Update on Potential Withdrawal of Tariff Concessions and Increase in Applied Duties in Response to European Union (EU) Enlargement and EU Changes to Its Rice Import Regime

AGENCY:

Office of the United States Trade Representative.

ACTION:

Update for the public.

Background:

In Federal Register Notices 04-20543, dated September 10, 2004, and 04-21762, dated September 28, 2004, the Office of the U.S. Trade Representative sought comments concerning a list of goods for which tariff concessions may be withdrawn and duties may be increased in the event the United States cannot reach agreement with the European Union (EU) for adequate compensation owed under World Trade Organization (WTO) rules as a result of EU enlargement and EU changes to its rice import regime. The Trade Policy Staff Committee continues to review the public comments that it has received in response to these Federal Register notices. As announced at a public hearing on September 24, 2004, the United States had been subject to a deadline of October 1, 2004 to notify the WTO of its rights to withdraw substantially equivalent concessions under GATT 1994 Article XXVIII:3 in relation to the issue of EU enlargement. The European Communities has subsequently extended the United States' and other interested WTO Members' rights to withdraw substantially equivalent concessions for an additional six months, until April 30, 2005. In the case of the rice import regime change, the United States and other interested WTO Members have a right to withdraw substantially equivalent concessions until March 1, 2005. The United States Government is seeking an immediate negotiated resolution of both the enlargement and the rice Margin of Preference issues, which would alleviate the need for increases in U.S. tariffs. However, we retain the right to put into force the aforementioned tariff increases if negotiations do not result in successful provision of adequate compensation. The United States must notify the World Trade Organization at least 30 days before such increases could go into effect. The United States would also provide notification to the public of the list of goods affected at least thirty days before such increases could go into effect. The public is encouraged to call Laurie Molnar, Director for European and Mediterranean Trade Issues, Office of Europe and the Mediterranean, at (202) 395-3320, or Sharon Sydow, Director for Agriculture, Office of Agriculture, Office of the U.S. Trade Representative at (202) 395-6127 for periodic updates on the status of these issues.