[Code of Federal Regulations]
[Title 3, Volume 1]
[Revised as of January 1, 2003]
From the U.S. Government Printing Office via GPO Access
[CITE: 3CFRMar5]
Memorandum of March 5, 2002
Action Under Section 203 of the Trade Act of 1974 Concerning Certain Steel
Products
Memorandum for the Secretary of the Treasury[,] the Secretary of Commerce[,
and the] United States Trade Representative
On December 19, 2001, the United States International Trade
Commission (ITC) submitted a report to me that contained
determinations pursuant to section 202 of the Trade Act of
1974, as amended (the ``Trade Act''), that (a) certain carbon
flat rolled steel, including carbon and alloy steel slabs,
plate (including cut-to-length plate and clad plate), hot-
rolled steel (includ- ing plate in coils), cold-rolled steel
(other than grain-oriented electrical steel), and corrosion-
resistant and other coated steel (collectively, ``certain flat
steel''); (b) carbon and alloy hot-rolled bar and light shapes
(``hot-rolled bar''); (c) carbon and alloy cold-finished bar
(``cold-finished bar''); (d) carbon and alloy rebar
(``rebar''); (e) carbon and alloy welded tubular products
(other than oil country tubular goods) (``certain tubular
products''); (f) car
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bon and alloy flanges, fittings, and tool joints (``carbon and
alloy fittings''); (g) stainless steel bar and light shapes
(``stainless steel bar''); and (h) stainless steel rod are
being imported into the United States in such increased
quantities as to be a substantial cause of serious injury, or
the threat thereof, to the domestic industries producing like
or directly competitive articles. The ITC commissioners were
equally divided with respect to the determination required
under section 202(b) regarding whether (i) carbon and alloy
tin mill products (``tin mill products''); (j) stainless steel
wire; (k) tool steel, all forms; and (l) stainless steel
flanges and fittings (``stainless steel fittings'') are being
imported into the United States in such increased quantities
as to be a substantial cause of serious injury, or threat of
serious injury, to the domestic industries producing like or
directly competitive articles. The ITC provided detailed
definitions of the products included in categories (a) through
(l) and their corresponding subheadings under the Harmonized
Tariff Schedule of the United States (HTS) in Appendix A to
its determination, set out at 66 Fed. Reg. 67304, 67308-67311
(December 28, 2001).
The report of the ITC also contained findings pursuant to
section 311(a) of the North American Free Trade Agreement
Implementation Act (the ``NAFTA Implementation Act'') as to
whether imports from Canada and Mexico, considered
individually, account for a substantial share of total imports
and contribute importantly to the serious injury, or threat
thereof, caused by imports. The ITC made negative findings
with respect to imports from Canada of certain flat steel, tin
mill products, rebar, stainless steel rod, and stainless steel
wire; and also made negative findings with respect to imports
from Mexico of tin mill products, hot-rolled bar, cold-
finished bar, rebar, certain tubular products, stainless steel
bar, stainless steel rod, and stainless steel wire. The ITC
made affirmative findings with respect to imports from Canada
of hot-rolled bar, cold-finished bar, carbon and alloy
fittings, and stainless steel bar; and also made affirmative
findings with respect to imports from Mexico of certain flat
steel, and carbon and alloy steel fittings. The ITC
commissioners were equally divided with respect to imports
from Canada of certain tubular products. By February 4, 2002,
the ITC provided additional information in response to a
request under section 203(a)(5) of the Trade Act
(``supplemental report'') made by the United States Trade
Representative (the ``USTR'') on January 3, 2002.
Having considered the determinations of both groups of
commissioners with regard to tin mill products, tool steel,
stainless steel wire, and stainless steel fittings, I have
determined, pursuant to section 330(d)(1) of the Tariff Act of
1930, as amended, to consider the determinations of the groups
of commissioners voting in the affirmative with regard to tin
mill products and stainless steel wire to be the determination
of the ITC, and the determinations of the groups of
commissioners voting in the negative with regard to tool steel
and stainless steel fittings to be the determination of the
ITC.
By Proclamation signed today (the ``Proclamation'') and after
considering all relevant aspects of the investigation,
including the factors set forth in section 203(a)(2) of the
Trade Act and the supplemental report, I have implemented
actions of a type described in section 203(a)(3). I have
determined that the most appropriate actions are safeguard
measures in the form of an increase in duties on imports of
certain flat steel, other than slabs (including plate, hot-
rolled steel, cold-rolled steel, and coated steel), hot-
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rolled bar, cold-finished bar, rebar, certain welded tubular
products, carbon and alloy fittings, stainless steel bar,
stainless steel rod, tin mill products, and stainless steel
wire, as defined in paragraph 7 of the Proclamation, and in
the form of a tariff rate quota (TRQ) on imports of slabs,
with an increase in currently scheduled rates of duties for
imports over the TRQ limits. I have implemented these
safeguard measures for a period of 3 years plus 1 day.
Specifically, I have established the following safeguard
measures:
(a) certain flat steel: with regard to slabs, a TRQ of 4.90
million metric tons in the first year of the measure, 5.35
million metric tons in the second year, and 5.81 million
metric tons in the third year, with no increase in duties for
imports below the within-quota level and an increase in duties
of 30% ad valorem for imports above the within-quota level in
the first year of the measure, 24% in the second year, and 18%
in the third year; and with regard to certain flat steel,
other than slab (including plate, hot-rolled steel, cold-
rolled steel and coated steel), an increase in duties of 30%
ad valorem in the first year, 24% in the second year, and 18%
in the third year;
(b) hot-rolled bar: an increase in duties of 30% ad valorem
in the first year of the measure, 24% in the second year, and
18% in the third year;
(c) cold-finished bar: a increase in duties of 30% ad valorem
in the first year of the measure, 24% in the second year, and
18% in the third year;
(d) rebar: an increase in duties of 15% ad valorem in the
first year of the measure, 12% in the second year, and 9% in
the third year;
(e) certain welded tubular products: an increase in duties of
15% ad valorem in the first year of the measure, 12% in the
second year, and 9% in the third year;
(f) carbon and alloy fittings: an increase in duties of 13%
ad valorem in the first year of the measure, 10% in the second
year, and 7% in the third year;
(g) stainless steel bar: an increase in duties of 15% ad
valorem in the first year of the measure, 12% in the second
year, and 9% in the third year;
(h) stainless steel rod: an increase in duties of 15% ad
valorem in the first year of the measure, 12% in the second
year, and 9% in the third year;
(i) tin mill products: an increase in duties of 30% ad
valorem in the first year of the measure, 24% in the second
year, and 18% in the third year; and
(j) stainless steel wire: an increase in duties of 8% ad
valorem in the first year of the measure, 7% in the second
year, and 6% in the third year.
Pursuant to section 312(a) of the NAFTA Implementation Act,
after consideration of the report and supplemental reports of
the ITC, I further determine that imports of certain flat
steel, hot-rolled bar, cold-finished bar, rebar, certain
tubular products, carbon and alloy fittings, stainless steel
bar, stainless steel rod, tin mill products, and stainless
steel wire that are products of Canada and Mexico either do
not account for a substantial share of total imports of these
products, or are not contributing importantly to serious
injury or the threat of serious injury. Therefore, pursuant to
section 312(b) of the NAFTA Implementation Act, the safeguard
measure will not apply to imports of certain flat steel, hot-
rolled bar, cold-finished bar, rebar,
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certain tubular products, carbon and alloy fittings, stainless
steel bar, stainless steel rod, tin mill products, and
stainless steel wire that are the product of Canada or Mexico.
Similarly, the safeguard measures will not apply to imports of
these products that are the product of Israel or Jordan.
The safeguard measures also will not apply to imports of
certain flat steel, tin mill products, hot-rolled bar, cold-
finished bar, rebar, certain tubular products, carbon and
alloy fittings, stainless steel bar, stainless steel rod, or
stainless steel wire that are the product of a developing
country that is a member of the World Trade Organization
(WTO), as long as that country's share of imports into the
United States of the product, based on a recent representative
period, does not exceed 3 percent, provided that all such
developing country WTO members collectively account for not
more than 9 percent of total imports of that product. For
purposes of the safeguard measures established under the
Proclamation, I determine that the beneficiary countries under
the Generalized System of Preferences are developing
countries. Subdivision (d)(i) of U.S. Note 11 to subchapter
III of chapter 99 of the Harmonized Tariff Schedule of the
United States (Note 11) in the Annex to the Proclamation
identifies those developing countries that are WTO members,
and subdivision (d)(ii) identifies the products of such
countries to which the safeguard measures shall not apply.
I instruct the USTR to review data on imports of products
listed in paragraph 7 of the Proclamation from countries
listed in subdivision (d)(i) of Note 11 on a quarterly basis.
If imports of such a product from such a country increase by a
material amount, I instruct the USTR to initiate consultations
with the country regarding the circumstances under which the
increase occurred and whether the country plans to take action
to reduce imports to historical levels. If, on the basis of
the information exchanged during consultations, data on
imports, domestic steel demand, growth in the U.S. economy,
shifts in other countries' trade patterns, and any other
relevant factors, the USTR determines that the increase in
imports of such product from such country undermines the
effectiveness of the pertinent safeguard measure, he is
authorized, upon publication of a notice of such determination
in the Federal eister, to modify subdivision
(d)(ii) of Note 11 in the Annex to the Proclamation to include
such product from such country. I also authorize the USTR,
upon publication of a notice in the Federal
eister, to change the list of developing
countries to which the safeguard measures do not apply.
The steel products listed in clauses (i) through (ix) of
subdivision (b) of Note 11 in the Annex to the Proclamation
were excluded from the determinations of the ITC described in
paragraph 2 of that Proclamation, and are excluded from these
safeguard measures. I have also determined to exclude from
these safeguard measures the steel products listed in the
subsequent clauses of subdivision (b) of Note 11 in the Annex
to the Proclamation. The Trade Policy Staff Committee (TPSC)
is currently evaluating requests, submitted in response to 66
Fed. Reg. 54321, 54322-54323 (October 26, 2001), that
particular products be excluded from any safeguard measure
with regard to certain steel products. I instruct the USTR to
determine whether these particular products should be excluded
and, if so, within 120 days of the date of the Proclamation,
to publish in the Federal eister a notice to
modify subchapter III of chapter 99 to exclude them from the
safeguard measures. In making this determination, the USTR
shall consider any advice rendered by the TPSC.
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Similarly, I instruct the USTR, after receiving advice from
the TPSC, to determine whether any particular products should
be added to the list of those excluded from the safeguard
measures and, if so, to publish a notice in the Federal
eister in March of any year in which he
receives such a recommendation to modify subchapter III of
chapter 99 to exclude such particular products from the
measures. I further instruct the USTR, no later than 90 days
from today, to publish in the Federal eister a
notice of the procedures by which interested persons may
request the TPSC to recommend whether to exclude a particular
product.
I also instruct the USTR, prior to the effective date of the
safeguard measures established in the Proclamation, to conduct
consultations under Article 12.3 of the Agreement on
Safeguards with any WTO member having a substantial interest
as an exporter of a product subject to such safeguard
measures, provided that the WTO member requests such
consultations in a timely fashion. I instruct the USTR to
report to me on the results of such consultations. I instruct
the Secretary of the Treasury, pursuant to section 505(a) of
the Tariff Act of 1930 (19 U.S.C. 1505(a)), to prescribe by
regulation a date no later than 45 days after today at which
estimated duties for merchandise entered, or withdrawn from
warehouse for consumption, on or after 12:01 a.m., EST, March
20, 2002, and up to the 30th day after today, shall be
deposited.
I instruct the Secretary of the Treasury and the Secretary of
Commerce to establish a system of import licensing to
facilitate the monitoring of imports of certain steel
products. Pursuant to the authority granted me by section
203(g) of the Trade Act to provide for the efficient and fair
administration of all actions taken for the purpose of
providing import relief under section 203, I further instruct
the Secretary of Commerce, within 120 days of the effective
date of the safeguard measures established by the
Proclamation, to publish regulations in the Federal
eister establishing such a system of import
licensing.
I have determined that the safeguard measures will facilitate
efforts by the domestic industries to make a positive
adjustment to import competition and will provide greater
economic and social benefits than costs. If I determine that
further action is appropriate and feasible to facilitate
efforts by the pertinent domestic industry to make a positive
adjustment to import competition and to provide greater
economic and social benefits than costs, or if I determine
that the conditions under section 204(b)(1) of the Trade Act
are met, I shall reduce, modify, or terminate the safeguard
measures. In making this determination, I shall consider the
pertinent factors set out in section 203(a)(2) of the Trade
Act and, in particular, changes in capital and labor
productivity in the domestic industries; actual and planned
permanent closures of inefficient steel production facilities
in the United States and in other countries; consolidation of
United States steel producers; capital expenditures in the
domestic industries; prices for certain steel products in the
United States; and the overall effect that maintaining the
measure will have on consuming industries, workers, and the
United States economy as a whole.
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The United States Trade Representative is authorized and
directed to publish this memorandum in the Federal
eister.
GEORGE W. BUSH
THE WHITE HOUSE,
Washington, March 5, 2002.