Office of the United States Trade Representative May 2011 – Federal Register Recent Federal Regulation Documents

In July 1999, pursuant to authority under Section 301 of the Trade Act of 1974, as amended (the Trade Act), and as authorized by the Dispute Settlement Body (DSB) of the World Trade Organization (WTO), the United States Trade Representative (Trade Representative) imposed additional duties on certain products of member states of the European Union (EU) as a result of the EU's failure to comply with the recommendations and rulings of the DSB in the EC-Beef Hormones dispute. In January 2009, the Trade Representative announced a determination to modify the list of products subject to additional duties by removing some products from the list of products subject to additional duties, and by adding replacement products. The January modification had an initial effective date of March 23, 2009. The Trade Representative subsequently delayed the additional duties on the replacement products in order to promote negotiations with the EU. The removal of products was not delayed. As a result, as of March 23, 2009, the additional duties applied only to a reduced list of products, consisting of those products covered in the original 1999 list that had not been subject to replacement. On May 13, 2009, the United States and the EU announced the signing of a Memorandum of Understanding (MOU) in the EC-Beef Hormones dispute. The MOU provides for the EU to make phased increases in market access by adopting a tariff-rate quota (TRQ) for certain beef products, in return for the United States making phased reductions in the additional duties. Under the first phase of the MOU, in August 2009 the EU opened up a TRQ in the amount of 20,000 metric tons, and the Trade Representative terminated the additional duties on the replacement products. (Those additional duties had been announced in January 2009 but had never entered into force.) The Trade Representative's action left in place a reduced list of products subject to additional duties. The MOU provides for the possibility of the United States and the EU to enter into a second phase starting in August 2012, in which the EU would increase the TRQ to 45,000 metric tons, and the United States would lift the remaining additional duties. As a result of a decision of the United States Court of Appeals for the Federal Circuit, the Trade Representative has determined to terminate the remaining additional duties in advance of the August 2012 start date of the possible second phase of the MOU. The United States continues to have an authorization from the WTO DSB, and the right under the MOU, to suspend concessions on EU products. At this time, however, the MOU is operating successfully by providing increased market access to U.S. beef producers. In light of the currently successful implementation of the MOU, the fact that all additional duties would have to be removed in August 2012 under a possible second phase of the MOU, and to encourage continued cooperation under the MOU, the Trade Representative has determined not to take steps at this time to exercise U.S. rights to impose additional duties on EU products in connection with the EC-Beef Hormones dispute. The Trade Representative will continue to monitor EU implementation of the MOU and other developments affecting market access for U.S. beef products. If EU implementation and other developments do not proceed as contemplated, the Trade Representative will consider additional actions under Section 301 of the Trade Act.