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Public Papers - 1991

Proclamation 6343 -- To Implement an Accelerated Schedule of Duty Elimination Under the United States-Canada Free-Trade Agreement, to Make Technical and Conforming Changes to the Harmonized Tariff Schedule of the United States, and for Other Purposes

1991-09-28

By the President of the United States

of America

A Proclamation

1. On January 2, 1988, the President entered into the United States-Canada Free-Trade Agreement (the Agreement). The Agreement and certain letters exchanged between the Governments of Canada and the United States were approved by the Congress in section 101(a) of the United States-Canada Free-Trade Agreement Implementation Act of 1988 (the Implementation Act) (Public Law 100 - 449). The Agreement entered into force on January 1, 1989.

2. Section 201(b) of the Implementation Act grants the President, subject to the consultation and lay-over requirements of section 103(a) of the Implementation Act, the authority to proclaim such modifications as the United States and Canada may agree to regarding the staging of any duty treatment set forth in Annexes 401.2 and 401.7 to the Agreement as the President determines to be necessary or appropriate to maintain the general level of reciprocal and mutually advantageous concessions with respect to Canada provided for by the Agreement.

3. Consistent with Article 401(5) of the Agreement, the President, through his duly empowered representative, on August 16, 1991, entered into an agreement with the Government of Canada providing an accelerated schedule of duty elimination for specific goods of Annex 401.2 to the Agreement. The consultation and lay-over requirements of section 103(a) of the Implementation Act with respect to such schedule have been complied with.

4. Also consistent with Article 401(5) of the Agreement, the President, through his duly empowered representative, on May 18, 1990, entered into an agreement with the Government of Canada providing an accelerated schedule of duty elimination for specific goods of Annexes 401.2 and 401.7. Pursuant to the authority granted in section 201(b) of the Implementation Act, the President, in Proclamation No. 6142 of May 25, 1990, implemented an accelerated schedule of duty elimination under the Agreement for those goods originating in the territory of Canada. However, certain goods could not be included in that agreement and accelerated schedule because of incomplete information regarding their tariff classification. Agreement as to acceleration of duty elimination for these goods was reached in an exchange of letters between the Governments of the United States and Canada. The consultation and lay-over requirements of section 103(a) of the Implementation Act with respect to such goods have been complied with.

5. Pursuant to section 201(b) of the Implementation Act, I have determined that the modifications hereinafter proclaimed to existing duties on goods originating in the territory of Canada are necessary or appropriate to maintain the general level of reciprocal and mutually advantageous concessions with respect to Canada provided for by the Agreement and to carry out the agreements with Canada providing an accelerated schedule of duty elimination for specific goods of Annex 401.2 to the Agreement.

6. Section 202(d)(1) of the Implementation Act authorizes the President to proclaim, as a part of the Harmonized System, implemented by the United States in the Harmonized Tariff Schedule of the United States (HTS), the rules of origin set forth in Annex 301.2 to the Agreement. Section 202(d)(2) of the Implementation Act authorizes the President to proclaim, subject to the consultation and lay-over requirements of section 103 of the Implementation Act, such modifications to the rules as may from time to time be agreed to by the United States and Canada. I have decided, pursuant to an agreement entered into on August 16, 1991, between the United States and Canada, that certain modifications in the rules of origin for particular goods of chapter 15 of the HTS should be proclaimed as a part of the HTS. The consultation and lay-over requirements of section 103 of the Implementation Act with respect to such modifications have been complied with.

7. Section 201(a) of the Implementation Act authorizes the President to proclaim such modifications to or continuance of existing duties, such continuance of existing duty-free or excise treatment, or such additional duties as the President determines to be necessary or appropriate to carry out Article 401 of the Agreement and the schedule of duty reductions with respect to goods originating in the territory of Canada set forth in Annexes 401.2 and 401.7 to the Agreement.

8. Certain provisions of the Customs and Trade Act of 1990 (the 1990 Act) (Public Law 101 - 382) and the Omnibus Budget Reconciliation Act of 1990 (the Budget Act) (Public Law 101 - 508), changed the tariff treatment of brooms and brushes of broom corn, woven fabrics and gauze of wool or of fine animal hair, ethyl alcohol, and ethyl tertiary-butyl ether. As a result of these changes, such goods originating in the territory of Canada became subject to rates of duty that are higher than the applicable duty rates previously proclaimed by the President pursuant to section 201 of the Implementation Act. In addition, previously enacted temporary duty suspensions for certain articles expired at the close of December 31, 1990. Consequently, such goods, if originating in the territory of Canada, became dutiable as of January 1, 1991, contrary to the terms of Article 401(8) of, and Annex 401.2 to, the Agreement. Accordingly, pursuant to section 201(a) of the Implementation Act, I have determined that it is necessary or appropriate to modify the HTS to ensure that the affected goods originating in the territory of Canada are afforded the tariff treatment contained in Annex 401.2 to the Agreement.

9. Title III of the 1990 Act amended the HTS to modify the tariff treatment afforded to various goods imported into the customs territory of the United States. Title II of the 1990 Act amended the Caribbean Basin Economic Recovery Act (CBERA) (19 U.S.C. 2701 et seq.) to repeal the termination on duty-free treatment under CBERA and to provide duty-free treatment for certain articles grown, produced, or manufactured in Puerto Rico. Technical corrections and conforming amendments to the HTS were set forth in sections 10011 and 11502(g) of the Budget Act.

10. In order to implement the tariff treatment provided for in CBERA, the 1990 Act, and the Budget Act, it is necessary to embody in the HTS the substance of the provisions of these acts. In addition, in order to clarify the preferential tariff treatment accorded under the CBERA, it is necessary to modify provisions of the general notes to the HTS to conform them to CBERA as amended by the 1990 Act.

11. Section 242 of the Compact of Free Association (the Compact) entered into by the Government of the United States and the Governments of the Marshall Islands and of the Federated States of Micronesia (the freely associated states), as given effect by section 401 of the Compact of Free Association Act of 1985 (the Association Act) (Public Law 99 - 239), requires the President to proclaim that articles imported from the freely associated states shall, under specified conditions, receive duty-free treatment subject to the limitations imposed under sections 503(b) and 504(c) of the Trade Act of 1974 (the 1974 Act) (19 U.S.C. 2463(b), 2464(c)).

12. Section 243 of the Compact, as given effect by section 401(b) of the Association Act, provides that certain articles imported from the freely associated states are to be excluded from the duty-free treatment proclaimed by the President and are to receive most-favored-nation (MFN) tariff treatment. Section 401(a) of the Association Act provides that only canned tuna provided for in item 112.30 of the Tariff Schedules of the United States (TSUS) that is imported from the freely associated states during any calendar year in an aggregate quantity not to exceed 10 percent of the U.S. consumption of canned tuna during the immediately preceding calendar year, as reported by the National Marine Fisheries Service, may be entered free of duty. In addition, section 401(a) of the Association Act further provides that canned tuna imports from the freely associated states entering free of duty shall be counted against the aggregate quantity of canned tuna that is dutiable under rate column numbered 1 for TSUS item 112.30 for that calendar year. The effect of this provision is that the tariff-rate quota of TSUS item 112.30 would have been available to imported canned tuna during any calendar year only to the extent that the quantity of canned tuna from the freely associated states that entered free of duty during the calendar year pursuant to section 410(a) of the Association Act was less than the aggregate quantity of canned tuna, if any, dutiable under TSUS item 112.30 for that calendar year.

13. The foregoing exclusions and restrictions are set forth in terms of the TSUS. The United States converted from the TSUS to the HTS effective January 1, 1989. Proclamation No. 6030 of September 28, 1989, incorporated into the HTS the exclusions and restrictions set out in section 401 of the Association Act, but did not clarify the manner in which canned tuna from the freely associated states shall be accorded limited duty-free treatment as set forth in section 401 of the Association Act. Therefore, modifications to general note 3(c)(viii) to the HTS and to chapter 16 of the HTS are appropriate in order to clarify the manner in which the provisions of section 401 of the Association Act relating to canned tuna shall be administered.

14. Pursuant to section 4 of the United States-Israel Free Trade Area Implementation Act of 1985 (the Israel Act) (19 U.S.C. 2112 note), the President proclaimed, in Proclamation No. 5365 of August 30, 1985, changes in tariff treatment which the President determined were required or appropriate to carry out the schedule of duty reductions for products of Israel set forth in Annex 1 to the Agreement on the Establishment of a Free Trade Area between the Government of the United States of America and the Government of Israel (the Israel FTA), entered into on April 22, 1985. Subsequently, in Proclamation No. 5646 of May 4, 1987, the President modified the tariff schedules to eliminate duty-free treatment for articles eligible for entry under certain provisions covering articles exported from the United States and returned after having been advanced or improved abroad. I have determined, pursuant to section 4 of the Israel Act, that further modifications are required or appropriate to carry out the schedule of duty reductions with respect to products of Israel set forth in Annex 1 to the Israel FTA.

15. On October 3, 1990, pursuant to actions taken by their parliaments, the Federal Republic of Germany and the German Democratic Republic became a single country, following the signing of a treaty with the Governments of the United States, the Union of Soviet Socialist Republics, the United Kingdom of Great Britain and Northern Ireland, and France. Accordingly, in order to ensure that MFN tariff treatment is afforded to all goods the product of the Federal Republic of Germany, I have determined that it is appropriate to modify general note 3(b) to the HTS, enumerating those countries whose products are dutied at the rates set forth in the Rates of Duty Column 2 of the HTS.

16. Section 604 of the 1974 Act, as amended (19 U.S.C. 2483), requires the President, from time to time, as appropriate, to embody in the HTS the substance of the provisions of that Act, of other acts affecting import treatment, and actions thereunder, including removal, modification, continuance, or imposition of any import restriction.

Now, Therefore, I, George Bush, President of the United States of America, acting under the authority vested in me by the Constitution and laws of the United States, including but not limited to section 604 of the 1974 Act, section 213 of CBERA, section 4 of the Israel Act, section 401 of the Association Act, sections 201 and 202 of the Implementation Act, and titles II and III of the 1990 Act, do proclaim that:

(1) In order to provide for an accelerated schedule of duty elimination for specific goods of Annex 401.2 to the United States-Canada Free-Trade Agreement and to modify the rules of origin, the tariff treatment provided for in the HTS for certain goods originating in the territory of Canada and general note 3 to the HTS are modified as provided in Annex I(a), (b), (c), (d), (e), and (f) to this proclamation.

(2) In order to modify certain rates of duty and to provide for staged reductions for specified goods originating in the territory of Canada to conform such duty rates to the schedule of duty reductions set forth in Annex 401.2 to the Agreement, the HTS is further modified as set forth in Annex I(g), (h), (i), and (j) to this proclamation.

(3) In order to make technical and conforming changes in various provisions of the HTS, and to implement the tariff treatment provided for in CBERA and the 1990 Act, including the tariff treatment of certain articles grown, produced, or manufactured in Puerto Rico, the HTS is modified as set forth in Annex II to this proclamation.

(4) In order to make conforming changes in the tariff treatment of products of the freely associated states following changes in section 503(b) of the 1974 Act and to clarify the tariff treatment of articles imported from the freely associated states, general note 3(c)(viii) to the HTS and chapter 16 of the HTS are modified as set forth in Annex III.

(5) In order to carry out the schedule of duty reductions for products of Israel, as provided in Annex I to the Israel FTA, HTS subheadings 9802.00.60 and 9802.00.80 are each modified by inserting in the Rates of Duty 1-Special subcolumn after the symbol ``CA'' in parentheses the symbol ``, IL''.

(6) In order to afford MFN tariff treatment to all goods the product of the Federal Republic of Germany, general note 3(b) to the HTS is modified by striking out ``German Democratic Republic''.

(7) Any provisions of previous proclamations and Executive orders inconsistent with the provisions of this proclamation are hereby superseded to the extent of such inconsistency.

(8) (a) The modifications made by paragraphs (1) and (2) of this proclamation shall be effective with respect to goods originating in the territory of Canada entered, or withdrawn from warehouse for consumption, on or after the dates set forth in Annex I to this proclamation.

(b) The modifications made by paragraph (3) of this proclamation shall be effective with respect to articles entered, or withdrawn from warehouse for consumption, on or after the dates set forth in Annex II to this proclamation.

(c) The modifications made by paragraph (4) of this proclamation shall be effective with respect to products of the freely associated states entered, or withdrawn from warehouse for consumption, on or after the dates set forth in Annex III to this proclamation.

(d) The modifications made by paragraph (5) of this proclamation shall be effective with respect to products of Israel entered, or withdrawn from warehouse for consumption, on or after January 1, 1989.

(e) The modification made by paragraph (6) of this proclamation shall be effective with respect to articles entered, or withdrawn from warehouse for consumption, on or after October 3, 1990.

In Witness Whereof, I have hereunto set my hand this twenty-eighth day of September, in the year of our Lord nineteen hundred and ninety-one, and of the Independence of the United States of America the two hundred and sixteenth.

George Bush

[Filed with the Office of the Federal Register, 5:04 p.m., September 30, 1991]

Note: The Office of the Press Secretary released this proclamation and accompanying annexes on September 30, and it was published in the Federal Register on October 2.

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