toc.html.*                     A detailed summary of the current U.S. negotiating position on market access issues in the FTAA, including rules of origin, can be found on the USTR web site at www.ustr.gov/​regions/​whemisphere/​ftaa.shtml.                 

The TPSC invites comments on all matters related to the development of product-specific rules of origin for the FTAA, the Chile FTA, and the Singapore FTA. It is recognized that comments or advice may or may not differ as to issues presented, respectively, by the FTAA, Chile FTA, and Singapore FTA. To the greatest extent possible, comments specifically should address the following questions, with clear designation as to the particular product or sector and the Harmonized System category or categories to which such comments apply. 
    - What, if any, are the specific market concerns or commercial practices for a particular product or sector that should be taken into account in the development of preferential rules of origin in the FTAA, the Chile FTA, and the Singapore FTA?
    - Would it be appropriate to propose product-specific preferential rules of origin that are similar to, if not the same as, existing NAFTA preferential rules of origin?
    - Alternatively, would it be appropriate to propose product-specific rules of origin that differ from existing NAFTA preferential rules of origin in order to take into account changed market conditions or different production and sourcing practices in Singapore, Chile or the rest of the Western Hemisphere?
    - A number of the NAFTA preferential rules of origin include qualifications on product-specific tariff-shift rules, such as an additional value-content criterion. Would it be appropriate to propose simpler preferential rules of origin for the FTAA, Chile FTA, or Singapore FTA that either rely solely on a product- or sector-specific tariff shift? Alternatively, in the event that an additional qualification on a product-specific tariff-shift rule may be deemed necessary, would a formulation of a value-content criterion that is simpler than what exists in NAFTA be appropriate?
    - Would it be appropriate to propose product-specific rules of origin that differ from existing NAFTA preferential rules of origin where the United States has or will soon have a most favored nation tariff rate of zero?
    - Would it be appropriate to propose for certain products or sectors that the parties to the FTAA, Chile FTA or       ( print page 22629)                          Singapore FTA establish a common external tariff and forego preferential rules of origin?                 

Request for Comments 

                    Request for public comment on specific rules of origin for the FTAA, the Chile FTA and the Singapore FTA. Those persons wishing to provide written comments should submit twenty (20) typed copies, no later than noon, May 25, 2001, to Gloria Blue, Executive Secretary, Trade Policy Staff Committee, Office of the U.S. Trade Representative, Room F516, 1724 F Street, NW., Washington, DC 20508. Nonconfidential comments may be submitted via the Internet to                     *gblue@ustr.gov.*                     Comments should clearly state the position taken and present evidence to support that position. Any business confidential material must be clearly marked as such on the cover page (or letter) and succeeding pages. Such submissions must be accompanied by a nonconfidential summary thereof.                 

Nonconfidential submissions will be available for public inspection at the USTR Reading Room, Office of the U.S. Trade Representative, Room 3, 1724 F Street, NW., Washington, DC. An appointment to review the file may be made by calling Brenda Webb at (202) 395-6186. The Reading Room is open to the public from 10 a.m. to 12 noon and from 1 p.m. to 4 p.m., Monday through Friday. 

Carmen Suro-Bredie, 

Chair, Trade Policy Staff Committee.

[FR Doc. 01-11306 Filed 5-3-01; 8:45 am] 

BILLING CODE 3190-01-P