WTO Dispute Settlement Proceeding Regarding Egypt-Measures Affecting Imports of Textile and Apparel Products

AGENCY:

Office of the United States Trade Representative.

ACTION:

Notice; request for comments.

SUMMARY:

The Office of the United States Trade Representative (USTR) is providing notice that on December 23, 2003, in accordance with the Marrakesh Agreement Establishing the World Trade Organization (WTO Agreement), the United States requested consultations with Egypt regarding the import duties that Egypt applies to textile and apparel products. USTR believes the duties Egypt actually applies (on a “per article” basis) greatly exceed the ad valorem bound rates that Egypt agreed to apply in the Uruguay Round of WTO negotiations.

USTR invites written comments from the public concerning the issues raised in this dispute.

DATES:

Although USTR will accept any comments received during the course of the dispute settlement proceedings, comments should be submitted on or before March 26, 2004, to be assured of timely consideration by USTR.

ADDRESSES:

Submit comments to Sandy McKinzy, Monitoring and Enforcement Unit, Office of the General Counsel, Room 122, Office of the United States Trade Representative, 600 17th Street, NW., Washington, DC 20508, Attn: Egypt Textile and Apparel Dispute. Telephone: (202) 395-3582.

FOR FURTHER INFORMATION CONTACT:

Jason Kearns, Assistant General Counsel, Office of the United States Trade Representative, 600 17th Street, NW., Washington, DC (202) 395-3582.

SUPPLEMENTARY INFORMATION:

Section 127(b) of the Uruguay Round Agreements Act (URAA) (19 U.S.C. 3537(b)(1) requires that notice and opportunity for comment be provided after the United States submits or receives a request for the establishment of a WTO dispute settlement panel. Consistent with this obligation, but in an effort to provide additional opportunity for comment, USTR is providing notice that consultations have been requested pursuant to the WTO Dispute Settlement Understanding (DSU). If such consultations should fail to resolve the matter and a dispute settlement panel is established pursuant to the DSU, such panel, which would hold its meeting in Geneva, Switzerland, would be expected to issue a report on its findings and recommendations within six to nine months after it is established.

Major Issues Raised by the United States

On December 23, 2003, the United States requested consultations with the Government of Egypt pursuant to Articles 1 and 4 of the DSU, Article XXII:1 of the General Agreement on Tariffs and Trade 1994 (GATT 1994), and Article 7 of the Agreement on Textiles and Clothing (ATC) regarding the tariffs applied to textile and apparel products and the Decree of the President of the Arab Republic of Egypt No. 469 of the year 2001 (“Decree No. 469”) and any amendments, related regulations or other implementing measures.

In the Uruguay Round, Egypt agreed to remove a general prohibition on the importation of apparel and made-up textile products by January 1, 2002. It also agreed to bind its duties under HS Chapters 61 (articles of apparel and clothing, knitted and crocheted) and 62 (articles of apparel and clothing, not knitted or crocheted) at an ad valorem rate of 46 percent in 2003, 43 percent in 2004 and 40 percent thereafter. Moreover, it agreed to bind its duties under HS Chapter 63 (other made up textile articles; sets; worn clothing) at an ad valorem rate of 41 percent in 2003, 38 percent in 2004, and 35 percent thereafter.

USTR understands that, on December 31, 2001, just before the import prohibition was set to expire, President Mubarak issued Decree No. 469 amending the customs duties applicable to a number of imported articles, including articles that enter under HS Chapters 61, 62 and 63. The amended duties were specific (i.e., in Egyptian pounds (L.E.) per piece of clothing), rather than ad valorem. It appears that the specific duties applied by Egypt greatly exceed Egypt's bound rates of duty. Specifically, it appears that the ad valorem equivalent of these duties range from a low of 141 percent to a high of 51,296 percent—all well above the bound rates. USTR therefore believes that these tariffs, Decree No. 469 and any related measures are inconsistent with the obligations of Egypt under several WTO provisions, including Article II of the GATT 1994 and Article 7 of the ATC.

Public Comment: Requirements for Submissions

Interested persons are invited to submit written comments concerning the issues raised in the dispute. Persons submitting comments may either send one copy by fax to Sandy McKinzy at (202) 395-3640, or transmit a copy electronically to FR0417@ustr.gov, with “Egypt Textile Tariffs (DS305)” in the subject line. For documents sent by fax, USTR requests that the submitter provide a confirmation copy to the electronic mail address listed above.

USTR encourages the submission of documents in Adobe PDF format, as attachments to an electronic mail. Interested persons who make submissions by electronic mail should not provide separate cover letters; information that might appear in a cover letter should be included in the submission itself. Similarly, to the extent possible, any attachments to the submission should be included in the same file as the submission itself, and not as separate files.

Comments must be in English. A person requesting that information contained in a comment submitted by that person be treated as confidential business information must certify that such information is business confidential and would not customarily be released to the public by the commenter. Confidential business information must be clearly designated as such and “BUSINESS CONFIDENTIAL” must be marked at the top and bottom of the cover page and each succeeding page.

Information or advice contained in a comment submitted, other than business confidential information, may be determined by USTR to be confidential in accordance with section 135(g)(2) of the Trade Act of 1974 (19 U.S.C. 2155(g)(2)). If the submitter believes that information or advice may qualify as such, the submitter—

(1) Must clearly so designate the information or advice;

(2) Must clearly mark the material as “SUBMITTED IN CONFIDENCE” at the top and bottom of the cover page and each succeeding page; and

(3) Is encouraged to provide a non-confidential summary of the information or advice.

Pursuant to section 127(e) of the URAA (19 U.S.C. 3537(e)), USTR will maintain a file on this dispute settlement proceeding, accessible to the public, in the USTR Reading Room, which is located at 1724 F Street, NW., Washington, DC 20508. The public file will include non-confidential comments received by USTR from the public with respect to the dispute; if a dispute settlement panel is convened, the U.S. submissions to that panel, the submissions, or non-confidential summaries of submissions, to the panel received from other participants in the dispute, as well as the report of the panel; and, if applicable, the report of the Appellate Body. An appointment to review the public file (Docket WTO/DS-305, Egypt Textile and Apparel Dispute) may be made by calling the USTR Reading Room at (202) 395-6186.

The USTR Reading Room is open to the public from 9:30 a.m. to noon and 1 p.m. to 4 p.m., Monday through Friday.