UNITED STATES INTERNATIONAL TRADE COMMISSION

Washington, DC

PROBABLE EFFECT OF CERTAIN

MODIFICATIONS TO THE NORTH AMERICAN FREE

TRADE AGREEMENT RULES OF ORIGIN (PHASE 2)

AGENCY: United States International Trade Commission

ACTION: Request for written submissions

EFFECTIVE DATE: September 28, 2001

SUMMARY: The Commission received a request from the United States Trade Representative (USTR) on September 28, 2001, to provide advice on the probable effect on U.S. trade under the North American Free Trade Agreement (NAFTA), total U.S. trade, and on domestic producers of certain modifications to the rules of origin in NAFTA Annexes 401 and 403. The USTR request states that most of these modifications are technical changes that will conform the NAFTA rules of origin to corresponding changes in the HTS due to revisions in Harmonized System nomenclature that are scheduled to take effect on January 1, 2002.

FOR FURTHER INFORMATION: Information may be obtained from David Lundy, Office of Industries (202-205-3439, or lundy@usitc.gov); and on legal aspects, from William Gearhart, Office of the General Counsel (202-205-3091). The media should contact Margaret O'Laughlin, Office of Public Affairs (202-205-1819). Hearing impaired individuals are advised that information on this matter can be obtained by contacting the TDD terminal (202-205-1810). General information concerning the Commission may also be obtained by accessing its internet server http://www.usitc.gov. The public record for this investigation may be viewed on the Commission's electronic docket (EDIS-ON-LINE) at http://dockets.usitc.gov/eol/public. Advice on a previous set of modifications (Phase 1) was provided to the USTR on September 14, 2001 and a public version of this report is available on the Commission's Internet server.

BACKGROUND: According to the USTR's letter, U.S. negotiators have recently reached agreement in principle with representatives of the governments of Canada and Mexico on proposed modifications to Annex 401 of the NAFTA. Chapter 4 and Annexes 401 and 403 of the NAFTA contain the rules of origin for application of the tariff provisions of the NAFTA to trade in goods. Section 202(q) of the North American Free Trade Agreement Implementation Act (the Act) authorizes the President, subject to the consultation and layover requirements of section 103 of the Act, to proclaim such modifications to the rules as may from time to time be agreed to by the NAFTA countries. One of the requirements set out in section 103 of the Act is that the President obtain advice from the United States International Trade Commission.

The USTR requested that the Commission provide advice on the probable effect on U.S. trade under NAFTA, total U.S. trade, and on domestic producers of the affected articles as a result of 311 proposed modifications to the rules of origin in NAFTA Annexes 401 and 403. A list of the proposed modifications is available from the Office of the Secretary to the Commission or by accessing the electronic version of this notice at the Commission's Internet site (http://www.usitc.gov. The current U.S. rules of origin can be found in general note 12 of the 2001 U.S. Harmonized Tariff Schedule (see "General Notes" link, http://dataweb.usitc.gov/scripts/tariff/toc.html) .

The USTR request states that most of the modifications are technical changes that will conform the NAFTA rules of origin to corresponding changes in the HTS due to revisions in Harmonized System nomenclature that are scheduled to take effect on January 1, 2002.

As requested, the Commission will forward its advice to the USTR by October 24, 2001, and will release a public version of its advice as soon as possible thereafter.

WRITTEN SUBMISSIONS: No public hearing is being scheduled in connection with preparing this advice. However, interested parties are invited to submit written statements (original and 14 copies) concerning any economic effects of the modifications. Commercial or financial information that a submitter desires the Commission to treat as confidential must be submitted on separate sheets of paper, each clearly marked "Confidential Business Information" at the top. All submissions requesting confidential treatment must conform with the requirements of section 201.6 of the Commission's Rules of Practice and Procedure (19 C.F.R. 201.6). All written submissions, except for confidential business information, will be made available in the Office of the Secretary to the Commission for inspection by interested parties. To be ensured of consideration by the Commission, written statements relating to the Commission's report should be submitted to the Commission at the earliest practical date and must be received no later than the close of business on October 18, 2001. All submissions should be addressed to the Secretary, United States International Trade Commission, 500 E Street SW, Washington, DC 20436.

Persons with mobility impairments who will need special assistance in gaining access to the Commission should contact the Office of the Secretary at 202-205-2000.

By order of the Commission.

Donna R. Koehnke

Secretary

Issued: October 1, 2001

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