The U.S. International Trade Commission (ITC) has instituted an investigation to assess the economic effects on the United States of China's accession to the World Trade Organization (WTO).

The investigation, Assessment of the Economic Effects on the United States of China's Accession to the WTO (Inv. No 332-403), was requested by the U.S. Trade Representative (USTR) in a letter received December 21, 1998. The USTR requested that the ITC analyze the economic effects on the United States of the possible reduction and elimination of China's tariff and non-tariff measures that might result from China's possible accession to the WTO, as well as China's compliance with WTO rules and standards. The ITC investigation will include the following:

• As requested, the ITC will conduct a comparative static analysis, based on actual trade and related economic variables from a recent representative, historical period. The analysis will reflect, to the extent possible, how those trade and related economic variables would have appeared in that same period had China been a member of the WTO with all adjustments made that would result from China's lowering and binding its tariffs, accepting disciplines on non-tariff barriers, and complying with the WTO.

• The ITC will report on standard U.S. economic variables, including aggregate exports and imports with China and the world, employment, average labor productivity, average labor compensation, and gross domestic product, as well as changes in U.S. trade, investment, output and employment at the sectoral level and changes in consumer prices of various affected goods and services.

• The ITC will provide a profile of China's trade and investment patterns. It will also estimate, to the extent possible, the effect of WTO accession on China's pattern of trade, rate of economic growth, and internal economic reform process.

• With regard to Chinese tariff reductions, the ITC will make two assessments. It will consider a 25 percent and a 50 percent across-the-board cut in Chinese MFN tariff rates, with each tariff reduction taken in turn from two sets of base rates --- from China's 1992 MFN tariff rates and from China's 1996 MFN tariff rates (or the most recent feasible year if 1996 data are not available).

• The ITC will assess the changes in U.S. trade, U.S. foreign investment, and the U.S. domestic economy resulting from certain non-tariff aspects of a possible Chinese WTO accession agreement, such as the elimination of China's WTO-inconsistent licensing, quota, and tendering requirements; the elimination of China's trade-related investment measures such as export performance requirements, local content, and trade and foreign exchange balancing; the elimination of barriers for agricultural and textile and apparel products; China's compliance with WTO rules in areas such as national treatment and state trading; and market openings in a number of Chinese service sectors. To the extent possible, the analysis will be quantitative.

The ITC will submit its confidential report to the USTR by June 1, 1999.

The ITC will hold a public hearing in connection with this investigation. The hearing will be held on February 23 (and 24 if necessary), 1999, at 9:30 a.m. at the ITC Building, 500 E Street, SW, Washington, DC. Requests to appear at the public hearing should be filed no later than 12 p.m. (noon) on February 12, 1999, with the Secretary, U.S. International Trade Commission, 500 E Street, SW, Washington, DC 20436. For hearing-related information, contact the Office of the Secretary at 202-205-1806.

The ITC also welcomes written submissions for the record in this investigation. Written statements (one original and 14 copies) should be submitted at the earliest practical date but no later than March 9, 1999. All written submissions, except for confidential business information, will be available for public inspection. Written submissions should be addressed to the Secretary, United States International Trade Commission, 500 E Street SW, Washington, D.C. 20436.

Further information on the scope of the investigation and appropriate submissions is available in the ITC's notice of investigation, dated January 20, 1999, which may be obtained from the ITC Internet server (www.usitc.gov) or by contacting the Office of the Secretary at the above address or at 202-205-1802.