[Federal Register Volume 61, Number 97 (Friday, May 17, 1996)]
[Notices]
[Pages 25000-25010]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-12572]



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OFFICE OF THE UNITED STATES TRADE REPRESENTATIVE
[Docket No. 301-92]


Request for Public Comment and Notice of Public Hearing: 
Determination Involving Expeditious Action; Proposed Determination 
Concerning What Further Action To Take Under Section 301(a) in Response 
to the People's Republic of China's Unsatisfactory Implementation of 
the 1995 Agreement on Enforcement of Intellectual Property and Market 
Access

AGENCY: Office of the United States Trade Representative.

ACTION: Notice of determination on expeditious action and proposed 
determination on further action; request for public comment; notice of 
public hearing.

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SUMMARY: Based on monitoring carried out pursuant to subsection 306(a) 
of the Trade Act of 1974 (Trade Act) (19 U.S.C. 2416(a)), the Acting 
United States Trade Representative (USTR) considers that China is not 
satisfactorily implementing the 1995 Agreement on Enforcement of 
Intellectual Property Rights and Market Access (1995 Agreement) China 
entered into to resolve the intellectual property rights (IPR) 
enforcement and market access issues subject to investigation under 
Title III, chapter I of the Trade Act. In light of this, the USTR must, 
pursuant to sections 306(b), determine what further action to take 
under section 301(a) of the Trade Act (19 U.S.C. 2411(a)). The USTR 
proposes to take the following action: To impose prohibitive tariffs on 
imports of certain products of China to be drawn from the lists of 
products set forth in the Annexes to this Notice.
    Since the products listed in Annex II to this Notice are subject to 
quantitative restrictions and it is essential to prevent surges of 
imports into the U.S. market, the USTR, pursuant to section 304(b)(1) 
of the Trade Act, has determined that expeditious action is necessary. 
Pursuant to section 301(a) and (c) of the Trade Act, the USTR has 
directed the Commissioner of Customs, to limit by date of export 
entries of the textile and apparel products listed in Annex II, over 
the 30-day period (commencing with exports from China on or after May 
15, 1996) to 15 percent of the 1996 adjusted level for each category of 
product. In addition, the USTR has requested the Chair of the Committee 
on Implementation of Textile Agreements (CITA) to amend CITA's relevant 
directives dated November 30, 1995, and December 13, 1995, in order to 
facilitate Customs implementation of this determination, and to inform 
Customs accordingly.
    Pursuant to section 304(b) and 306(c) of the Trade Act (19 U.S.C. 
2414(b) and 2416(c)), the USTR is seeking public comments and will hold 
a public hearing on June 6-7, 1996, regarding the expeditious action 
taken and a proposed determination on what further action to take.

EFFECTIVE DATE: Requests to testify at the hearing must be submitted by 
noon, Wednesday, May 22, 1996; written testimony is due by noon, 
Friday, May 31, 1996; and written rebuttals are due by 5:00 p.m., 
Monday, June 10, 1996. Written comments on the proposed

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determination are due by noon, Friday, June 14, 1996.

FOR FURTHER INFORMATION CONTACT:
 Questions concerning the products under consideration for imposition 
of prohibitive tariffs should be directed to Irving Williamson, Chair 
Section 301 Committee (202) 395-3432, Deborah Lehr, Deputy Assistant 
USTR for China and Mongolian Affairs (202) 395-5050, or Caroyl Miller 
(202) 395-3026 Deputy Chief Textiles Negotiator; questions about the 
public hearing, written testimony and written comments should be 
directed to Sybia Harrison, Staff Assistant to Section 301 Committee, 
(202) 395-3432. All of the above persons are located at the Office of 
the United States Trade Representative, 600 17th Street, NW, 
Washington, D.C. 20508.

SUPPLEMENTARY INFORMATION: On June 30, 1994, pursuant to section 302(b) 
of the Trade Act, the USTR initiated an investigation of those acts, 
policies and practices of China that were the basis for identification 
of China as a priority foreign country (PFC) under section 182 of the 
Trade Act. See 59 FR 35558 (July 12 1994). On February 4, 1995, the 
USTR determined that certain acts, policies and practices of the 
Chinese government with respect to the enforcement of IPRs and market 
access for persons relying on intellectual property protection are 
unreasonable and constitute a burden or restriction on U.S. commerce. 
The USTR also determined that trade action in the form of assessment of 
increased duties on certain products from China was appropriate. See 60 
FR 7230 (Feb. 7, 1995).
    On February 26, 1995, the government of China agreed to take 
extensive measures to enforce IPRs and provide market access for 
persons relying on intellectual property protection. On the basis of 
the measures that China agreed to undertake, the USTR decided that the 
action taken pursuant to section 301(c) of the Trade Act, to increase 
tariffs on certain products from China, was no longer appropriate and 
terminated that action. The USTR also determined to monitor, under 
section 306 of the Trade Act, China's implementation of the measures it 
had agreed to undertake and terminated the investigation. Pursuant to 
section 182(c)(1)(A) of the Trade Act, the USTR also decided to revoke 
China's designation as a PFC. See 60 FR 12583 (March 7, 1995). The 
Agreement setting forth the measures China agreed to take was formally 
signed on March 11, 1995.
    Since then, USTR and other agencies have worked closely and 
consulted frequently with the Chinese government on implementation of 
the IPR Agreement. The U.S. government has provided technical 
assistance and training on enforcement of IPRs and private sector 
interests have worked with individuals and firms in China to achieve 
market access for U.S. products and firms.
    While some progress has been made in the area of enforcement of 
IPRs, particularly with respect to enforcement of copyrights at the 
retail level, critical deficiencies are present in China's 
implementation of measures to address piracy at the production and 
wholesale distribution level. Piracy remains particularly rampant in 
Guangdong province. Manufacturers and distributors--primarily located 
in southern China--continue to produce pirated CDs, LDS and CD-ROMS in 
massive quantities. Due to lax enforcement at the point of production 
and at the border, export of pirated computer software, movies, sound 
recordings and other products have grown substantially over the past 
year. Products pirated in China have flooded Southeast Asia, Russia and 
the other Commonwealth of Independent States (CIS) countries. Latin 
American and European markets have also been targeted and the U.S. 
Customs Service has seized pirated CDS and CD-ROMs entering the United 
States from China. Finally, no significant progress has been made in 
providing market access to U.S. firms and products that rely on IPR 
protection.
    Based on the results of this monitoring, the USTR considers that 
China is not satisfactorily implementing the Agreement that was the 
basis for resolving the IPR enforcement and market access issues under 
investigation. Consequently, USTR is seeking comments on a proposed 
determination on what action to take under section 301(a) of the Trade 
Act.

Proposed Determination and Expeditious Action

    Pursuant to sections 306(b) and 301(c) of the Trade Act, the USTR 
proposes to take the following action: To impose prohibitive tariffs on 
imports of certain products of China to be drawn from the lists of 
products set forth in the Annexes to this notice.
    The decision on what specific products could be subject to 
prohibitive tariffs will take into consideration the written comments 
provided and any written and oral testimony offered at the public 
hearing.
    Since the products listed in Annex II to this Notice are subject to 
quantitative restrictions and it is essential to prevent surges of 
imports into the U.S. market, the USTR, pursuant to section 304(b)(1) 
of the Trade Act, has determined that expeditious action is necessary. 
Pursuant to section 301 (a) and (c) of the Trade Act, the USTR has 
directed the Commissioner of Customs, to limit by date of export 
entries of the textile and apparel products listed in Annex II, over 
the 30-day period (commencing with exports from China on or after May 
15, 1996) to 15 percent of the 1996 adjusted level for each category of 
product. In addition, the USTR has requested the Chair of CITA to amend 
CITA's relevant directives dated November 30, 1995, and December 13, 
1995, in order to facilitate customs implementation of this 
determination and to inform Customs accordingly.

Public Comment on Expeditious Action Taken, Proposed Determination and 
Hearing Participation

    In accordance with section 304(b) and 306(c) of the Trade Act, the 
USTR invites all interested persons to provide written comments on the 
action take under section 304(b)(1) and the proposed determination. 
With respect to the proposed trade action under section 301, comments 
may address: (1) the appropriateness of subjecting the products listed 
in the Annexes to this notice to prohibitive duties; (2) the level at 
which duties on particular products should be set; and (3) the degree 
to which imposition of prohibitive duties on particular products might 
have an adverse effect on U.S. consumers. Comments will be considered 
in recommending any determination or action under section 301 to the 
USTR.
    The USTR will also consider the written, oral, and rebuttal 
comments submitted in the context of a public hearing held pursuant to 
section 304(b) of the Trade Act and in accordance with 15 CFR 2006.7 
through 2006.9. The hearing will commence at 10:00 a.m. on Thursday, 
June 6, 1996, continue on June 7, 1996, if necessary. The hearing will 
be held in the Main Hearing Room (Room 101) at the U.S. International 
Trade Commission, 500 E Street, SW, Washington, D.C.
    Request to Testify: Interested person wishing to testify orally at 
the hearings must provide a written request to do so by noon, 
Wednesday, May 22, 1996, to Sybia Harrison, Staff Assistant to the 
Section 301 Committee, Office of the U.S. Trade Representative, 600 
17th Street NW, Washington, DC 20508. Requests to testify must include 
the following information: (1) name, address, telephone and fax 
numbers, and firm or affiliation; and (2) a brief summary of their 
presentation. Requests

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must conform to the requirements of 15 CFR 2006.8(a). After the 
Chairman of the Section 301 Committee considers the request to present 
oral testimony, Ms. Harrison will notify the applicant of the time of 
his or her testimony. Remarks at the hearing will be limited to 5 
minutes.
    Written Testimony: In addition, persons presenting oral testimony 
must submit their complete written testimony by noon on Friday, May 31, 
1996. In order to assure each party an opportunity to contest the 
information provided by other parties, USTR will entertain rebuttal 
briefs filed by any party by 5:00 p.m., Monday, June 10, 1996. 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 
the briefs or hearing and should be as concise as is possible.
    Requirements for Submissions: Written comments on the proposed 
determinations under section 306 of the Trade Act, written testimony, 
and rebuttal briefs must be filed in accordance with the requirements 
set forth in 15 CFR 2006.8(b) and are due according to the relevant 
deadlines noted above. 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, Room 223, USTR, 600 17th St., N.W., Washington, D.C. 20508.
    Written comments, testimony, and briefs will be placed in a file 
(Docket 301-92) 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 
confidential business 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 the twenty 
copies and must be accompanied by a nonconfidential summary of the 
confidential information. The nonconfidential summary will be placed in 
the Docket open to public inspection. An appointment to review the 
docket (Docket No. 301-92) 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 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.

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[FR Doc. 96-12572 Filed 5-15-96; 12:19 pm]
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