(Japanese Note)

　Washington, May 14, 1985

　Sir,
  I have the honor to refer to the recent discussions held between the representatives of the Government of Japan and the Government of the United States of America concerning trade in certain steel products between Japan and the United States of America and to confirm, on behalf of the Government of Japan, the understanding reached between the two Governments that, with a view to restructuring the United States steel industry, the Government of Japan will implement the measures provided for in the arrangement attached hereto (hereinafter called "the Arrangement").

　I have further the honor to request you to confirm on behalf of the Government of the United States of America that it will implement its measures provided for in the Arrangement and to confirm that the present Note and your reply shall be regarded as constituting an agreement between the two Governments.

　I avail myself of this opportunity to renew to you, Sir, the assurances of my highest consideration.

　(Signed) Nobuo Matsunaga

　Ambassador Extraordinary
and Plenipotentiary of Japan

　The Honorable Robert E. Ligthizer
Deputy United States
Trade Representative

　Recognizing the United States policy for the steel industry of September 18, 1984, and related authority, and the policy of the Government of Japan to cooperate with such policy;

　Recognizing the spirit of cooperation in which the Government of Japan and the Government of the United States of America have consulted in the past to resolve problems in steel trade, arid noting that the Government of Japan has agreed to restrain voluntarily certain steel exports to the United States of America;

　Recognizing the policy of both governments that adjustment and modernization of their steel industries should maximize reliance on market forces;

　Recognizing the continued importance of efforts made by the Government of the United States of America to facilitate the United States steel industry's adjustment and modernization;

　Recognizing the policy of the Japanese steel industry to maintain fair trade practices, and noting the positive contributions of industrial cooperation;

　And recognizing, therefore, the importance of stability in trade for a certain Period of time in certain steel products between Japan and the United States of America;

　The Government of Japan and the Government of the United States of America have agreed as follows:

1.  Basis of the Arrangement

　The objective of the Arrangement is to create a period of trade stability in order to facilitate the modernization of the United States steel industry. To this effect, the Government of Japan shall restrain exports to or destined for consumption in the United States of America of products described in sub-paragraph (a) of paragraph 3 originating in Japan (such products hereinafter called "the Arrangement products") for the period October 1, 1984, through September 30, 1989.

2. Conditions

(a) The entry into effect of the Arrangement is conditional upon the initiation of the legal process to terminate all existing antidumping duty orders on covered products listed in Appendix A. Should this process riot result in the termination of these orders within a reasonable period, the Government of Japan will take appropriate actions with respect to those products subject to the remaining order after consultation with the Government of the United States of America.

(b)

(1) If, during the period in which the Arrangement is in effect, any petition seeking import relief under United States law, including Section 337 of the Tariff Act of 1930, Section 201 of the Trade Act of 1974, Section 301 of the Trade Act of 1974 (other than Section 301 petitions relating to third country sales by United States exporters), or Section 232 of the Trade Expansion Act of 1962, is filed or investigations initiated or litigation (including antitrust litigation) instituted with respect to the Arrangement products, the Government of Japan shall be entitled to terminate the Arrangement with respect to some or all of the Arrangement products that are the subject of the petition, investigation or litigation after consultations with the Government of the United States of America, at the earliest 15 days after such consultations.

　In the case of antidumping or countervailing duty investigations, the Government of Japan shall be entitled to terminate the Arrangement with respect to some or all of the Arrangement products that are the subject of the investigation after consultations with the Government of the United States of America, at the earliest 5 days after the issuance of a preliminary Department of Commerce determination or the conclusion of such consultations, whichever is later.

(2) In addition, if, during the consultations, it is determined that the petition, investigation or litigation affects the significant trade interests of Japan, the Government of Japan shall be entitled to terminate the Arrangement with respect to some or all of the Arrangement products, at the earliest 5 days after such consultations.

(3) These consultations will take into account the nature of the petition or litigation, the identity of the petitioner or litigant, the amount of trade involved, the scope of relief sought, and other relevant factors.

3. Product Description

(a) The Arrangement products are:

　Sheet and Strip

　-- Cold-rolled Sheet and Strip (including Black Plate and Heat Resisting)

　-- Coated sheet

　Plate

　Structurals

　Bar

　-- Cold-finished Bar

　Pipe and Tube

　-- Oil Country Tubular Goods (OCTG)

　-- Line Pipe

　-- Structural Pipe and Tube

　Wire Rod, Wire and Wire Products

　-- Wire Rod

　Fabricated Structurals

　Semi-finished Products

　Wire Rope and Strand

　as described and classified in Appendix B by reference to corresponding Tariff Schedules of the United States Annotated (TSUSA) item numbers and Japanese export classification numbers. All products classified in each covered TSUSA item number by the United States Customs Service are subject to the Arrangement.

(b) The numbers referred to in sub-paragraph (a) above are subject to revision when the Government of Japan or the Government of the United States of America adopts modifications to the applicable import or export nomenclatures. When such modifications are adopted, prior notification shall be given.

4. Export Ceilings

(a) For the period October 1, 1984 through December 31, 1985 (hereinafter called "the Initial Period") and thereafter for each of the calendar years 1986 through 1988 and for the period January 1, 1989 through September 30, 1989 (hereinafter called "the End Period"), export licenses and certificates shall be required for the Arrangement products. However, products exported from Japan on or after October 1,1984 and prior to June 1, 1985, may be admitted without an export license and certificate. Such licenses and certificates shall be issued to Japanese exporters for each of the following product categories and sub-categories (hereinafter called "categories" and "sub-categories" respectively) in quantities no greater than the following percentages of the projected United States apparent consumption (or tonnages, where so indicated) for each category and sub-category (hereinafter called "export ceilings") for the relevant period:

　Category and
Sub-category Export Ceiling

　Sheet and Strip 5.57%

　-- Cold-rolled Sheet and
Strip (including Black Plate and Heat Resisting) 4.66%

　-- Coated sheet 12.25%

　Plate 0.60%

　Structurals 8.52%

　Bar 1.50%

　-- Cold-finished Bar 4.54%

　Pipe and Tube 13.26%

　-- Oil Country Tubular Goods (OCTG) 17.56%

　-- Line Pipe 15.52%

　-- Structural Peipe and Tube 24.18%

　Wire Rod, Wire and Wire Products 6.71%

　-- Wire Rod 5.93%

　Fabricated Structurals 100.000 net tons

　Semi-finished Products 100.000 net tons

　Wire Rope and Strand subject to special monitoring

　The tonnage of the Arrangement products that were exported on or after October 1,1984 and prior to June 1, 1985 without a certificate from Japan to or destined for consumption in the United States of America shall be counted towards the Initial Period export ceiling for each category and sub-category. The tonnage so exported shall be determined on the basis of United States import invoice data sorted by export date. Date of export for pre-certificated shipments under the Arrangement will be that established by the United States Customs Service. Date of export for all other shipments exported under the provisions of the Arrangement will be that established by Japanese Customs at the time of exportation. No later than November 30, 1985, the Government of the United States of America will notify the Government of Japan of the amount of tonnage exported on or after October 1, 1984 but without a certificate. Prior to the determination of the amount of tonnage which was exported without a certificate, the Government of Japan or organizations designated by the Government of Japan may issue licenses or certificates for no more than 40 percent of its export ceiling for the Initial Period for each category or sub-category. If pre-certificated shipments of a category or sub-category exceed 60 percent of the export ceiling for the category or sub-category for the Initial Period, the overage will first be counted against export licenses and certificates that have not yet been issued for that period. To the extent that export licenses and certificates have already been distributed in such a way as to cause Japanese exports to exceed the agreed export ceilings for the Initial Period, the overage that has not yet been accounted for will be sub-tracted from the export ceilings for the category or sub-category in the subsequent annual period.

　For the purposes of the Arrangement, "United States apparent consumption" shall mean shipments (deliveries) minus exports plus imports, as described in Appendix D.

(b)  For the Initial Period and thereafter for each of the calendar years 1986 through 1988 and for the End Period, export licenses and certificates shall be required for semi-finished products and fabricated structurals. However, such products exported from Japan on or after October 1, 1984 and prior to June 1, 1985 may be admitted without an export license and certificate. Export licenses and certificates shall be issued to Japanese exporters of semi-finished products and fabricated structurals in quantities not greater than:

　Initial End
Period 1986 1987 1988 Period

　Semi- finished Products 125,000 100,000 100,000 100,000 75,000

　Fabricated Structurals 125,000 100,000 100,000 100,000 75,000

　The tonnage of semi-finished products and fabricated structurals that were exported on or after October 1. 1984 and prior to June 1, 1985 without a certificate from Japan  to the United States of America shall be deducted from the Initial Period allowable tonnage for each of these steel products. The tonnage so exported shall be determined on the basis of United States import invoice data sorted by export date. No later than November 30, 1985, the Government of the United States of America will notify the Government of Japan of the amount of tonnage exported on or after October 1, 1984 without a certificate. Prior to the determination of how much tonnage was exported without a certificate, the Government of Japan or organizations designated by the Government of Japan may issue licenses or certificates for no more than 40 percent of the allowable Initial Period tonnages for these steel product s. If pre-certificated shipments of each of these steel products exceed 60 percent of the allowable tonnage in the Initial Period, the overage will first be subtracted from export licenses and certificate s that have not yet been issued. To the extent that export licenses and certificates have already been distributed in such a way as to cause Japanese exports to exceed the agreed export ceilings for the Initial Period, the overage that has not yet been accounted for will be subtracted from the allowable tonnage in the subsequent annual period.

(c) Where the arrangement products imported into the United States of America are subsequently re-exported therefrom, without having been subject to substantial transformation, the export ceilings for such products for the period corresponding to the time of such re-export shall be increased by the same amount.

(d) For the purposes of the Arrangement, the United States of America shall comprise both the United States Customs Territory and United States Foreign Trade Zones, and entry of merchandise into the United States of America shall include admission of merchandise into a Foreign Trade Zone. In consequence the importation into the United States Customs Territory of the Arrangement products which have already entered into a Foreign Trade Zone shall not then again be taken into account as imports of the Arrangement products.

5. Calculation and Revision of United States Apparent Consumption Forecast and of Exp9ort Ceilings

(a) The Government of the United States of America, with advice from the Government of Japan, will select an independent forecaster which will provide the estimate of United States apparent consumption for the purposes of the Arrangement. A first projection of United States apparent consumption for the Initial Period by category and sub-category for each category and sub-category will be established as early as possible and in any event before June 1, 1985.

(b) The figures for projected 1985 apparent consumption will be revised in August and October of 1985 by the independent forecaster, and appropriate adjustments will be made to the export ceilings for each category and sub-category taking into account license s already issued. Export ceilings calculated for the Initial Period based on the hay, August and October forecasts will use actual October 1, 1984 through December 31, 1984 United States apparent consumption.

　For subsequent annual period, a first projection of United States apparent consumption by category and sub-category will be established by October of the preceding year. These figures will be revised in December of the previous year and February, May, August and October of each year.

　For the End Period, a first projection of United States apparent consumption by category and sub-category will be established by October of 1988 These figures will be revised in December 1988 arid February May and August of 1989.

　By May 1 of each year as from 1986, adjustments to that year's export ceiling for each cateogory and sub-category will be made for differences between the forecasted United States apparent consumption and actual United States apparent consumption of that category or sub-category in the previous period.

6.  Export Licenses and Certificates

(a)  The Government of Japan will require an export license and certificate for all the Arrangement products, publishing appropriate decisions and regulations. Such export licenses and certificates will be issued so that no more than 60 percent of allowable Japanese exports of any category or sub-category will be shipped to the United States of America in any two consecutive quarters without the prior agreement of the Government of the United States of America. The Government of Japan shall take such action, including the imposition of penalties, as may be necessary to make effective the obligations resulting from the Arrangement. The Government of Japan will inform the Government of the United States of America of any violations concerning the export licenses and certificates which come to its attention and the action taken with respect thereto.

　The Government of the United States of America will inform the Government of Japan of any violations concerning the export licenses and certificates which come to its attention and the action taken with respect thereto.

　Export licenses will provide that shipment must be made within a period of three months or less.

　Export licenses will be issued against the export ceiling for the Initial Period, a specific calendar year or the End Period as the case may be. Export licenses may be used as early as November 15 of the previous period within a limit of eight (8) percent of the export ceiling for the given period. Each such advance use license and certificate derived therefrom shall be so marked. Export licenses may not be used after December 31 of the period for which they are issued, except that licenses not so used may be used during the first two months of the following period up to eight (8) percent of the export ceiling in the previous year or eight (8) percent of eighty (80) percent of the export ceiling in the Initial Period, as the case may be. Each such carryover license and certificate derived therefrom shall be so marked.

　The Government of Japan and the Government of the United States of America may increase the above percentage limits by mutual agreement.

(b)The Government of Japan will require that the Arrangement products shall be issued a certificate substantially in the form set out in Appendix C, endorsed in relation to a license. The certificate must contain a stamp of the Government of Japan or of organizations designated by the Government of Japan indicating the day, month, and year in which the Arrangement products were exported, the category, and tonnage exported. If any of this information is in a language other than English, the certificate must also contain an English language translation of this information. The Government of the United States of America shall require presentation of such certificate as a condition for entry into the United States of America of the Arrangement products. The Government of the United States of America shall prohibit entry of such products not accompanied by such a certificate.

7.  Technical Adjustments

(a)  Export ceilings for specific categories may be adjusted by the Government of Japan with the agreement of the Government of the United States of America. Adjustments to increase the volume of one category must be offset by an equivalent volume reduction for another or other categories for the same period. Notwithstanding the preceding sentences, no adjustment may be made under this paragraph which results in an increase or a decrease in a specific category export ceiling by more than five (5) percent by volume for the relevant period. The Government of Japan and the Government of the United States of America may agree to increase the above percentage limit.

(b)  Export ceilings for specific sub-categories may be adjusted by the Government of Japan as herein provided.

　Adjustments to increase the volume of one sub-category must be offset by an equivalent volume reduction in other products within the same category. Notwithstanding the preceding sentences, no adjustment may be made under this paragraph which results in an adjustment in a specific sub-category export ceiling by more than seven (7) percent by volume for the relevant period. The Government of Japan and the Government of the United States of America may modify the above percentage by mutual agreement. Each license and certificate for such adjusted volumes shall be so marked.

8.  Short Supply

　If the Government of the United States of America in consultation with the Government of Japan determines that because of abnormal supply or demand factors, the United States steel industry will be unable to meet demand in the United States of America for a particular category or sub-category (including substantial objective evidence such as allocation, extended delivery periods, or other relevant factors), an additional tonnage shall be allowed for such category or sub-category by a special issue of licenses limited to 10 percent of Japan's unadjusted export ceiling for that category or sub-category. In extraordinary circumstances as determined by the Government of the United States of America in consultation with the Government of Japan, the Government of the United States of America will increase the allowable level of special licenses.

　Requests for short supply should at a minimum contain the information de scribed in Appendix E. The Government of the United States of America shall make a determination under this paragraph on the basis of objective evidence from all relevant sources within a maximum of sixty days from the date of the request for consultations.

　Each authorized special issue export license and certificate derived there from shall be so marked. Each such license must be used within 90 days after the date of the authorization of the special issuance unless the Government of the United States of America agrees to extend.

9.  Monitoring

　The Government of Japan will, within one month of the end of each quarter, or upon request, and for the first time by July 31, 1985, supply the Government of the United States of America with such non-confidential information on all export licenses and certificates issued for the Arrangement products as is required for the proper functioning of the Arrangement. This information will include as a minimum each license number, certificate number, quantity, date of export and category or sub -category written in English.

　The Government of the United States of America will collect and transmit quarterly, or upon request, to the Government of Japan all non-confidential information relating to certificates received during the preceding quarter in respect of the Arrangement products. The Government of the United States of America will also collect and transmit non-confidential information relating to actions taken in respect of the Arrangement products for violations of United States Customs laws.

10.  Consultations 

(a)  Quarterly consultations shall take place between the Government of Japan and the Government of the United States of America on any matter arising out of the operation of the Arrangement.

(b)  Consultations shall be held at any other time at the request of either the Government of Japan or the Government of the United States of America.

(c)  Consultations shall also be held if there are indications that imports from third countries of steel product s are displacing imports from Japan.

11.  Shifts in Product Mix

(a)  If imports from Japan of a product within category or a sub-category show a significant increase indicating a major shifting of a product mix within the same category or sub-category, consultations will be held upon request in order to work out a mutually satisfactory solution.

(b)  Such solution may include the creation of a new sub-category for the product.

12.  Special Consultation

　A special consultation will be held in December 1985 and September 1987, and at any other time as agreed between the Government of Japan and the Government of the United States of America, in order to discuss the matter of continuation or modification of the Arrangement in the global context of the United States steel program, as well as the relative share of Japan in the burden of the overall limitation of imports and change in business circumstances of the United States steel industry.

13.  Treatment

　If the Government of Japan considers that, as a result of the application of the provisions of the Arrangement, Japan is placed in an inequitable position vis-a-vis third countries with respect to imports of steel products into the United States of America, the Government of Japan may request consultations with the Government of the United States of America.

14.  Relations with the GATT

　The two governments recognize that their rights and obligations under the General Agreement on Tariffs and Trade (GATT) are not affected by the Arrangement.

15.  Implementation

　The provisions of the Arrangement will be implemented by the two Governments in accordance with the laws and regulations in force in their respective countries.

APPENDIX A

　The legal process to terminate all existing antidumping (AD) orders will be initiated on the following:

　-- AD petition filed March 30, 1977 by Gilmore Steel Corporation (Oregon Steel Mills) concerning hot-rolled carbon plate.

　-- AD petition filed October 6, 1981 by Lukens Steel Company concerning stainless clad plate.

　-- AD petition filed January 20, 1982 by Babcock and Wilcox Company (Tubular Products Division) concerning seamless and stainless pipe and tube.

FOOTNOTES

1 / Covered if of rectangular section. If 3/16 inch or over in thickness and hot rolled, excluded if 8 inches or less in width of if not pickled and cut to length.

2 / If 3/16 inch or more in thickness and hot rolled, excluded if 8 inches or less in width or if cut to length and riot pickled.

3 / Covered if in coil.

4 / Excluded if "tool steel," "high speed tool steel," and "chipper knife steel" as defined in schedule 6, part 2, subpart B, 2(h), (v), (vi), and (viii) of the Tariff Schedules of the United States Annotated. Also excluded if "band saw steel" as defined in schedule 6, part 2, subpart B, statistical headnote 1(b).

5 / Covered if less than 3/16 inch in thickness.

6 / Covered if of rectangular section.

7 / Covered if hot rolled.

8 / Covered if over 12 inches in width.

9 / Excluding "silicon electrical steel" as defined in schedule 6, part 2, subpart B, 2 (h) (ix) of the Tariff Schedules of the United States Annotated.

10 / Excluded if less than 0.0142 inch in thickness and if black plate meeting ASTM 625 or 650.

11 / Excluded if 3/16 inch or more in thickness and over B inches in width and hot rolled or over 12 inches in width and cold rolled.

12 / Covered if over 8 inches in width.

13 / Covered if 3/16 inch or more in thickness.

14 / Covered if riot in coil.

15 / Covered if hot rolled and over 8 inches in width or if cold rolled and over 12 inches in width.

16 / If less than 3/16 inch in thickness, covered if over 12 inches in width. If 3/16 inch or more in thickness, covered if over 8 inches in width.

17 / Covered if semi-finished products over 6 inches in thickness produced by rolling on a primary (slabbing) mill.

18 / Covered if clad.

19 / Excluding semi-finished products over 6 inches in thickness produced by rolling on a primary (slabbing) mill.

20 / Excluded if clad.

21 / Covered if structural shape having a maximum cross-sectional dimension of 3 inches or more.

22 / Covered if structural shapes.

23 / Covered if contains 0.35 percent or less lead or sulfur.

24 / Covered if contains over 0.35 percent lead or sulfur.

25 / Covered if hot finished of approximately circular section, in coil and not under 0.20 inch nor over 0.74 inch in diameter.

26 / Covered if railway track spikes.

27 / Covered if of circular section.

28 / Covered if galvanized wire fencing "wholly of round iron on steel wire measuring not over 0.20 inch and not under 0.075 inch in diameter, whether or not such wire is covered with plastics."

29 / Covered if cross-section in the form of circles, segments of circles, ovals, isosceles triangles, rectangles, hexagons, octagons, or quadrilaterals with only two sides parallel and the other two sides equal. If of rectangular section, covered if 3/16 inch or more in thickness and 8 inches or less in width if hot rolled and 12 inches or less in width if cold rolled. If of approximately circular section and hot rolled excluded if in coils, not under 0.20 inch in diameter and not over 0.74 inch in diameter.

30 / Excluding round blooms and billets, semi-finished products of circular cross-section having a length several times greater than the maximum cross-sectional dimension. A bloom is at least 36 square inches in cross-sectional area. A billet is less than 36 square inches but not less than 3 square inches in cross-sectional area. Note: billet rolled to bar tolerances or ordered to specifications could be classified as bar under the TSUSA.

31 / Excluded if cold formed or cold finished.

32 / Covered if 8 inches or less in width.

33 / Covered if cold rolled.

34 / Covered if cold formed or cold finished.

35 / Covered if coated or plated with metal.

36 / Covered if hollow bar or hollow mining drill steel.

37 / If less than 3/16 inch in thickness, covered if cover 12 inches in width. If 3/16 inch or more in thickness, covered when cold rolled if over 12 inches in width and when hot rolled if over 8 inches width,

38 / Excluded if coated, plated or clad with metal.

39 / Excluded if hollow bar or hollow mining drill steel.

40 / If clad and if less than 3/16 inch in thickness, covered if over 12 inches in width. If clad, plated or coated with metal and if 3/16 inch or mope in thickness, covered if over 8 inches or more in width when not cold tolled arid if over 12 inches in width when cold rolled. If not clad, plated or coated with metal covered if not in coils, if 3/16 inch or more in thickness, not pickled and over 8 inches in width and hot rolled.

41 / Covered if enameled.

42 / Covered if rectangular in cross-section, greater than 0.50 inch in width and less than 3/16 inch in thickness.

43 / Covered if either cold rolled, less than 3/16 inch in thickness, and 12 inches or less in width, or less than 3/16 inch in thickness, more than 12 inches in width and not clad with metal and cut to length.

44 / Covered if clad, plated or coated with metal. If clad and if less than 3/16 inch in thickness, covered if over 12 inches in width. If clad, plated or coated with metal and if 3/16 inch or more in thickness, covered if over 8 inches in width when not cold rolled and if over 12 inches in width when cold rolled.

45 / Excluded if pickled.

46 / Covered if 3/16 inch or over in thickness and pickled.

47 / If 3/16 inch or over in thickness, excluded if cut to length.

48 / If cold rolled, covered if coated or plated with metal. If hot rolled, covered if coated or plated with metal or if cut to length and not pickled.

49 / If hot rolled, excluded if 3/16 inch or over in thickness, and either 8 inches or less in width or not in coils and not pickled. If cold rolled, covered if 3/16 inch or over in thickness and over 12 inches in width.

50 / Excluded if silvered, gilded or platinum plated.

51 / Covered if "silicon electrical steel" as defined in schedule 6, part 2, subpart B, 2 (h) (ix) of the Tariff Schedules of the United States Annotated.

52 / Covered if coated or plated with chrome in all sheet, strip and plate sizes and shapes.

53 / Excluded if coated or plated with chrome.

54 / Excluding cladding grade 434 stainless steel certified by the importer of record or ultimate consignee to be used in the manufacture of stainless steel clad aluminum automobile trim.

55 / Excluding grade 253 MA and 254 SMO stainless steel.

56 / Excluding stainless steel sheet over 71 inches in width.

57 / Excluding "razor blade steel", i.e., stainless steel strip or flat wire not over 0.015 inch in thickness and not over 0.9 inch in width, containing by weight not less than 0.6 percent and not over 0.75 percent carbon, and containing by weight not less than 11.5 percent and not over 14.7 percent chromium, certified at the time of entry to be used in the manufacture of razor blades.

58 / Excluding stainless steel strip not over 0.05 inch in thickness certified by the importer of record or ultimate consignee to be used in the manufacture of stainless steel flapper valves for compressors.

59 / Covered if over 0.5 inch in width and cold finished.

60 / Covered if 12 inches or under in width.

61 / Covered if containing by weight less than 1 percent carbon and over 11.5 percent chromium.

62 / Covered if standard pipe.

63 / Covered if structural pipe and tube.

64 / Covered if line pipe.

65 / Covered if oil country tubular goods. (OCTG).

66 / Covered if mechanical tubing.

67 / Covered if pressure tubing.

68 / Covered if containing by weight 11.5 percent or less chromium or 1 percent or more carbon.

69 / Covered if containing by weight less than 0.3 percent carbon and 4 percent to 11.5 percent inclusive, chromium.

70 / Covered if containing by weight less than 4 percent chromium or 0.3 percent or more carbon and less than 11.5 percent chromium.

71 / Covered if "deformed concrete reinforcing bars," as defined in schedule 6, part 2, subpart B, 3 (d) of the Tariff Schedules of the United States Annotated.

72 / Excluded if "deformed concrete reinforcing bars," as defined in schedule 6, part 2, subpart B. 3 (d) of the Tariff Schedules of the United States Annotated.

73 / If rectangular in cross-section with a cold rolled finish, excluded if width is greater than 0.50 inch, or if width is not over 0.50 inch but thickness is greater than 0.25 inch.

74 / Covered if made of round wire and of one-piece construction. If under 1 inch in length and under 0.065 inch in diameter or 1 inch or more in length and 0.065 inch or more in diameter.

75 / Covered if "wire" as defined in schedule 6, part 2, subpart B, 3 (ⅰ) of the Tariff Schedules of the United States Annotated.

76 / Excluded if "wire" as defined in schedule 6, part 2, subpart B, 3 (ⅰ) of the Tariff Schedules of the United States Annotated.

77 / Covered if structural shape having a maximum cross-sectional dimension of less than 3 inches. If cold-formed, excluded if weighing 0.29 pound or less per linear foot.

78 / Covered if ingots, blooms, billets, slabs or sheet bars as defined in schedule 6, part 2, subpart B 3(a), 3(b) and 3(c) of the Tariff Schedules of the United States Annotated.

79 / Covered if coated or plated with tin and greater than 12 inches in width.

80 / Excluded if coated or plated with tin.

81 / Covered if coated or plated with metal and less than 3/16 inch in thickness.

82 / Covered if hot rolled and either less than 3/16 inch in thickness and 12 inches or under in width, or less than 3/16 inch in thickness, over 12 inches in width and not coated, plated or clad with metal.

83 / If 3/16 inch or over in thickness covered if over 8 inches in width, hot rolled, not coated, plated or clad with metal and either in coils or pickled.

84 / Covered if cold rolled and either less than 3/16 inch in thickness and 12 inches or under in width or less than 3/16 inch in width and not coated, plated or clad with metal.

85 / Excluded if containing by weight leas than 1 percent carbon and over 11.5 percent chromium. This exclusion does not apply if coated or plated with metal.

86 / Covered if in coil, rectangular in cross-section and over 0.50 inch in width and 3/16 inch or more in thickness or not over 0.50 inch in width and greater than 0.25 inch in thickness.

87 / Covered if cold rolled, 3/16 inch or over in thickness, over 12 inches in width and not coated, plated or clad with metal.

88 / Covered if wheels and axles.

89 / If 3/16 inch or over in thickness, covered if over 8 inches in width and hot rolled or if over 12 inches in width and cold rolled.

90 / Covered if sheet piling.

91 / Excluded if sheet piling.

92 / Excluded if OCTG.

93 / If cold rolled and not greater than 0.50 inch in width, covered if not in coil, or covered if in coil but 0.25 inch or greater in thickness.

94 / Covered if non-rectangular in cross-section. If rectangular in cross-section and 3/16 inch or more in thickness. excluded if hot rolled and over 8 inches in width, or cold rolled and over 12 inches in width.

95 / Covered if 0.50 inch or less in width and cold rolled.

96 / Covered if less than 3/16 inch in thickness, 12 inches under in width and coated or plated with chrome or if less than 3/16 inch in thickness, over 12 inches in width and coated or plated with metal or if 3/16 inch or more in thickness coated or plated with chrome and either over 12 inches in width if cold rolled or over 8 inches in width if hot rolled.

97 / Excluded if coated or plated with metal.

98 / Excluded if drilled, punched or similarly worked.

99 / Excluded if less than 3/16 inch in thickness and coated or plated with metal other than chrome.

100 / Excluded if stainless steel unless wire as defined in schedule 6, part 2, subpart B, 3(ⅰ) of the Tariff Schedules of the United States Annotated.

101 / Covered if coated or plated with a lead-tin alloy and over 12 inches in width when less than 3/16 inch in thickness or either over 8 inches in width and hot rolled or over 12 inches in width and cold rolled when 3/16 inch or more in thickness.

102 / Excluded if coated or plated with a lead-tin alloy.

103 / Covered if wire strand, i.e., a plurality of round or shaped wires helically laid in one or more layers.

104 / Covered if other than wire strand.

105 / Covered if 3/16 inch or more in thickness and either 8 inches or less in width and hot rolled or 12 inches or less in width and cold rolled.

106 / If hot rolled, covered if less than 3/16 inch in thickness. If hot rolled and carbon, also covered if 3/16 inch or more in thickness, greater than 8 inches in width and either in coil or pickled.

107 / If carbon, covered if cold rolled, 3/16 inch or more in thickness and over 12 inches in width.

108 / If carbon, excluded if either pickled or in coil.

109 / Excluded if door and window frames. Also excluded if columns, pillars, posts, beams, girders, and similar structural units made in part of stainless steel, or of cast-iron.

110 / Covered if hot rolled, coated or plated with metal, over 12 inches in width and less than 3/16 inch in thickness. Covered if cold rolled and less than 3/16 inch in thickness.

111 / Covered if cold formed, having a maximum cross-sectional dimension of less than 3 inches and weighing not over 0.29 pound per linear foot.

112 / Excluded if cold formed and weighing not over 0.29 pound per linear foot.

113 / Covered if cold formed and weighing not over 0.29 pound per linear foot.

114 / Excluded if off shore oil and natural gas drilling and production platforms and parts thereof.

115 / Covered if other than "alloy iron or steel" as defined in schedule 6, part 2, subpart B, 2 (h) (ⅰ) or (ii) of the Tariff Schedules of the United States Annotated.

116 / Covered if "alloy iron or steel" as defined in schedule 6, part 2, subpart B, 2 (h) (ⅰ) or (ii) of the Tariff Schedules of the United Stated Annotated.

117 / Excluded if cold rolled and less than 3/16 inch in thickness.

118 / Excluded if 3/16 inch or more in thickness and 8 inches or less in width if hot rolled or 12 inches or less in width if cold rolled.

119 / Excluded if coated, plated or clad with metal. This exclusion does not apply if less than 3/16 inch in thickness and 12 inches or less in width.

120 / Excluded if less than 3/16 inch in thickness, greater than 12 inches in width and coated or plated with metal.

121 / Excluded if thumb tacks; drive pins, studs and other fasteners suitable for use in powder-actuated hand tools; staples in strip form; corrugated fasteners, glaziers point, hook nails and ring nails; or railway track spike s. Also excluded if cut nails.

122 / Covered if made from wire of iron or steel with heads of ferrous or non-ferrous metals.

123 / Excluding "Silicon Electrical Steel" as defined in schedule 6, part 2, subpart B, 2 (h) (ix) of the Tariff Schedules of the United States Annotated and if over 12 inches in width, or if not over 12 inches in width when over 0.01 inch but not over 0.05 inch in thickness.

124 / Covered if pickled or cold rolled and over 12 inches in width and less than 3/16 inch in thickness. Also covered if not over 12 inches in width and over 0.01 inch, not over 0.05 inch, in thickness. Also, if cold rolled, product must be over 0.05 inch in width

125 / Covered if not coated, plated nor clad with metal.

126 / Covered if electrolytically coated or plated with metal other than tin, lead, zinc or chromium and not less than 3/16 inch in thickness.

127 / Excluded if cold rolled and not over 0.50 inch in width.

128 / Covered if electrolytically coated or plated with metal other than tin or chromium if 3/16 inch or greater in thickness and over 8 inches in width when hot rolled or over 12 inches in width when cold rolled, or if less than 3/16 inch in thickness, unless cold rolled and 0.50 inch or less in width.

129 / If not pickled and not cold rolled and either 3/16 inch or more in thickness and over 8 inches in width or less than 3/16 inch in thickness and more than 12 inches in width, covered of "tool steel of the type described in headnote 2(h) (vii)" in schedule 6, part 2, subpart B of the Tariff Schedules of the United States Annotated.

130 / If not coated or plated with metal, excluded if "tool steel," "high speed tool steel," or "chipper knife steel," as defined in schedule 6, Tariff Schedules of the United States Annotated.

131 / Excluded if electrolytically coated or plated with base metal other than tin, lead, or zinc or chromium.

132 / Excluded if conduit fittings.

133 / Excluded if containing by weight less than 1% carbon and over 11.5%, inclusive, chromium, or if containing by weight less than 0.3% carbon and 4% to 11.5%, inclusive, chromium

134 / If "Alloy Iron or Steel" as defined in schedule 6, part 2, subpart B, 2 (h) (ⅰ) or (ii) of the Tariff Schedules of the United States Annotated, only covered if less than 3/16 inch in thickness and over 12 inches in width or if 3/16 inch or more in thickness and over 8 inches in width when hot rolled or over 12 inches in width when cold rolled arid clad with metal.

135 / Excluded if hot finished of approximately circular section, in coil and not under 0.20 inch nor over 0.74 inch in diameter.

136 / Excluded if of rectangular section, carbon, hot rolled, 3/16 inch or over in thickness, over 8 inches in width, not coated, plated or clad, not pickled and cut to length. If alloy or if coated, plated or clad, excluded if of rectangular section, 3/16 inch or over in thickness and over 8 inches in width if hot rolled or over 12 inches in width if cold rolled.

137 / Excluded if structural shape.

138 / Covered if of rectangular section, less than 3/16 inch in thickness, clad and 12 inches or less in width. Excluded if clad and in sheet sizes.

139 / Excluded if "bar" as defined in schedule 6, part 2, subpart B, 3 (d) of the Tariff Schedules of the United States Annotated, and if containing by weight less than 1 percent carbon and over 11.5 percent chromium. This exclusion does not apply to reinforcing bar.

140 / Excluded in less than 3/16 inch in thickness and 12 inches or under in width and "Alloy Iron or Steel" as defined in schedule 6, part 2, subpart B, 2(h) (ⅰ) or (ii) of the Tariff Schedules of the United States Annotated.

141 / If pickled or cold rolled and 3/16 inch or more in thickness and over 8 inches in width when hot rolled or over 12 inches in width when cold rolled, covered if "tool steel of the type described in headnote 2 (h) (vii)" in schedule 6, part 2, subpart B of the Tariff Schedules of the United States Annotated.

142 / Covered if "tool steel of the type described in headnote 2 (h) (vii)" in schedule 6, part 2, subpart B of the Tariff Schedules of the United States Annotated.

143 / Covered if pickled or cold rolled.

144 / If 3/16 inch or more in thickness, and not alloy, covered when pickled or cold rolled. If less than 3/l6 inch in thickness, covered when hot rolled.

145 / Excluded if "Baling Wire" as defined in schedule 6, part 2, subpart B, statistical headnote 6 of the Tariff Schedules of the United States Annotated and if not coated or plated with metal.

146 / Covered if "Baling Wire" as defined in schedule 6, part 2, subpart B, statistical headnote 6 of the Tariff Schedules of the United States Annotated and if not coated or plated with metal.

147 / Excluded if bale ties.

148 / Covered if bale ties.

149 / Including rail for cranes.

150 / Excluded if weighing less than 8 pounds per yard.

151 / Covered if tie plates and joint bars.

152 / Excluded if drilled, punched or otherwise advanced.

153 / Excluded if of brass plated wire.

154 / Covered if barbed wire.

155  Covered if not over 0.01 inch or over 0.05 inch in thickness.

156 / Covered if fabricated structurals.

157 / Excluded if off shore oil and natural gas drilling and production platforms and parts thereof.

158 / Excluded if 2 or more pieces of iron or steel permanently welded into "H" or "I" shapes for use in structures.

159 / Covered if 2 or more pieces of iron or steel permanently welded into "H" or "I" shapes for use in structures.

160 / Excluded if round wire of "High Speed Tool Steel" as defined in Schedule 6, part 2, subpart B, 2(h) (ⅰ) or (ii) of the Tariff Schedule s of the United States Annotated.

161 / Excluded if cut, pressed or stamped to non rectangular shape.

162 / Covered either if cold rolled, or hot rolled and "Ally Iron or Steel" as defined in Schedule 6, part 2, subpart B, 2 (h) (ⅰ) or (ii) of the Tariff Schedules of the United States.

163 / Covered if plates, sheets or strip of iron or steel, whether or riot cut, pressed or stamped to nonrectangular shape, if electrolytically coated or plated with chromium oxide or with chromium and chromium oxide.

164 / Covered either if 3/16 inch or more in thickness and 12 inches or less in width or if not greater than 0.50 in width, covered if not in coil.

165 / Covered if cold rolled and if less than 3/16 inch in thickness and greater than 0.05 inch in width or if 3/16 inch or more and greater than 12 inches in width.

166 / If less than 3/16 in thickness and over 12 inches in width, excluded if coated, plated or clad with metal. If less than 3/16 inch in thickness and 12 inches or less in width, excluded if electrolytically coated or plated with base metal other than lead or zinc.

167 / Excluded if less than 3/16 inch in thickness and greater than 0.50 inch in width.

168 / Covered if cross section in the form of circles, segments of circles, ovals, isosceles triangles, rectangles, hexagons, octogons, or quadrilaterals with only two sides parallel and the other two sides equal. If of rectangular section, covered if 3/16 inch or more in thickness and 8 inches or less in width if hot rolled and 12 inches or less in width if cold rolled. If of approximately circular section and hot rolled excluded if in coils, not under 0.20 inch in diameter and not over 0.74 inch in diameter. Also covered if "deformed concrete reinforcing bars," as defined in schedule 6, part 2, subpart B, 3(d) of the Tariff Schedules of the United States Annotated.

169 / If over 12 inches in width, covered when cold rolled and not coated, plated or clad with metal. If not over 12 inches in width, covered either when cold rolled or when hot rolled and "Alloy Iron or Steel" as defined in schedule 6, part 2, subpart B, 2(h) (ⅰ) or (ii) of the Tariff Schedules of the United States Annotated.

170 / Covered if penstock, i.e., high-pressure hydro-electric conduits of steel.

171 / Excluded if penstock, i.e., high-pressure hydro-electric conduits of steel.

172 / Covered either if cold formed and weighing not over 0.29 pound per linear foot or if drilled, punched or otherwise advanced.

173 / If clad and if less than 3/16 inch in thickness, covered if over 12 inches in width. If clad, plated or coated with metal and if 3/16 inch or over in thickness, covered if 8 inches or more in width when hot rolled or if over l2 inches in width when cold rolled. If not clad, plated or coated with metal and if other than "Alloy Iron or Steel"  as defined in schedule 6, part 2, subpart B, 2(h) (ⅰ) or (ii) of the Tariff Schedule of the United States Annotated, covered if not in coils, if 3/16 inch or more in thickness, not pickled and over 8 inches in width and hot rolled. If not clad, plated or coated with metal and if 3/16 inch or more in thickness and if "Alloy Iron or Steel" covered if over 8 inches in width and hot rolled or if over 12 inches in width and cold rolled.

174 / Covered if less than 3/16 inch in thickness and over 12 inches in width and coated or plated with metal other than tin or chromium, or if less than 3/16 inch in thickness and not over 12 inches in width or if 3/16 inch or more in thickness and over 8 inches in width if hot rolled or over 12 inches in width if cold rolled, when electrolytically coated or plated with base metal other than tin, lead, zinc or chromium.

175 / Excluded if 3/16 inch or more in thickness and "Alloy Iron or Steel" as defined in schedule 6, part 2, subpart B, 2(h), (ⅰ) or (ii) of the Tariff Schedules of the United State s Annotated.

176 / Covered either if less than 3/16 ich in thickness and hot rolled and other than "Alloy Iron or Steel" as defined in schedule 6, part 2, subpart B, 2(h) (ⅰ) or (ii) of the Tariff Schedule of the United States Annotated, or when other than alloy and not coated, plated or clad with metal, if hot rolled and over 8 inches in width and pickled or in coil, or if cold rolled and over 12 inches in width.

177 / Covered either if less than 3/16 inch in thickness, hot rolled and 12 inches or under in width and other than "Alloy Iron or Steel" as defined in schedule 6, part 2, subpart 8, 2(h) (ⅰ) or (ii) of the Tariff Schedule of the United States Annotated, or less than 3/16 inch in thickness, hot rolled, over 12 inches in width and not coated, plated or clad with metal, or 3/16 inch or more in thickness when other than alloy and not coated, plated or clad with metal if hot rolled and over 8 inches in width and pickled or in coil or if cold rolled and over 12 in width.

178 / Covered if pickled and over 8 inches in width.

179 / If 3/16 inch or more in thickness, other than "Alloy Iron or Steel" as defined in schedule 6, part 2, subpart B, 2(h) (ⅰ) or (ii) of the Tariff Schedules of the United States Annotated and not coated, plated or clad with metal, covered if hot rolled and over 8 inches in width and pickled or in coil, or if cold rolled and over 12 inches in width. If less than 3/16 inch in thickness and over 12 inches in width, covered either when hot rolled and not coated, plated or clad with metal, or when containing by weight less than 1 percent carbon arid over 11.5 percent chromium, or when "Silicon Electrical Steel" as defined in schedule 6, part 2, subpart B, 2(h) (ix) of the Tariff Schedules of the United States Annotated. If less than 3/16 inch in thickness and 12 inches or less in width, covered at when hot rolled and other than "Alloy Iron Steel" or when cold rolled and greater than 0.50 inch in width if containing by weight less than 1 percent carbon and over 11.5 percent chromium or if "Silicon Electrical Steel" and over 0.01 inch but not over 0.05 inch in thickness. If electrolytically coated or plated with chromium oxide or chromium and chromium oxide, covered when less than 3/16 inch when greater than 0.50 inch in width or when 3/16 inch or more in thickness if over 12 inches in width. If coated or plated with tin, covered if less than 3/16 inch in thickness and over 12 inches in width.

180 / Excluded if structural pipe and tubing or line pipe.

181 / Excluded if line pipe.

182 / Excluded if structural pipe and tubing or oil country tubular goods.

183 / (This footnote deleted)

184 / Excluded if band saw steel defined as follows: "metal cutting band saw steel" referring to steel strip or flat wire, nor less than 0.024 inch arid not more than 0.036 inch in thickness, not less than 0.248 inch and not more than 2.0 inches in width, in coils, containing:

　carbon: not less than 1.18 percent and not more than 1.32 percent,
chromium: not less than 0.15 percent and not more than 0.32 percent,
manganese: not less than 0.10 percent and not more than 0.40 percent,

　certified by the importer of record of the ultimate consignee for use in the manufacture of metal--cutting band saw blades; or "wood band saw steel" referring to (a) alloy steel sheet or strip which contains, in addition to iron, each of the following elements by weight in the amount specified:

　carbon: not less than 0.70 nor more than 0.81 percent;

　manganese: not less than 0.30 nor more than 0.55 percent;

　silicon: not less than 0.20 nor more than 0.35 percent;

　nickel: not less than 1.60 nor more than 2.70 percent;

　chromium: none, or not more than 0.50 percent;

　phosphorus: none, or not more than 0.03 percent; and

　sulfur: none, or not more than 0.15 percent;

　or (b) cold rolled strip which contains, in addition to iron, each of the following elements by weight in the amount specified;

　carbon: not less than 0.70 nor more than 0.81 percent;

　manganese: not less than 0.30 nor more than 0.50 percent.

　silicon: not less than 0.20 nor more than 0.35 percent;

　chromium: none, or not more than 0.50 percent; and

　phosphorus: none, or not more than 0.03 percent; and

　sulfur: none, or nor more than 0.15 percent,

　certified by the importer of record or the ultimate consignee for use in the manufacture of wood band saws.

附属書E

I If the requestor of short supply is a foreign company through the GOJ, the request should include as a minimum the following:

　o Exact specifications of the product for which the request is made, including dimensions and metallurgical specifications, a list of TSUSA item numbers under which the product can be imported and the appropriate Arrangement category.

　o Total Japanese export ceiling in the appropriate period and shipments made in the period to date, including each Japanese producer's share of the ceiling and shipments made in the period to date.

　o The proportion of each Japanese producer' ceiling of the Arrangement category affected by the request allocated to the product for which the request is made. An explanation as to why this proportion cannot be greater, including the historical proportion for each producer.

　o A list of the names of all U.S. buyers of the product for which the request is made that each Japanese company has been unable to supply because of the ceiling, including details of proposed transactions such as terms of sale and the tonnages involved.

　o A list of all Japanese sales to U.S. customer of the product for which the request is made in the lust three years, indicating the buyers terms of sale and the tonnages involved.

　o The requestor's estimate of the operating rates of U. S. producers of the product for which the request is made, and an explanation as to why the requestor believes these figures demonstrate the existence of short supply.

　o Other information available to the requestor such as that pertaining to allocation or delivery times l that the requestor believes demonstrates the existence of short supply.

II If the requestor or short supply is a U. S. Company, the request should include as a minimum the following:

　o Exact specifications of the product for which the request is made, including dimensions and metallurgical specifications, a list of TSUSA item numbers under which the product can be imported and the appropriate Arrangement category.

　o A list of all U. S. producers of the product for which the request is made from whom the product has been purchased in the past three years, indicating the tonnages involved.

　o A list of all U. S. and foreign producers of the product for which the request is made that have refused to sell the product in the last three years, indicating the reason for the refusal.

　o A list of all offers to sell the product for which the request is made by U. S. And foreign producers in the last three years, that have been rejected by the requestor, indicating the proposed terms of sale and the reason for the rejection.

　o A list of other U. S. consumers of the product for which the request is made, including supporting statements indicating all U. S. and foreign producers of the product for which the request is made that have refused to sell the product in the last three years indicating the reason for the refusal.

　o The requestor's estimate of the operating rates of U. S. producers of the product for which the request is made, and an explanation as to why these figures  demonstrate the existence of short supply.

　o Other information available to the requestor such as that pertaining to allocation or delivery times, that the requestor believes demonstrates the existence of short supply.

(U. S. Note) 

　Washington, May 10, 1985

　Excellency,
  I have the honor to acknowledge the receipt of your Note of today' s date, enclosing the Arrangement attached thereto (hereinafter called "the Arrangement") concerning trade in certain steel products between Japan and the United States of America, which reads as follows:

"(Japanese Note)" 

　I have further the honor to confirm on behalf of the Government of the United States of America that it will implement its measures provided for in the Arrangement and to agree that your Note and this reply shall be regarded as constituting an agreement between the two Governments.

　I avail myself of this opportunity to renew to you, Excellency, the assurances of my highest consideration.

　(Signed) Robert E. Ligthizer
Deputy United States
Trade Representative

　His Excellency
Mr. Nobuo Matsunaga
Ambassador Extraordinary
and Plenipotentiary of Japan

　Agreed Minutes

　The representatives of the Government of Japan and the Government of the United States of America wish to record the following understandings in reference to the Arrangement on Certain Steel Products between the Government of Japan and the Government of the United States of America.

1. With respect to the phrase "destined for consumption" in Paragraphs 1 and 4, while both the Government of Japan and the Government of the United States of America agree that sill the Arrangement products originating in Japan are subject to the Arrangement, the Government of the United States of America recognizes that the ultimate destination of such products may not be known to the Government of Japan at the time of their exportation.

2. With respect to sub-paragraph (b) (1) of paragraph 2, the reference to petitions seeking import relief under section 337 is intended to include only those causes of action under section 337 that are duplicative of the Arrangement and not other causes of action such Hs patent infringement.

3.
(a) With respect to sub-paragraph (a ) of paragraph 2 of the Arrangement, the Government of the United States of America will notify the Government of Japan of the initiation of the legal process referred to in the above-mentioned sub-paragraph on the date of such initiation.

(b) With respect to sub-paragraph (a) of paragraph 2 of the Arrangement on the revocation of existing antidumping duty orders on the Arrangement products, the Government of the United States of America will exercise its best efforts so that such revocation will be completed within 45 to 6O days without any undue additional burden to the Japanese parties, including production of sales and cost data, verification by United States officials and production of any undertaking. Such revocation will be made effective for all such unliquidated entries on and after October 1, 1984 with deposited duties refunded with interest as provided by law. However, if revocation does not take place within a reasonable period of time, which in no event shall exceed 8 months, the Government of the United States of America will agree to the termination of the Arrangement with respect to those products subject to the remaining order in consultation with the Government of Japan. In determining what constitutes a reasonable period of time, due consideration shall be given to the reason for the delay. If the delay results from objections to revocation by Japanese respondents, the Government of Japan will not exercise its right of termination.

　With respect to unliquidated entries of the Arrangement products prior to October 1, 1984, subject to outstanding antidumping duty orders, the Government of Japan and the Government of the United States of America will make their best efforts to obtain the necessary actions from parties to such antidumping duty cases to obtain, where the final imposition of antidumping duties has not occurred, the imposition of duties equal to i) the amount of deposited duties or ii) the rate of the duties determined either in the most recently issued determination, or in any determination based upon the annual reviews substantially completed by the date hereof, which determination will be made as expeditiously as possible.

4. The Government of the United States of America understands that the Government of Japan will not exercise its right of termination under sub-paragraph (b) (2) of paragraph 2 of the Arrangement unless it is determined that the petition, investigation or litigation threatens the attainment of the objectives of the Arrangement.

5. Both Governments agree that, if, during the period in which the Arrangement is in effect, it is determined that any burden over and beyond the Arrangement is imposed by the United States of America upon any of the Arrangement products by any legislative or administrative action of the United States of America which is duplicative of the Arrangement, the Government of Japan shall be entitled to terminate the Arrangement with respect to some or all of the Arrangement products that are the subject of the action, after consultations with the Government of the United States of America, at the earliest 15 days after such consultations. If the significant trade interests of Japan are affected, termination may cover some or all of the Arrangement products in accordance with sub-paragraph (b) (2) of paragraph 2 of the Arrangement.

6.
(a) The amount of tonnage which was exported without a certificate shall be one of which the Government of the United States of America notifies the Government of Japan pursuant to paragraph 4 of the Arrangement unless otherwise agreed. The Government of the United States of America shall determine this amount by sharing with the Government of Japan United States invoice data sorted by the export date and classified by both individual exporter and individual manufacturer. The Government of the United States of America may amend such tonnage on the basis of documents or other sufficient evidence supplied by the Government of Japan. The date of export for pre-certificated shipments, as established by the United States Customs Service, is the date the shipment last leaves the territorial confines of Japan. The Government of the United States of America will provide data on the amount of pre-certificated tonnage as soon as such data becomes available.

(b) After the pre-certificated tonnage is determined, the United States will agree to consider any request from the Government of Japan concerning advance use.

(c) Tonnage in a sub--category of any category is subject to the export ceiling of the category, and unused tonnage in a sub-category in any period may be used in other sub-categories or remaining products in its category, subject to the category and sub-category export ceilings and the provisions for establishing new sub-categories from Possible new sub-category candidates. If either Party determines that a significant amount of any sub-category will be unused, consultations will be held to determine the appropriate time for its use, subject to the above conditions.

7. With respect to paragraph 5 of the Arrangement the Government of the United States of America will obtain and provide the October forecasts and revisions thereof of the United States apparent consumption as early in October as possible. Such forecasts and revisions will also be provided for possible new sub-category candidates.

8. In the event unexpectedly large and sudden fluctuations in the forecasts of apparent domestic consumption lead to difficulty in shipping within the export ceiling, the Government of the United States of America will consult upon request, and will give due consideration to whether additional flexibility concerning percentages or timing of use is required.

9.
(a) The provision in paragraph 6 of the Arrangement contains a limitation of 60 percent that is intended to avoid the concentration of shipments during any period of time. In addition, the provisions in the Arrangement that provide for flexibility, particularly those contained in paragraphs 6, 7 and 11 contain limitations that are intended to avoid the concentration of shipments daring any period of time or in any particular category or sub-category.

(b) The Government of the United States of America recognize s that the se provisions could have adverse effects and agrees to take appropriate actions to accommodate normal commercial considerations, including shipping schedules; to facilitate the full utilization of the export ceilings in the Arrangement; and to accommodate special situations that could occur in the Japanese export performance in specific categories or sub-categories.

10.
(a) With respect to carryover and advance use described in sub-paragraph (u) of paragraph 6 of the Arrangement, the Government of Japan shall, upon request of the Government of the United States of America, provide the Government of the United States of America with the forecast of carryover and advance use sheduled in that year after hearing from significant producers.

(b) The Government of Japan and the Government of the United States of America will cooperate to ensure the accuracy of information supplied on item 9 of the Certificate.

11. With respect to the adjustments described in sub-paragraph (b) of paragraph 7 of the Arrangement, the Government of Japan shall, by October 1 of each year and upon request of the Government of the United States of America, provide the Government of the United States of America with the forecast of adjustments scheduled in that year after hearing from significant producers.

12. Notwithstanding paragraph 8 and Appendix E of the Arrangement, the Government of the United States of America will not refuse to consider u request for short supply from the Government of Japan that does not contain all the information in Appendix E if all such information is not reasonably available to the Government of Japan.

13. With respect to paragraph 9 of the Arrangement, the Government of Japan will supply such data on computer tape on a monthly basis. In addition, paragraph 9 of the Arrangement and this paragraph will apply to each possible new sub-category candidate.

14. The Government of Japan and the Government of the United States of America agree, with respect to the creation of a new sub-category referred to in paragraph 11 of the Arrangement, as follows:

(a) A new sub-category will be created either at the beginning of the year or at the beginning of July each year following the consultation to be held on request in April and October each year.

(b) No new sub-category shall be created other than from those listed in Annex A and described and classified in Annexes B and C.

(c) A new sub-category may be created out of the products listed in the Annex A and described and classified in Annexes B and C when the following conditions are fulfilled:

(i) The Japanese share in the United States apparent consumption of the product in the 12 months ending 2 months before the month in which the consultation is held has increased by more than 10 percent over the benchmark share of United States apparent consumption in Annex A.

(ii) The import of the product from Japan has increased in quantity by more than that from any other significant exporting countries which entered into an arrangement or understanding with the Government of the United States of America under the President's Steel Decision of September 18, 1984 or EC, and provided that export restraint measures or measures with the same effect have been taken on the same product with respect to such other countries.

(d) The level of restraint with respect to the newly sub-categorized product shall be equal to the benchmark share of United States apparent consumption in Annex A.

NOTE 1: The increase of import s from Japan to accommodate short supply, or that caused by differences between the forecasted apparent consumption and the preceding forecasted apparent consumption or the actual figures or use of provisions concerning advance use, carryover should be duly considered in the above calculations.

NOTE 2: Notwithstanding the provisions (a) and (c) (i), for the year 1985, the consultation shall be held in October and "12 months ending 2 months before the month in which the consultation is held" shall be replaced by "the calendar year 1985."  Therefore, consultations may begin in October on the basis of data available, but new sub-categories will not be established until final 1985 data is available. Any new sub -categories will be made effective from January 1, 1986.

NOTE 3: Notwithstanding paragraph 11 of the Arrangement, sub-categories of stainless steel sheet and strip and plate shall not be created as long as the present relief measures under Section 201 of the Trade Act of 1974 are in effect.

15. With respect to semi-finished steel products when the total imports of the semi -finished steel products into the United States of America differ substantially from the level of 1.7 million net tons per year, the Government of Japan and the Government of the United States of America will consult in order to review the export ceiling of 100, 000 net tons.

16. With respect to wire rope and strand described and classified in Annexes B and C. the Government of Japan and the Government of the United States of America agree as follows:

(a) The coverage of wire rope and strand under the Arrangement and as provided herein will not be conditional upon the withdrawal of antidumping cases.

(b) These products will also be subject to export licensing upon revocation of existing antidumping orders with an export ceiling to be mutually agreed upon in consultations.

(c) For such time as antidumping orders remain in effect, the Government of Japan agrees to monitor exports; provide monthly export data on a quarterly basis; consult promptly if exports of either wire rope or strand reach the 1983 level; furthermore if the 1982-1983 average level for wire rope or the 1982-1984 average level for wire strand is reached, institute export licensing at either or both of those levels unless the United States determines after consultation that market conditions make such licensing unnecessary.

(d) If export licensing is instituted under sub-paragraph (c) above, the Government of the United States of America will take appropriate action with respect to revocation of existing orders.

(e) The provisions of the Arrangement other than paragraphs 1, 3, 4, 10, 12, 13 and 14 shall otherwise be suspended until such time as export licensing is instituted pursuant to this paragraph.

17. With respect to fabricated structurals, the Government of Japan and the Government of the United States of America agree as follows:

(a) Within the annual export ceiling of 100, 000 net tons for the fabricated structurals, the export ceiling for welded H-beams which is treated as a sub-category and is described and classified in Annexes B and C will be 60,000 net tons in the Initial Period 48,000 net tons on the years 1986, 1987 and l988 and 36,000 net tons in the End Period.

(b) Notwithstanding paragraph 6 of the Arrangement, for fabricated structurals, other than welded H-beams, advance use or carryover flexibility will be permitted between the Initial Period and the 1986 Period at a level of not more than 50 percent. In subsequent periods, advance use and carryover will be permitted at a level not to exceed 8,000 net tons.

(c) Consultations will be held by the end of 1986 to determine whether a change in the export ceiling for fabricated structurals other than welded H-beams is appropriate.

18. With respect to the 6O percent limitation and the limitations on timing of use of advance use and carryover contained in paragraph 6 of the Arrangement, the Government of the United States of America agrees to give special consideration to the normal trade patterns of the fabricated structurals, other than welded H-beams, which are characterized by the significant fluctuations, and most of which are accounted for by the exports of bid-type projects.

19. The view of the Government of the United States of America concerning the applicability of the antitrust laws of the United States with respect to the Arrangement are those set forth by the Department of Justice which are attached herewith as Annex D.

　Washington, May 14, 1985

　For the Government of For the Government of

　Japan the United States

　(Signed) (Signed)

　Nobuo Matsunaga Robert E. Ligthizer

ANNEX A

　POSSIBLE NEW SUB-CATEGORIES (CANDIDATES)

　Benchmark (%)

　Possible New Sub-Categories Share of U.S. Apparent Consumption

　Sheet and Strip

　Cold-rolled Sheet  (including Black Plate and Heat Registing) 4.74

　Cold-rolled Strip 3.24

　Stainless Sheet and Strip 2.69

　Electrical Sheet and Strip 4.19

　Tin Plate 5.53

　Tin-free Steel 4.13

　Plate

　Stainless Plate 1.82

　Alloy Plate 1.31

　Structurals

　Rails and Rail Products 10.25

　Small Bar Shapes 2.48

　Bar

　Carbon Hot-finished Bar (including Hollow Bar and Hollow Mining Drill Steel) 1.61

　Alloy Hot-finished Bar (including Hollow Bar and Hollow Mining Drill Steel) 2.02

　Pipe and Tube

　Standard Pipe (including Conduit) 5.47

　Mechanical Tube 4.39

　Pressure Tube 10.90

　Stainless Pipe and Tube (including Heat Registing) 16.56

　Wire Rod, Wire and Wire Products

　Carbon and Alloy Wire 9.88

　Stainless Wire 10.15

　Other Wire Products, NES. 4.77

Annex D

　The Honorable Robert E. Lighthizer Deputy United States Trade Representative Washington D.C.

　Dear Ambassador Lighthizer:

　This letter responds to your request for the views of the Department of Justice on antitrust questions regarding measures being contemplated by the Government of Japan to restrain the export of certain steel products to the United States. These export restraints are to be implemented under the Arrangement Concerning Trade in Certain Steel Products Between Japan and the United States, negotiated between the U.S. and Japanese governments following the enactment of the Trade and Tariff Act of 1984 and In accordance with the National Policy for the Steel Industry.

　You have advised us that the Japanese Government contemplates implementing and enforcing the export restraints called for by the Arrangement in the following way:

(1) For each steel product category and sub-category covered by the Arrangement, the Ministry of International Trade and Industry (MITI) will determine the. tonnage available to each Japanese steel producer for export to the United States. MITI will issue written directives to each producer setting forth that producer's allowable tonnage for export to the U.S.

(2) MITI will direct Japanese steel producers to form an export arrangement, and will direct steel exporters to form an export association, in accordance with Japan's Export and Import Trade Law, for the purpose of limiting the quantity of steel exported to the U.S. to the volumes called for by the Arrangement and by MITI's allocation of those volumes among producers.

(3) Upon the formation of the export arrangement and export association, MITI will subject the export of all steel products covered by the Arrangement to export licensing requirements pursuant to Article 28(2) of the Export and Import Trade Law. Export licenses will be refused for any exports to the United States in excess of the quantities allowed to each producer by MITI. Any entity which exports any covered steel product to the U.S. without a license will be punished by criminal sanctions under Article 42, and be subject to a one year embargo of future exports under Article 28(4), of the Export and Import Trade Law. The exporters' association will 1 be directed by MITI to administer these export licensing measures.

(4) MITI will require the producers and exporters, individually and/ or through the producers' arrangement and exporters' association, to submit to MITI such reports as are required to assure MITI that its directives are being followed. Failure to submit the required reports will be punishable, and punished, under Japanese law.

(5) Except as described above, the producers and exporters will not be authorized by MITI to enter into any other agreements regarding quantities, prices, customers, or terms of sale of steel products to the United States.

(6) To further assure compliance with its directives, as described above, MITI has stated and will advise the producers and exporters in writing that in the event of noncompliance MITI will promptly make the export of Arrangement-covered steel products to the U.S. subject to export licensing under Article 48 of the Foreign Exchange and Foreign Trade Control Law and Article 1 of the Export Trade Control Order, and will enforce through that mechanism the export maximums it has established. Any entity that exports steel to the United States without an export license issued by MITI under these provisions will be punished by criminal sanctions under Article 70, and be subject to u one year embargo sanction under Article 53, of that law. As we understand the explanation provided by the Japanese Government, export licensing measures under the Export and Import Trade Law (as described in paragraph 3 above) can only be implemented upon the formation of export arrangements or associations pursuant to that law (as described in paragraph 2 above). While MITI fully expects the producers and exporters to comply with its directives to form such an arrangement and association, MITI's statement that it is prepared in any event to impose equivalent restraints under alternative provisions of Japanese law makes clear to the companies that they have no practical choice but to comply.

(7) Lastly, the Japanese Government has represented that MITI has the responsibility and authority under Japanese law to carry out the described measures.

　In these circumstances l we believe that the Japanese firms' compliance with MITI's directives would properly be viewed as having been compelled by the Japanese Government, acting within its sovereign powers. The implementation of such an export restraint by the Government of Japan, including the division among producers by MITI of the maximum volume of each product that may be exported to the United States, would not in our view give rise to violations of Unites States antitrust laws. We believe that an American court, properly applying and interpreting our antitrust laws, would likely so hold.

　Sincerely,

　Charles F. Rule

　Acting Assistant Attorney General 
Antitrust Division