Notice of Product Exclusions: China's Acts, Policies, and Practices Related to Technology Transfer, Intellectual Property, and Innovation, 52553-52566 [2019-21419]

Agencies

• Office of the United States Trade Representative

[Federal Register Volume 84, Number 191 (Wednesday, October 2, 2019)]
[Notices]
[Pages 52553-52566]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2019-21419]


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OFFICE OF THE UNITED STATES TRADE REPRESENTATIVE


Notice of Product Exclusions: China's Acts, Policies, and 
Practices Related to Technology Transfer, Intellectual Property, and 
Innovation

AGENCY: Office of the United States Trade Representative.

ACTION: Notice of product exclusions.

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SUMMARY: Effective August 23, 2018, the U.S. Trade Representative 
imposed additional duties on goods of China with an annual trade value 
of approximately $16 billion as part of the

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action in the Section 301 investigation of China's acts, policies, and 
practices related to technology transfer, intellectual property, and 
innovation. The U.S. Trade Representative's determination included a 
decision to establish a product exclusion process. The U.S. Trade 
Representative initiated the exclusion process in September 2018, and 
stakeholders have submitted requests for the exclusion of specific 
products. In July and September 2019, the U.S. Trade Representative 
granted exclusion requests. This notice announces the U.S. Trade 
Representative's determination to grant certain exclusion requests, as 
specified in the Annex to this notice. The U.S. Trade Representative 
will continue to issue decisions on pending requests on a periodic 
basis.

DATES: The product exclusions announced in this notice will apply as of 
the August 23, 2018 effective date of the $16 billion action, and will 
extend for one year after the publication of this notice. U.S. Customs 
and Border Protection will issue instructions on entry guidance and 
implementation.

FOR FURTHER INFORMATION CONTACT: For general questions about this 
notice, contact Assistant General Counsels Philip Butler or Megan 
Grimball, or Director of Industrial Goods Justin Hoffmann at (202) 395-
5725. For specific questions on customs classification or 
implementation of the product exclusions identified in the Annex to 
this notice, contact [email protected].

SUPPLEMENTARY INFORMATION: 

A. Background

    For background on the proceedings in this investigation, please see 
the prior notices issued in the investigation, including 82 FR 40213 
(August 23, 2017), 83 FR 14906 (April 6, 2018), 83 FR 28710 (June 20, 
2018), 83 FR 33608 (July 17, 2018), 83 FR 38760 (August 7, 2018), 83 FR 
40823 (August 16, 2018), 83 FR 47236 (September 18, 2018), 83 FR 47974 
(September 21, 2018), 83 FR 65198 (December 19, 2018), 84 FR 7966 
(March 5, 2019), 84 FR 20459 (May 9, 2019), 84 FR 29576 (June 24, 
2019), 84 FR 37381 (July 31, 2019), and 84 FR 49600 (September 20, 
2019).
    Effective August 23, 2018, the U.S. Trade Representative imposed 
additional 25 percent duties on goods of China classified in 279 8-
digit subheadings of the Harmonized Tariff Schedule of the United 
States (HTSUS), with an approximate annual trade value of $16 billion. 
See 83 FR 40823. The U.S. Trade Representative's determination included 
a decision to establish a process by which U.S. stakeholders may 
request exclusion of particular products classified within an 8-digit 
HTSUS subheading covered by the $16 billion action from the additional 
duties. The U.S. Trade Representative issued a notice setting out the 
process for the product exclusions, and opened a public docket. See 83 
FR 47236 (the September 18 notice).
    Under the September 18 notice, requests for exclusion had to 
identify the product subject to the request in terms of the physical 
characteristics that distinguish the product from other products within 
the relevant 8-digit subheading covered by the $16 billion action. 
Requestors also had to provide the 10-digit subheading of the HTSUS 
most applicable to the particular product requested for exclusion, and 
could submit information on the ability of U.S. Customs and Border 
Protection to administer the requested exclusion. Requestors were asked 
to provide the quantity and value of the Chinese-origin product that 
the requestor purchased in the last three years. With regard to the 
rationale for the requested exclusion, requests had to address the 
following factors:
     Whether the particular product is available only from 
China and specifically whether the particular product and/or a 
comparable product is available from sources in the United States and/
or third countries.
     Whether the imposition of additional duties on the 
particular product would cause severe economic harm to the requestor or 
other U.S. interests.
     Whether the particular product is strategically important 
or related to ``Made in China 2025'' or other Chinese industrial 
programs.
    The September 18 notice stated that the U.S. Trade Representative 
would take into account whether an exclusion would undermine the 
objective of the Section 301 investigation.
    The September 18 notice required submission of requests for 
exclusion from the $16 billion action no later than December 18, 2018, 
and noted that the U.S. Trade Representative periodically would 
announce decisions. In July 2019, the U.S. Trade Representative granted 
an initial set of exclusion requests. See 84 FR 37381. The U.S. Trade 
Representative granted a second set of exclusions in September 2019. 
See 84 FR 49600. The Office of the U.S. Trade Representative regularly 
updates the status of each pending request and posts the status within 
the web pages for the respective tariff action they apply to at https://ustr.gov/issue-areas/enforcement/section-301-investigations/tariff-actions.

B. Determination To Grant Certain Exclusions

    Based on the evaluation of the factors set out in the September 18 
notice, which are summarized above, pursuant to sections 301(b), 
301(c), and 307(a) of the Trade Act of 1974, as amended, and in 
accordance with the advice of the interagency Section 301 Committee, 
the U.S. Trade Representative has determined to grant the product 
exclusions set out in the Annex to this notice. The U.S. Trade 
Representative's determination also takes into account advice from 
advisory committees and any public comments on the pertinent exclusion 
requests.
    As set out in the Annex, the exclusions are reflected in 111 
specially prepared product descriptions, which cover 382 separate 
exclusion requests.
    In accordance with the September 18 notice, the exclusions are 
available for any product that meets the description in the Annex, 
regardless of whether the importer filed an exclusion request. Further, 
the scope of each exclusion is governed by the scope of the 10-digit 
HTSUS subheadings and product descriptions in the Annex to this notice, 
and not by the product descriptions set out in any particular request 
for exclusion.
    Paragraph A, subparagraphs (3)-(5) are conforming amendments to the 
HTSUS reflecting the modification made by the Annex.
    Paragraph B and C of the Annex correct errors by removing U.S. 
notes 20(v)(55) and 20(v)(88) of subchapter III of chapter 99 of the 
HTSUS, as set out in the Annex to the notice published at 84 FR 49600 
(September 20, 2019).
    As stated in the September 18, 2018 notice, the exclusions will 
apply as of the August 23, 2018 effective date of the $16 billion 
action, and extend for one year after the publication of this notice. 
U.S. Customs and Border Protection will issue instructions on entry 
guidance and implementation.
    The U.S. Trade Representative will continue to issue determinations 
on pending requests on a periodic basis.

Joseph Barloon,
General Counsel, Office of the U.S. Trade Representative.
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[FR Doc. 2019-21419 Filed 10-1-19; 8:45 am]
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