CELEX: 21989A1218(01)
Language: en
Date: 1989-11-06 00:00:00
Title: Arrangement between the European Coal and Steel Community and the European Economic Community, and the Government of the United States of America concerning trade in certain steel products

No L 368 / 126                           Official Journal of the European Communities                              18 . 12 . 89
                                                        ARRANGEMENT
                                             concerning trade in steel pipes and tubes
            His Excellency Frans Andriessen
            Vice-President
            Commission of the European Communities
            200 Rue de La Loi
             1049 Brussels, Belgium
             Dear Mr Vice-President,
            With reference to the discussions held between representatives of the Government of the United
             States of America and the European Economic Community ('the EEC'), I have the honor to
             confirm that the Arrangement concerning trade in steel pipes and tubes attached to this letter and
             forming its integral part sets out the understanding reached between us.
             I shall be grateful , Mr Vice-President, if you kindly confirm that the attached Arrangement, as well
             as this letter, correctly sets out the understanding reached between us.
             I propose , Mr Vice-President, that if the EEC agrees to the provisions of the attached
             Arrangement, this letter and your reply to that effect constitute an arrangement between the
             Government of the United States of America and the EEC , which will enter into force on the date
             of your reply.
             Please accept, Mr Vice-President, the assurance of my highest consideration.
                                                                                           Sincerely,
                                                                                         Carla A. HILLS
 ---pagebreak--- 18 . 12 . 89                            Official Journal of the European Communities                          No L 368 / 127
             Dear Madame Ambassador,
             I have the honour to acknowledge receipt of your letter of today's date , which reads as follows:
                 'Dear Mr Vice-President:
                 With reference to the discussions held between representatives of the Government of the United
                 States of America and the European Economic Community ('the EEC'), I have the honour to
                 confirm that the Arrangement concerning trade in steel pipes and tubes attached to this letter
                 and forming its integral part sets out the understanding reached between us.
                 I shall be grateful, Mr Vice-President, if you would kindly confirm that the attached
                 Arrangement , as well as this letter, correctly sets out the understanding reached between us.
                 I propose, Mr Vice-President, that if the EEC agrees to the provisions of the attached
                 Arrangement, this letter and your reply to that effect constitute an arrangement between the
                 Government of the United States of America and the EEC, which will enter into force on the
                 date of your reply.
                 Please accept, Mr Vice-President , the assurance of my highest consideration.
                                                                                         Sincerely,
                                                                                       Carla A. HILLS'
             I have the honour to confirm that the EEC agrees to the provisions of the attached Arrangement,
             and that your letter, and this reply, shall constitute an arrangement between the EEC and the
             Government of the United States of America , in accordance with your proposal.
             Please accept, Madame Ambassador, the assurance of my highest consideration.
                                                                                         Sincerely,
                                                                            For the Council and the Commission
                                                                               of the European Communities
 ---pagebreak--- No L 368 / 128                               Official Journal of the European Communities                                  18 . 12 . 89
                                                           ARRANGEMENT
             between the European Economic Community and the Government of the United States of America
                                                concerning trade in steel pipes and tubes
             Recognizing the policy of the Government of the United States of America ( the 'US') and its Steel
             Trade Liberalization Program and also that of the European Economic Community (the 'EC') for
             its steel industry and its achievements in phasing out State aids ,
             Recognizing the aim of the US and EC to liberalize global trade in steel,
             Recognizing the policies of the US and EC that the adjustment and modernization of their steel
             industries should maximize reliance on market forces , and
             Recognizing that an objective of this Arrangement is to contribute to the orderly transition to open
            markets and to restore fair and open steel trade,
            THE EC AND THE US HAVE AGREED :
                1 . Basis of the Arrangement                                E
                     (a ) To pursue vigorously multilateral agreement in the Uruguay Round of Multilateral Trade
                          Negotiations to eliminate trade distorting practices in, and to ensure open markets for,
                          steel trade; and
                     (b) that the EC will restrain exports to , or destined for consumption in , the United States of
                          America (the 'USA') of products originating in the EC which are described in Article 3 (a)
                          (the 'Arrangement products') through 31 March 1992 , as the final phase of such restraints
                          on such exports.
                2 . Conditions : actions under US law
                     If, during the period in which this Arrangement is in effect, any investigations under the US
                     anti-dumping or countervailing duty statutes, Section 201 of the Trade Act of 1974 , Section
                     301 of the Trade Act of 1974 (other than Section 301 petitions relating to third country sales
                     by United States exporters), Section 232 of the Trade Expansion Act of 1962 , or Section 337
                     of the Tariff Act of 1930 (*) are initiated or litigation (including anti-trust litigation) is
                     instituted with respect to Arrangement products , then the EC shall be entitled to terminate the
                     Arrangement with respect to the Arrangement product which is the subject of the investigation
                     or litigation , after consultation with the US , at the earliest 15 days after such consultation. In
                     addition, if during these consultations it is determined that the investigation or litigation
                     threatens to impair the attainment of the objectives of this Arrangement, then the EC shall be
                     entitled to terminate the Arrangement, with respect to some or all of the Arrangement
                     products at the earliest 15 days after such consultations .
                     These consultations will take into account the nature of the investigation or litigation, the
                     identity of the petitioner or litigant, the amount of trade involved , the scope of relief sought
                     and other relevant factors .
            ( i ) With respect to any Section 337 investigations, the parties shall consult to determine the basis for the
                   investigation .
 ---pagebreak--- 18 . 12 . 89                              Official Journal of the European Communities                            No L 368 / 129
             3 . Product description and export ceilings
                  ( a) The EC shall restrain exports to, or destined for consumption in, the USA of
                        Arrangement products , as described in Annex A, originating in the EC to a level of
                         8,82 % of US apparent consumption for the periods 1 October 1989 through
                        31 December 1990 (the initial period), 1991 , and 1 January 1992 through 3 March 1992
                         (the end period). During these periods, export licenses shall be required for the
                        Arrangement products.
                        For the purposes of this Arrangement, the maximum quantities of products that may be
                        exported from the EC to the USA under the preceding sentence shall be the 'export
                        ceilings'. 'United States apparent consumption' shall equal shipments (deliveries) minus
                        exports, plus imports, as described in Appendix C.
                    (b) Within the limit set section 3 ( a), EC exports of oil country tubular goods as described in
                        Appendix A shall not exceed 9,00 % of US apparent consumption of oil country tubular
                        goods.
                    (c) Notwithstanding paragraphs ( a) and (b), Arrangement products exported from the EC
                        on or after 1 October 1989 and prior to the day after the publication day in the Official
                        Journal of the European Communities of the Regulations referred to in Article 5 ( a)
                        ( hereinafter called the 'interim period') shall be admitted into the USA without an export
                        license and certificate. This tonnage will be counted towards the export ceiling for each
                        Arrangement product for the initial period .
                        Such tonnage shall be determined on the basis of US import invoice data sorted by export
                        date. Date of export for all such shipments under this Arrangement will be that
                        established by the US Customs Service. No later than 1 March 1990 , the US will notify
                        the EC of the amount of tonnage exported on or after 1 October 1989 but without a
                        certificate.
                    (d) For purposes of this Arrangement, the USA shall comprise both the United States
                        Customs Territory and United States Foreign Trade Zones. Therefore, entries of
                        merchandise into the USA shall include administration of merchandise into a Foreign
                        Trade Zone. In consequence, the entry into the United States Customs Territory of
                        Arrangement products which have already entered into a Foreign Trade Zone shall not
                        then again be taken into account as imports of those Arrangement products .
                    (e) Where Arrangement products entered into the USA are subsequently re-exported
                        therefrom, without having been subject to substantial transformation , the export ceilings
                        for such products for the period corresponding to the time of such re-export shall be
                        increased by the same amount.
                    (f) Where the Arrangement products entered into the USA are subsequently re-exported
                        therefrom in the form of Arrangement products, and the imported Arrangement products
                        have been subject to double substantial transformation in the USA, as defined in
                        Appendix D, the export ceilings for such imported Arrangement products for the period
                        corresponding to the time of such re-export shall be increased by the quantity of the
                        re-exported doubly substantially transformed Arrangement products, up to a maximum
                        of. 100" 000- metric tonnes. The US and the EC will hold consultations upon request with
                        a view to appropriate amendments to Appendix D and adjustments to the
                        aforementioned maximum tonnage .
             4. Calculation and revision of United States apparent consumption forecast and of export
                 ceilings
                 (a) The US, with the agreement of the EC , will select an independent forecaster which will
                       provide the estimates of United States apparent consumption for the purposes of the
                       Arrangement. A first projection of United States apparent consumption for the initial
 ---pagebreak--- No L 368 / 130                          Official Journal of the European Communities                                 18 . 12 . 89
                      period for each category for which export ceilings are calculated as a percentage of US "
                      apparent consumption will be established as early as possible, and in any event before
                      1 November 1989 .
                  (b) The figures for projected 1990 United States apparent consumption will be revised in
                      December of 1989 and February, May, August and October of 1990 by the independent
                      forecaster, and appropriate adjustments will be made to the export ceilings for each
                      category taking into account licences already issued. Export ceilings calculated for the
                      initial period based on the May, August and October 1990 forecasts will use actual
                      October through December 1989 US apparent consumption.
                      For 1991 , a first projection of United States apparent consumption by category will be
                      established by October of 1990 . These figures will be revised in December 1990 and
                      February, May , August and October of 1991 .
                  (c) For the end period, a first projection of United States apparent consumption by category
                      will be established by October 1991 . These figures will be revised in December 1991 .
                  (d) By 1 May 1991 , adjustments to the 1991 export ceiling for each category will be made for
                      differences between the forecasted US apparent consumption and actual US apparent
                      consumption of that category in the initial period .
              5 . Export licenses and certificate
                  (a) The EC will require export licenses and certificate for all Arrangement products ,
                      publishing appropriate regulations in the Official journal of the European Communities .
                      Such export licenses and certificates will continue to be issued in a manner that will avoid
                      abnormal concentration in exports of Arrangement products to the USA, taking into
                      account seasonal trade patterns. The EC shall take action, including the imposition of
                      penalties , as may be necessary to make effective the obligations resulting from the export
                      licenses and certificates. The EC will inform the USA of any violations concerning the
                      export licenses and certificates which come to its attention and the action taken with
                      respect thereto.
                      The US will inform the EC of violations concerning the export licenses and certificates
                      which come to its attention and the action taken with respect thereto .
                      Export licenses will provide that shipment must be made within a period of three
                      months .
                      Export licenses will be issued against the export ceiling for the initial period 1991 or the
                      end period. Export licenses for 1991 or the end period may be used as early as
                      15 November of the previous period within a limit of 8,00 % of the export ceiling for
                      1991 , or the end period, respectively. Export licenses issued for the initial period and
                      1991 , respectively, may not be used after 31 December 1990, and 31 December 1991 ,
                      respectively, except that licenses not so used may be used during the first two months of
                      the respective following period, up to a maximum of 8,00 % of the export ceiling for the
                      current period.
                      The EC and the US may increase the above percentage limits by mutual agreement.
                  (b) The EC will require that the Arrangement products shall be accompanied by a certificate
                      substantially in the form set out in Appendix B , endorsed in relation to a license indicating
                      the day, month, and year in which the Arrangement product were exported, the
                      Arrangement product name and number and tonnage exported. If any of this information
                      is in a language other than English , the certificate must also contain an English language
                      translation of this information .
                      The US shall require presentation of such certificates as a condition for entry into the USA
                      of the Arrangement products. The US shall prohibit entry of such products not
                      accompanied by such a certificate .
 ---pagebreak--- 18 . 12 . 89                               Official Journal of the European Communities                             No L 368 / 131
             6 . Technical adjustments
                 ( a ) Export ceilings for Arrangement products may be adjusted by the EC with prior notice
                       to the US . Adjustments to increase or decrease the volume of the limit provided for in
                       Article 3 ( a) and the sub-limit provided for in Article 3 (b ) must be offset by an equivalent
                       volume change to one or more of the export ceilings for the categories established under
                       the US-EC Arrangement on certain steel products , entered into in 1989 , for the same
                       period. Notwithstanding the preceding sentences, no adjustment may be made under this
                       Article which results in an increase or a decrease in a specific export ceiling by more than
                       5,00 % by volume of the unadjusted export ceiling for the relevant period. The EC and
                       the US may agree to increase the above percentage limit.
                                               t
                 ( b) Normally, only one change in a specific products export ceiling in the initial period 1991
                       or the end period may be made by an adjustment under the preceding paragraph or use of
                       licenses in November/ December or January / February under Article 5 ( a). Accordingly,
                       changes in the initial period, 1991 or end period export ceilings by use of more than one of
                       these provisions may be made only upon agreement between the EC and the US .
             7. Short supply
                 ( a) If the US in consultation with the EC determines that, because of abnormal supply or
                       demand factors, (including substantial objective evidence such as allocation, extended
                       delivery periods, the willingness of domestic producers to supply the steel product at prices
                       which are not aberrations from prevailing domestic market prices, or other relevant
                       factors), the United States steel industry will be unable to meet demand in the USA for a
                       particular product, an additional tonnage shall be allowed for such product by a special
                       issue of licenses .
                 (b) The US shall make a determination under this Article within 30 days through a
                       transparent procedure on the basis of objective evidence from all relevant sources.
                       Furthermore, a 15 day fast track procedure shall be used for requests submitted during
                       periods during which capacity utilization is 90 % or more . Under such fast track
                       procedures there shall be a rebuttable presumption that short supply exists .
                 (c) Each authorized special issue export license and certificates derived therefrom shall be so
                       marked. Each such license must be used within 180 days after the date of the
                       authorization of the special issuance unless the US agrees to extend that period .
                 ( d) Notwithstanding paragraphs (a), (b ) and ( c), short supply procedures shall be no less
                       favorable than is provided for in legislation that may be enacted by the US .
             8 . Monitoring
                 ( a) The EC will , within one month of the end of each quarter* or upon request, supply the US
                       with such non-confidential information on all export licenses and certificates issued for
                       Arrangement products as is required for the proper functioning of this Arrangement. This
                       information will include at a minimum each licence number, certificate number* quantity,
                       date of export, category number and sub-category number.
                 (b) The US will collect and transmit quarterly, or upon request , to the EC all non-confidential
                       information relating to certificates received during the preceding quarter in respect of the
                       Arrangement products . The US will also collect and transmit non-confidential information
                       relating to actions taken in respect of the Arrangement products for violations of United
                       States Customs Law .
 ---pagebreak--- No L 368 / 132                         Official Journal of the European Communities                               18 . 12 . 89
              9 . Consultations
                  Consultations shall take place between the EC and the US on any matter arising out of the
                  operation of this Arrangement.
                  Consultations will also be held if there are indications that imports from third countries are
                  replacing imports from the EC.
                  If imports of a product within a limit or sub-limit significantly increase, relatively or
                  absolutely and in relation to US apparent consumption, so as to disturb traditional patterns of
                  trade, consultations shall be held upon in order to find an appropriate solution.
             10. Application
                  This Arrangement shall apply to the USA and to the territories to which the Treaty
                  establishing the European Economic Community is applied on the conditions laid down in
                  that Treaty.
             11 . Notices
                  For all purposes hereunder, the US and the EC shall be represented by, and all
                  communications and notices shall be given and addressed to:
                  — for the EC:
                      The Commission of the European Communities
                      Directorates-General for External Relations (I) and for
                      Internal Market and Industrial Affairs (III)
                      Rue de La Loi, 200
                      B-1049 Brussels
                  — for the Government of the United States of America:
                      Office of the United States Trade Representative
                      Assistant United States Trade Representative for Industry
                      Washington, D.C. 20506
                      United States Department of Commerce
                      Assistant Secretary for Import Administration
                      International Trade Administration
                      Washington, D.C. 20230
 ---pagebreak--- 18 . 12 . 89                                    Official Journal of the European Communities                                              No L 368 / 133
                                                                        ANNEX A
                                      Product category                                           Apparent consumption
                                                                                                     forecast category
              Total pipe and tube                                                   Total pipe and tube
              OCTG                                                                  OCTG
                                                                        Appendix A
                                                                   Imports by category
                                Product                                    HTS (*)                                  CN code
                                                           7304.20                                    7304 20
             OCTG                                          7305.20                                    7305 20
                                                           7306.20                                    7306 20 00
             Other pipe & tube                             7304.10                                    7304  10      (»)
                                                           7304.31             H                      7304  31      0)
                                                           7304.39             H                      7304  39      (')
                                                           7304.41            (»)                    7304   41      (»)
                                                           7304.49             0)                     7304  49      0)
                                                           7304.51             (»)                    7304  51      (')
                                                           7304.59             (»)                    7304  59      C1)
                                                           7304.90             (»)                    7304  90      (»)
                                                           7305.11                                    7305 11 00
                                                           7305.12                                    7305 12 00
                                                           7305.19                                    7305 19 00
                                                           7305.31.40          (»)                    7305 31 00 (1) (2)
                                                           7305.31.60          (')                    7305 39 00 (»)
                                                           7305.39            (»)                     7305 90 00 0 )
                                                           7305.90            (»)
                                                           7306.10            (»)                     7306 10
                                                           7306.30.10          (*)                    7306 30       (>) (2 )
                                                           7306.30.50                                 7306 40       (»)
                                                           7306.40             (')                    730650        OH2 ).
                                                           7306.50.10          (0                     7306 60       (')
                                                           7306.50.50          (»)                    7306 90       (>)
                                                           7306.60            (')
                                                           7306.90            (»)
                                                           8547.90.0020 (')                           8547 90 00 ( 3 )
             (*) The subheadings and code numbers referred to above are subject to revision when the EC or the US adopt modifications to
                 their respective import nomenclatures. When such modifications are adopted , prior notification shall be given to the other
                 party. HTS represents the Harmonized Tariff Schedule of the United States.
             (') Excluded if drill pipe of a kind used in drilling for earth , minerals or ores.
             (2) Excluded if tapered pipes and tubes principally used as parts of illuminating articles.
             (3) Covered if conduit tubing.
 ---pagebreak---  ---pagebreak--- EUROPEAN COMMUNITY                                                                                                                                                  *„w,v /
  1 Exporter (full name and address) -                                                                                   CERTIFICATE
                                                                                                             FOR THE EXPORT OF IRON AND STEEL PRODUCTS
                                                                                                                   TO THE UNITED STATES OF AMERICA
                                                                                              No                                                               ORIGINAL
  2 Consignee (full name and address)                                                       3 Export licence
                                                                                              No .       /
                                                                                              issued in                                                   (Member State)
ll                                                                                          4 Extract No
                                                                                              issued in
                                                                                                                 /
                                                                                                                                                          (Member State)
                                                                                               of export licence No        /
                                                                                               issued in                                                  ( Member State)
NOTES
A. This certificate must be completed on a typewriter and in English:
B. This certificate and the export licence or the extract thereof to which it refers must be produced at the Customs office at which Customs formalities for export to the
   United States of America are completed .
C. This certificate, duly -endorsed by the Customs office shown in box no 7. must be produced to the competent authorities in the United States of America at the time
   of importation.
  5 Marks and numbers - Number and kind of packages - Category and detailed description of iron and steel products                       6 Quantity (metric tonnes)
  7 ENDORSEMENT BY THE COMPETENT CUSTOMS OFFICE IN THE EUROPEAN COMMUNITY
     The quantity (metric tonnes) of iron and steel products shown above has been attributed           to the export licence shown in box no 3
             to the extract shown in box no 4 .*)
     Customs export document :                                                            Signature :                                  Stamp :
          type :
          number ;
          date: |
     Customs office :
     Member State :
    *) The appropriate box to be indicated like this :
 ---pagebreak---  ---pagebreak--- 18 . 12 . 89                                 Official Journal of the European Communities                                           No L 368 / 137
                                                                     Appenaic C
                                            Concordance of US shipments, exports, and imports
                                                                Shipments            Exports (**)                 Imports (**)
                                                 Type *)
                                                                 (category)           (schedule B)                    (HTS)
             Total pipe and tube                  C             18                 7304.10                      7304.10
                                                  C             19                 7304.20                      7304.20
                                                 c              20                 7304.31                      7304.31
                                                 c              21A                7304.39                      7304.39
                                                 c              21B                7304.90                      7304.90
                                                 c              22A                7305.11                      7305.11
                                                 c              22B                7305.12                      7305.12
                                                 c                                 7305.19                      7305.19
                                                 c                                 7305.20                      7305.20
                                                 c                                 7305.31                      7305.31
                                                 c                                 7305.39                      7305.39
                                                 c                                 7305.90                      7305:90
                                                 c                                 7306.10                      7306.10
                                                 c                                 7306.20                      7306.20
                                                 c                                 7306.30                      7306.30
                                                 c                                 7306.60                      7306.60
                                                 c                                 7306.90                      7306.90
                                                 c                                 7307.92.3010                 7307.92.30
                                                 c                                 7307.92.3030                 8547.90.0020
                                                                                   8547.90.0020
                                                 A              18                 7304.51                      7304.51
                                                 A              19,20              7304.59                      7304.59
                                                 A              21A , 21B          7306.50                      7306.50
                                                 A              22A , 22B          7307.22.1000                 7307.22.10
                                                 S              21C                7304.41                      7304.41
                                                 s              21D                7304.49                      7304.49
                                                 s                                 7306.40                      7306.40
             OCTG (included in                   c              19                 7304.20                      7304.20
             total pipe and tube)                c                                 7305.20                      7305.20
                                                 c                                 7306.20                      7306.20
             Line pipe (included in              c              20                 7304.10                      7304.10
             total pipe and tube)                c                                 7305.11                      7305.11
                                                 c                                 7305.12                      7305 ; 12
                                                 c                                 7305.19                      7305.19
                                                 c                                 7306.10                      7306.10
             Stainless (included                 s              21C                7304.41                      7304.41
             in total pipe and tube )            s              21D                7304.49                      7304.49
                                                 s                                 7306.40                     7306.40
             Other pipe and tube                 c              18                 7304.31                      7304.31
             (included in total pipe and •
             tube)                               c              21A                7304.39                     7304.39
                                                 c              21B                7304.90                     7304.90
                                                 c              22A                7305.31                     7305.31
                                                 c              22B                7305.39                     7305.39
                                                 c                                 7305.90                     7305.90
                                                 c                                 7306.30                     7306.30
                                                 c                                 7306.60                     7306.60
                                                 c                                 7306.90                     7306.90
                                                 c                                 7307.92.3010                7307.92.30
                                                 c                                 7307.92.3030
                                                                                   8547.90.0020                8547.90.0020
              ( ) C — Carbon
                  S  — Stainless
                  A — Alloy
             (**) These numbers are subject to revision when the United States adopts modifications to the applicable import or export
                  nomenclatures. Technical adjustments will be made as necessary.
 ---pagebreak--- No L 368 / 138                           Official Journal of the European Communities                         18 . 12 . 89
                                                           Shipments             Exports            Imports
                                              Type
                                                           (Category)          (schedule B)          (HTS)
                                             A             18                7304.51           7304.51
                                             A             21A               7304.59           7304.59
                                             A             21B               7306.50           7306.50
                                             A             22B               7307.22.1000      7307.22.10
                                                           22B
            Standard pipe and tube           C             18                7304.39           73 04.39.0010
            (included in other pipe and
            tube)                            C                               7306.30.1500      7304.39.0015
                                             C                               8547.90.0020      7304.39.0025
                                             C                                                 7304.39.0060
                                             C                                                 7304.39.0090
                                                                                               7306.30.5025
                                                                                               7306.30.5030
                                                                                               7306.30.5040 .
                                                                                               7306.30.5055
                                                                                               7306.30.5580
                                                                                               8547.90.0020
            Structural pipe and tube         C             22A               7304.90.4000      7304.90.1000
            (included in other pipe and
            tube)                            C             22B               7305.39           7305.31
                                             C                               7305.90           7305.39
                                             C                               7306.60.2500      7305.90
                                             C                               7306.90           7306.30.3000
                                             C                                                 7306.60.1000
                                             C                                                 7306.90
                                             A             22A               7305.31           7304.90.3000
                                             A             22B                                 7306.50.3000
                                             A                                                 7306.60.3000
            Mechanical tube (included        C             21A               7304.31           7304.31.3000
            in other pipe and tube)          C                               7304.51           7304.31.6050
                                             C                                                 7304.90.5000
                                             C                                                 7306.30.1000
                                             C                                                 7306.30.5015
                                             C                                                 7306.30.5020
                                             C                                                 7306.30.5035
                                             C                                                 7306.60.5000
                                             A             21A               7304.59           7304.51.1000
                                             A                               7304.90.6000      7304.51.5090
                                             A                               7306.50.4500      7304.59.1000
                                             A                               7306.60.6500      7304.59.6000
                                             A                                                 7304.59.8000
                                             A                                                 7304.90.7000
                                             A                                                 7306.50.1000
                                             A                                                 7306.50.5030
                                             A                                                 7306.50.5050
                                             A                                                 7306.50.5070
                                             A                                                 7306.60.7000
            Pressure tube (included in       C             21B               7306.30.1000      7304.31.6010
            other pipe and tube )            C                               7306.50.1000      7304.39.0005
                                             C                                                 7306.30.5010
                                             A             21B                                 7304.51.5030
                                             A                                                 7304.51.5050
                                             A                                                 7304.59.2030
                                             A                                                 7304.59.2050
                                             A                                                 7306.50.5010
                                                              Appendix D
                                        (to be specified in consultations between the parties)
 ---documentbreak--- 18 . 12 . 89                            Official Journal of the European Communities                           No L 368 / 139
                                                         CONSENSUS
             Dear Mr Vice-President
             In the course of discussions between the Government of the United States of America (the 'US') and
             the European Coal and Steel Community and the European Economic Community (collectively,
             the 'EC'), both parties have agreed to the following concerning steel trade:
                                                           Article 1
             1 . The US and the EC recognize that there is a need to achieve efficient new general disciplines in
             the context ^)f the Uruguay Round of Multilateral Trade Negotiations to avoid trade distorting
             practices.
             2 . The US and the EC recognize the economic importance of the steel sector for their economies,
             the history of public support and barriers to market access which have distorted trade in steel for
             many years , and the other specific characteristics of this sector.
             3 . To cover the period prior to the establishment of new GATT disciplines during the Uruguay
             Round, the US and EC have agreed to conclude this bilateral agreement , the basic objectives of
             which are :
             — to provide a transition toward the more liberal conditions for steel trade which will result from
                 the rules and disciplines of the GATT negotiated in the Uruguay Round,
             — to reduce distorting practices in steel, and
             — to establish a trading environment for steel that is fair and open.
             4 . This Agreement, while facilitating the achievement of the objectives described in paragraph 3 ,
             shall not prejudice the negotiating positions of the US or EC with respect to general disciplines on
             subsidies, dispute settlement or tariff and non-tariff measures in the GATT or in the Agreement on
             Interpretation and Application of Articles VI, XVI and XXIII of the General Agreement on Tariffs
             and Trade. The US and EC recognize that this Agreement cannot predetermine the results of the
             Uruguay Round of Multilateral Trade Negotiations or the techniques or modalities for achieving
             disciplines under negotiation in the Uruguay Round that may apply to the steel sector under
             general rules or otherwise.
             5 . The US and EC confirm that their mutual interests will be served by working together in the
             Uruguay Round to achieve multilateral agreement on rules imposing effective disciplines on public
             support, and limitations on tariff and non-tariff measures, that are consistent with the aims and
             principles of this Agreement. To obtain this objective, the US and EC agree that they will both seek
             such agreement in the Uruguay Round and coordinate their efforts to this end .
                                                           Article 2
             1 . The US and EC reaffirm , for purposes of this Agreement, their obligations under existing
             multilateral rules not to grant any export subsidy identified in the Illustrative List of Export
             Subsidies in the Annex to the Agreement on Interpretation and Application of Articles VI , XVI and
             XXIII of the General Agreement on Tariffs and Trade.
             2 . The US and the EC agree that other public support shall not be granted to their steel industries
             except as provided in Appendix A.
             3 . For purposes of this Agreement 'Public Support' to the steel industry means intervention
             specifically provided by law or in fact to that sector by the US or EC , their Member States or
 ---pagebreak--- No L 368 / 140                          Official Journal of the European Communities                                18 . 12 . 89
            States, or any regional or local authorities or through public resources in any form whatsoever. It
            shall in particular cover the foregoing of receipts, such as fiscal concessions, and the transfer of
            public resources to steel undertakings in the form of acquisitions of shareholdings or provisions of
            capital or similar financing which cannot be regarded as a genuine provision of risk capital
            according to usual investment practice in a market economy.
            4. Public support commitments taken by the US or EC before the entry into force of this
            Agreement and described in Appendix B shall not be affected by this Agreement.
                                                            Article 3
            Because tariff and non-tariff measures can restrict and distort steel trade flows , the US and the EC
            agree to implement liberalization of both tariff and non-tariff measures as follows:
            1 . Tariffs: Through negotiations in the Uruguay Round, the US and the EC agree to seek from all
                participants substantial reductions, harmonization, or, as appropriate, elimination of tariffs on
                steel , as well as a substantial increase in the scope of bindings.
            2 . Non-tariff measures: The US and the EC agree not to introduce any steel trade restrictive or
                distorting measures inconsistent with the provisions of the GATT or the instruments negotiated
                within the framework of GATT or under its auspices. Further, the US and EC agree not to take
                trade restrictive measures for balance of payments reasons . In addition, the US and EC agree to
                phase out all steel voluntary restraint agreements with third parties by 31 March 1992.
                                                            Article 4
            At a time when the US and EC have made, and will need to continue to make, structural
            adjustments to their steel capacities, they confirm their determination not to foster overcapacities in
            steel production through official export credits or tied aids. Therefore, the US and EC agree to seek
            expeditiously increased discipline over tied aid credits and other forms of subsidized official export
            credit support for steel plant and equipment in the OECD .
            When guaranteeing or granting such credits, the US and EC will take into consideration the
            viability of the projects and examine the possible repercussions on the stability of the steel market
            of the US or EC .
            The US and EC:
                Acknowledge that the interests of both parties are best served if agreement can be reached at an
                early stage on a common attitude on official facilities for a particular transaction;
                Reaffirm, therefore, the need to promote common attitudes, particularly on important
                transactions ;
                Recognize that in certain instances, notably when existing exchange of information procedures
                are perceived to be functioning in an unsatisfactory manner, face-to-'face consultations could
                facilitate the adoption of a common line;
                Undertake, in such circumstances, to respond favourably to any such request for early
                face-to-face consultations and to attend any meeting arranged in order to reach a common
                attitude in conjunction with other interested participants;
                and
                Confirm moreover the importance they attach to a strict observation of the arrangement on
                guidelines for officially supported export credits.
                                                            Article 5
            1 . The US and EC shall enter into consultations with each other concerning such representations
            as either party may make with respect to any matter affecting the operation of this Agreement.
            2. If a dispute arises between the US and EC arising out of, or related to, the interpretation or the
            application of this Agreement, and if such dispute cannot be settled by means of consultation
 ---pagebreak--- 18 . 12 . 89                              Official Journal of the European Communities                              No L 368 / 141
             within 15 days after a request therefor made by either party , then the US or EC may notify the
             other party that it is referring the dispute to binding arbitration and appoint an arbitrator. Within
              15 days of such notice, the other party must appoint a second arbitrator . Such arbitrators shall not
             have a financial interest in the dispute and shall not take instructions from either party.
             The two arbitrators appointed by the US and EC shall appoint a third arbitrator, selected from a
             list of arbitrators complied by the US and EC , or by random selection if necessary , within 15 days
             after the appointment of the second arbitrator. The third arbitrator shall not be a national of either
             party , shall not have a financial interest in the dispute, and shall serve as Chairman of the
             arbitration panel .
             The rules of procedure shall be established by the EC and the US or, failing that , by the arbitrators.
             The procedures shall assure a right to at least one hearing before the panel as well as the
             opportunity to provide written submissions and rebuttal arguments.
             Each party shall bear the cost of its own arbitrator and its presentation in the proceedings. The
             cost of the Chairman and the remaining cost of the proceeding shall be borne equally by the US and
             EC .
             3 . The panel shall make its decisions by majority vote.
             4 . Within three months after the Chairman is appointed, the panel shall determine whether there
             has been an infringement of this Agreement. The panel shall also determine the appropriate
             measures to remedy such infringement.
             In extraordinary circumstances that prevent the panel from meeting the required deadline, the
             parties may agree to extend the deadline but only to the extent necessary.
             5 . In the case of a clear and significant violation of Article 2 or 3 , the adversely affected party may
             propose a preliminary remedy to offset the effects of such a violation pending a final arbitral
             determination . The preliminary remedy shall be subject to the same guidelines as a final remedy.
             The procedures for establishing a preliminary remedy shall be as follows :
             ( a) If the matter has not been resolved through consultations within 15 days , and notice has been
                  given by the adversely affected party that it considers the matter to be a clear and significant
                  violation , the parties shall within five days appoint the Chairman of the arbitration panel by
                  agreement or by random selection from the mutually compiled list.
             ( b) After selection of the Chairman , the adversely affected party may submit to the Chairman a
                  proposed preliminary remedy to offset effects of such a violation. Within 15 days, the
                  Chairman must decide whether to authorize the proposed preliminary remedy, or to modify or
                  disapprove such proposed remedy. The decision of the Chairman on the existence, scope ,
                  nature and duration of the preliminary remedy shall be made taking into account the clarity
                  and significance of the violation and the reasonableness of the preliminary remedy in light of
                  the guidelines for a remedy .
             ( c) The preliminary remedy authorized by the Chairman may be applied by the adversely affected
                  party until extended , modified or terminated by the arbitration panel's final determination.
             6 . ( a) In making its interim relief and final remedy determinations under paragraphs 4 and 5 , the
                      panel shall take into account the following guidelines:
                       (i) Preference shall be given to measures that are (A) related to the product or products
                           associated with the violation , and (B) that increase or decrease export ceilings under
                           the Arrangement between the European Coal and Steel Community and the European
                           Economic Community, and the Government of the United States of America
                           concerning trade in certain steel products and the Arrangement on pipes and tubes
                           entered into in 1989 .
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                      (ii) If necessary to achieve the objectives of this Agreement with respect to an
                           infringement, the panel may authorize the imposition of temporary duties, or security
                           therefor, on imports of products originating in the territory of the infringing party into
                           the territory of the non-infringing party .
                           In designing such measures, the following shall be taken into account:
                           (A) the gravity and nature of the infringement
                           (B ) the duration thereof
                           (C) the adverse effects on the interests of the other party
                           and
                           (D)the proportion of US-EC trade in the product or products directly concerned by the
                                infringement.
                  (b) Measures decided by the arbitrators should not be applied cumulatively with national or
                      other provisions in respect of the same factual elements which constitute the infringement
                      whether they have already been decided or are decided subsequently.          ,,
            7. The US and EC must take measures specified by the panel in its determinations. If the US or
            EC fails to implement such measures and they are unable to agree on appropriate compensation or
            other remedial action, then the other party may propose to the panel suspension of equivalent
            benefits under this Agreement to the non-complying party . Such suspension shall take effect 30
            days after it is proposed to the panel unless the panel disapproves such action.
                                                             Article 6
             1 . This Agreement shall enter into force on the date of its acceptance by both parties and shall
             remain in force until 31 March 1992 .
             2 . This Agreement may be amended by mutual consent of the US and EC to take into account any
             new situation which may arise, in particular the results of the Uruguay Round negotiations.
             3 . Each party shall have the right to terminate this Agreement in the event of termination of the
            Arrangement concerning trade in certain steel products and the Arrangement on pipes and tubes
             entered into in 1989 .
             4 . The provisions of this Agreement only concern steel and for the purpose of this Agreement,
             'steel' shall mean those products described in Article 3 of the Arrangement concerning trade in
             certain steel products and the Arrangement on pipes and tubes entered into in 1989 .
             5 . This Agreement shall be of application in the territories described in Article 11 of the
            Arrangement concerning trade in certain steel products and the Arrangement on pipes and tubes
            entered into in 1989 .
             6 . This Agreement does not affect the rights and obligations of the parties under the GATT or
            other multilateral instruments negotiated under the auspices of the GATT .
            I shall be grateful, Mr Vice-President, if you would kindly confirm that the foregoing correctly sets
            out the understanding reached between us.
            Please accept, Mr Vice-President, the assurance of my highest consideration.
                                                                                           Sincerely,
                                                                                         Carla A. HILLS
 ---pagebreak--- 18 . 12 . 89                                Official Journal of the European Communities                                    No L 368 / 143
                                                                 Appendix A
             All public support to the steel industry is prohibited under the terms of this Agreement with the following
             exceptions:
             1 . Public support for research and development
                 Up to a maximum of 35 % net grant equivalent of the eligible costs as regards basic industrial research and
                 25 % in the case of applied research and development.
                 Eligible costs are only those which are directly related to research and development, excluding those related
                 to industrial application or commercial exploitation of the results.
             2 . Public support for environmental protection
                 Up to a maximum of 15 % net grant equivalent of the investment costs directly related to the environmental
                 measures concerned .
             3 . Public support for social purposes
                 Aid to costs of payment to workers made redundant or accepting early retirement by the permanent
                 discontinuance , curtailment or change of activities of steel undertakings.
             4 . Public support for closure
                 Aid to meet closure costs additional to social costs mentioned in paragraph 3 to steel companies which for a
                 period of not less than four consecutive years have been engaged in the production of steel products
                 described in Article 3 of the Arrangement concerning trade in certain steel products and the Arrangements
                 concerning trade in steel pipes and tubes between the US and EC and which permanently cease all such steel
                 production by the entire company up to a maximum of the higher of the following two values:
                 (a) the discounted value of the contribution to fixed costs obtainable from the plants over a three year
                     period less the advantages obtained by the firm from the closure; or
                 (b) the residual book value of the plants.
                                                                 Appendix B
             EC:      The commitments deriving from Commission Decision 89 / 218 / ECSC of 23 December 1988
                      concerning aid that the Italian Government proposes to grant to the public steel sector as consented to
                      unanimously by the Council at its meeting of 13 December 1988 , and from the Protocol No 20 to the
                      Act of Accession of Portugal to the European Communities .
             USA:     The benefits provided by Section 9303 (e) (3 ) of the Omnibus Budget Reconciliation Act of 1987 (24
                      USC 412) concerning reduced pension funding requirement for steel companies.
                      Any cost reduction or benefits under Chapter 11 of Title 11 of the United States Code, ( 11 USC
                      Sections 1101-1146), concerning voluntary bankruptcy proceedings .
 ---pagebreak--- No L 368 / 144                           Official journal of the European Communities                         18 . 12 . 89
             Dear Madame Ambassador,
             I have the honour to acknowledge receipt of your letter of today's date, which reads as follows:
                   V        '( ! )
                 I have the honour to confirm the agreement of the European Communities to the content of
                 your letter.
                 Please accept, Madame Ambassador, the assurance of my highest consideration.
                                                                                       Sincerely,
                                                                          For the Council and the Commission
                                                                             of the European Communities
            (*) See pages 139-143 of this Official Journal.
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             Information on the signing of the Arrangements and the Consensus between the European
                            Economic Community and the United States in the steel sector
             The Arrangements and the Consensus in the steel sector which the Council decided , on
             6 November 1989 , to conclude with the United States were signed on 20 November 1989 .
 ---documentbreak--- NA ---documentbreak--- NA ---documentbreak--- No L 368 / 146                           Official Journal of the European Communities                        18 . 12 . 89
                                               ASSENTS No 24 / 89 and No 25 / 89
            Acting pursuant to Article 95 of the Treaty establishing the European Coal and Steel Community
            the Council gave its assent, as requested by the Commission on 6 November 1989 , to:
             — the Commission Decision on the conclusion of an Arrangement and a Consensus with the                    ^
                 United States of America concerning trade in certain steel products ( 1 ),
             — the Commission Decision on the restriction of exports of certain steel products to the United
                 States of America (2).
                                                                                            For the Council
                                                                                             The President
                                                                                              R. DUMAS
            (') See page 98 of this Official Journal.
            (2) See page 21 of this Official Journal.