1701.11, 1701.12, 1701.91, 1701.99, 1702.90, and 2106.90. This authority was proclaimed to implement the results of the Uruguay Round of multilateral trade negotiations as reflected in the provisions of schedule XX (United States), annexed to the Agreement Establishing the World Trade Organization. 15

Background

The United States has always been a net importer of sugar, at times importing more than half of the nation's sugar consumption. However, sugar imports have been restricted almost continuously since 1934 in order to maintain and foster the domestic sugarcane and sugar beet industries. From the enactment of the Jones Costigan Sugar Act of 1934 16 through the expiration of the Sugar Act of 1948 on December 31, 1974,17 sugar imports were restricted by a statutory quota. Historically, this system of import protection has maintained a U.S. price for sugar well above the world price. Shortly before the expiration of the Sugar Act of 1948, an absolute import quota was proclaimed by President Ford, although the quota quantity was so large as to be non-restrictive. 18 The quota derived from a note that had been negotiated in the Annecy (1949) and Torquay (1951) Rounds of multilateral trade negotiations and was proclaimed as a headnote to the Tariff Schedule of the United States (TSUS) following the conclusion of the Kennedy Round (1963-1967). On May 5, 1982, President Reagan modified this headnote quota to: (1) make it restrictive; (2) allocate the quota among supplying countries in accordance with their shares of the U.S. market during the period from 1975 through 1981; and (3) authorize the Secretary of Agriculture to establish and modify the quota amount in subsequent periods. 19

By 1988, the quota had been reduced to the lowest ratio of imports to domestic production in the nation's history. The government of Australia challenged the legality of the sugar import quota under the provisions of the General Agreement on Tariffs and Trade (GATT), and in 1989, a GATT dispute settlement panel found the quota illegal. In 1990, President Bush issued Proclamation No. 6179 20 to convert the absolute import quota into a tariffrate quota, thereby bringing it into conformity with the GATT TRQ panel decision. During the Uruguay Round of multilateral trade negotiations, the quota was reconverted into two TRQ's, one for imports of raw cane sugar and the other for imports of refined sugar, including syrups. The United States agreed to bind its minimum total sugar/syrups TRQ at 1,139,195 metric tons (MT). In addition, the United States agreed to reduce the second tier (over quota) tariff rates by 15 percent over 6 years.21

Under the tariff-rate quota system, the Secretary of Agriculture establishes the quota quantity that can be entered at the lower tier of tariff rates, and the USTR allocates this quantity among the 40

15 Pres. Proc. No. 6763, Dec. 23, 1994, 60 Fed. Reg. 1007.

16 Pub. L. No. 73-213, ch. 263, approved May 9, 1934, 48 Stat. 670.

17 Pub. L. No. 80-388, ch. 519, approved August 8, 1947, 61 Stat. 922. See also the Sugar Act of 1937, Pub. L. No. 75-414, ch. 898, approved September 1, 1937, 50 Stat. 903.

18 Pres. Proc. No. 4334, November 16, 1974, 39 Fed. Reg. 40739.

19 Pres. Proc. No. 4941, May 5, 1982, 47 Fed. Reg. 19661.

20 Pres. Proc. No. 6179, September 13, 1990, 55 Fed. Reg. 38293. 21 See Pres. Proc. No. 6763, December 23, 1994.

eligible sugar exporting countries. The quantities allocated to beneficiary countries under the GSP, the CBI and the ATPA receive duty-free treatment. Certificates of Quota Eligibility (CQE) are issued to the exporting countries and must be executed and returned with the shipment of sugar in order to receive quota treatment.22 Imports of raw cane sugar are permitted in addition to the quota quantity on condition that such sugar is to be refined and used in the production of certain polyhydric alcohols or to be re-exported in refined form or in sugar-containing products.23

The quantity of sugar which may be imported duty free from Mexico is governed by paragraphs 13-22 of section A of annex 703.2 of the North American Free Trade Agreement (NAFTA). Since 1982, Mexico has been included within a basket category known as the "other specified countries and areas" and has been allocated a minimum quota amount, currently set at 7,258 MT raw value. The NAFTA guarantees the greater of this access or Mexico's net surplus production, but no greater than 25,000 MT during the first 6 years or 250,000 MT during the remaining 8 years of the NAFTA implementation period. During each of the first 14 years of the NAFTA, Mexico and the United States will jointly determine whether either has been or is projected to be a net surplus producer.24 All sugar imports from Mexico will enter duty free after the 14-year transition period.

IMPORT PROHIBITIONS ON CERTAIN AGRICULTURAL COMMODITIES UNDER MARKETING ORDERS

SECTION 8e OF THE AGRICULTURAL ADJUSTMENT ACT, AS AMENDED Section 8e of the Agricultural Adjustment Act, as amended, 25 prohibits the importation of certain specified commodities which do not meet relevant grade, size, quality or maturity requirements imposed under the marketing order in effect for such commodity. The specified commodities include tomatoes, raisins, olives (other than Spanish-style green olives), prunes, avocados, mangoes, limes, grapefruit, green peppers, Irish potatoes, cucumbers, oranges, onions, walnuts, dates, filberts, table grapes, eggplants, kiwifruit, nectarines, plums, pistachios, and apples.

Any prohibition under this authority may not be made effective until after the Secretary of Agriculture gives reasonable notice (of not less than 3 days) and receives the concurrence of the U.S. Trade Representative. The Secretary of Agriculture may promulgate such rules and regulations as he deems necessary, to carry out the provision of this section.

Whenever the Secretary of Agriculture finds that the application of the restrictions under a marketing order to an imported commodity is not practicable because of variations in characteristics between the domestic and imported commmodity, he must establish with respect to the imported commodity such grade, size, quality, and maturity restrictions by varieties, types, or other classification

22 See 15 C.F.R. part 2011.

23 See additional U.S. note 6 to chapter 17 of the HTS and 7 C.F.R. part 1530.

24 For purposes of the NAFTA formulas, high fructose corn syrup (HFCS) is included in determining the consumption of sugar.

257 U.S.C. 608e-1.

as he finds will be equivalent or comparable to those imposed upon the domestic commodity under such order.

Section 4603 of the Omnibus Trade and Competitiveness Act of 1988 amended section 8e to provide additional authority for the Secretary to establish an additional period of time (not to exceed 35 days) for restrictions to apply to imported commodities, if the Secretary determines that such additional period of time is necessary to effectuate the purposes of the Act and to prevent the circumvention of the requirement of a seasonal marketing order. In making this determination, the Secretary must consider: (1) the extent to which imports during the previous year were marketed during the period of the marketing order and such imports did not meet the requirements of the marketing order; (2) if the importation into the United States of such commodity did, or was likely to, circumvent the grade, size, quality or maturity standards of a seasonal marketing order; and (3) the availability and price of commodities of the variety covered by the marketing order during any additional period the marketing order requirements are to be in effect.

Section 1308 of the Food, Agriculture, Conservation, and Trade Act of 1990 (the "1990 farm bill") amended section 8e to require the Secretary to consult with the USTR prior to any import prohibition or regulation being made effective. The USTR must advise the Secretary within 60 days of being notified, to ensure that the proposed grade size, quality, or maturity provisions are not inconsistent with U.S. international obligations. If the Secretary receives the concurrence of the USTR, the proposed prohibition or regulation may proceed. Legislation enacted at the end of the 102d Congress (H.R. 6128) included an amendment to section 8(c) of the Agricultural Adjustment Act of 1937 to require the Secretary to complete all informal rulemaking actions within 45 days of receiving recommendations on such marketing orders from administrative committees.

Authorities to Restrict Imports Under Certain
Environmental Laws

26

MARINE MAMMAL PROTECTION ACT OF 1972, AS AMENDED The Marine Mammal Protection Act (MMPA), enacted in 1972, 2 places a ban on the importation of marine mammals and marine mammal products, except in limited circumstances, such as for scientific research. The MMPA also directs the Secretary of the Treasury to ban the importation of commercial fish or products from fish. which have been caught with commercial fishing technology which results in the incidental kill or incidental serious injury of ocean mammals in excess of U.S. standards. In carrying out the ban, the Secretary, in the case of yellowfin tuna harvested with purse seine nets in the eastern tropical Pacific Ocean, and products therefrom, to be exported to the United States, must require that the government of the exporting nation provide certain documentary evidence relating to that country's marine mammal conservation programs. The Secretary must also require the government of any

26 Public Law 92-522, approved October 21, 1972, 16 U.S.C. 1361 et seq.

intermediary nation from which yellowfin tuna or tuna products will be exported to the United States to certify and provide reasonable proof that it has acted to prohibit the importation of such tuna and tuna products from any nation from which direct export to the United States of such tuna and tuna products is banned under the Act.

In 1984, the MMPA was amended to require that each nation wishing to export tuna to the United States document that it has adopted a dolphin conservation program "comparable" to that of the United States, and that the average rate of mortality of its purse seine fleet is comparable to that of the U.S. fleet. If these requirements are not met, an embargo on the import of yellowfin tuna and tuna products from that nation will be invoked. In 1988, the MMPA was further amended with respect to these "comparability" provisions by requiring that the regulatory programs of other nations in the eastern tropical Pacific tuna fishery be at least as restrictive as those of the United States. The 1988 amendments also require that the government of any intermediary nation from which yellowfin tuna or tuna products will be exported to the United States certify and provide reasonable proof that it has acted to prohbibit the importation of tuna and tuna products from embargoed nations.

In August 1990, Mexico's yellowfin tuna was embargoed under the comparability provision. Mexico challenged the U.S. embargo under procedures of the General Agreement on Tariffs and Trade (GATT) and in September 1991, a GATT panel found in favor of Mexico. Venezuelan exports of yellowfin tuna to the United States also were embargoed and Venezuela began a GATT case against the United States in May 1992. A third GATT challenge was brought by the European Community (EC) in June 1992, after a federal district court ruled that the MMPA also required a secondary embargo of tuna products from some 20 intermediary nations, including those of the EC, that had failed to certify and offer reasonable proof that they had acted to prohibit the importation of tuna from the primary embargoed nations. On May 20, 1994, a GATT dispute settlement panel issued a report finding that U.S. tuna embargoes were inconsistent with GATT rules.

INTERNATIONAL DOLPHIN CONSERVATION ACT OF 1992

The International Dolphin Conservation Act of 1992 27 establishes an international moratorium on the practice of harvesting tuna through the use of purse seine nets deployed on or to encircle dolphins or other marine mammals, and sets forth certain import sanctions for countries agreeing to abide by this moratorium and then subsequently failing to do so. The Act's provisions are incorporated into the Marine Mammal Protection Act (MMPA) as a new title III.

The Act reflects a legislative proposal by the Bush Administration, introduced as H.R. 5419 on June 17, 1992, to strengthen international cooperation in the protection of dolphins and other marine mammals and to resolve the GATT trade disputes by making it possible for the United States to lift the bans in place on im

27 Public Law 102-523, approved October 26, 1992.

ports of tuna and tuna products from Mexico, Venezuela, and some 20 other countries.

Section 302 of the new title III authorizes the Secretary of State to enter into international agreements which establish a global moratorium of at least 5 years' duration on the practice of intentionally encircling dolphins with purse seine nets during tuna fishing operations. Such moratorium is to take effect on March 1, 1994. A procedure is established by which the United States could withdraw from a 5-year moratorium prior to December 31, 1999.

Section 305 establishes that the existing embargo provisions of section 101 of the MMPA will not apply to nations that enter into commitments with the United States to: (1) implement a moratorium on encircling dolphins with purse seine nets effective March 1, 1994; (2) require observers on all their purse seine vessels larger than 400 short tons; and (3) reduce their dolphin mortalities up until the effective date of the moratorium. The Secretaries of State and Commerce must periodically determine whether countries that have committed to the moratorium are implementing their commitments. The section also establishes a series of import bans on nations that fail to comply with their commitments. Fifteen days after a country has been certified as having failed to implement its commitments, its yellowfin tuna and yellowfin tuna products will be banned from entry into the United States. Sixty days after a country has been certified as having failed to implement its commitments, the President shall direct the Secretary of the Treasury to ban the importation from that country of those categories of fish and fish products which had an aggregate customs valuation of 40 percent of the aggregate customs valuation of all articles classified under all fish and fish product categories that were imported from that country during the previous calendar year.

ENDANGERED SPECIES ACT OF 1973, AS AMENDED

The Endangered Species Act 28 authorizes the Secretary of the Interior to create lists of species or subspecies which are considered endangered or threatened, and to prohibit the importation or interstate sale of these species or subspecies.

SECTION 8 OF THE FISHERMEN'S PROTECTIVE ACT OF 1967, AS AMENDED ("PELLY AMENDMENT")

Under section 8 of the Fishermen's Protective Act of 1967, as amended (the so-called "Pelly Amendment"), 29 the President, based on certain findings by the Secretary of Commerce or the Secretary of the Interior, has the discretionary authority to impose import sanctions on any products from any country which conducts fishery practices or engages in trade which diminishes the effectiveness of international programs for fishery conservation or international programs for endangered or threatened species.

28 Public Law 93–205, approved December 28, 1973, 16 U.S.C. 1531 et seq. 29 Public Law 93-205, approved December 28, 1973, 22 U.S.C. 1978.