Memorandum on Determination Under Section 305 of the Trade Agreements Act of 1979

Presidential Determination No. 92-22

Memorandum for the United States Trade Representative

Pursuant to section 305(g)(1)(A) of the Trade Agreements Act of 1979, as amended (19 U.S.C. 2515(g)(1)(A)), I hereby identify the European Community ("EC") as a country that maintains, in government procurement, a significant and persistent pattern or practice of discrimination against United States products or services which results in identifiable harm to United States businesses. Pursuant to section 305(g)(2) of the Trade Agreements Act of 1979, as amended, I hereby determine that immediate imposition of the sanctions specified in section 305(g)(1)(B) of the Act would harm the public interest of the United States, and accordingly modify such sanctions so that they will take effect by January 1993, subject to EC implementation of the discriminatory provisions of its Directive on the procurement procedures of entities operating in the water, energy, transport, and telecommunications sectors ("Utilities Directive"). In accordance with the statute, the sanctions will be equivalent, in their effect, to the discrimination against United States products or services, and will be subject to such terms and conditions as I consider appropriate.

Reasons for Determination

On February 21, 1992, in the Administration's report to the Congress concerning its "Early Review" of certain procurement practices of the European Community, France, Germany, and Italy under Title VII of the Omnibus Trade and Competitiveness Act of 1988 (section 305 of the Trade Agreements Act of 1979, as amended), the Administration identified the EC for the discriminatory procurement policies of government-owned telecommunications and electrical utilities in certain EC member states. Specifically cited was the EC's "Utilities Directive," which is scheduled to come into effect by January 1, 1993, and which, under current circumstances, would require EC utilities to favor EC goods and services over those of the United States and other foreign countries. The Directive would replace the informal barriers U.S. firms now face in some EC markets with official discrimination in all EC utilities markets.

In the "Early Review" report to the Congress, my intention to take the action described above was announced, if the 60-day period of consultations specified in the statute was not successful in resolving U.S. concerns. Although you requested and held consultations pursuant to the statute, U.S. concerns have not yet been addressed by the EC in a satisfactory manner. Therefore, pursuant to the requirements of the statute, I have determined to take the above-mentioned action.

This determination shall be published in the Federal Register.

GEORGE BUSH

THE WHITE HOUSE,

Washington, April 22, 1992.