611.5831/239
Memorandum by Mr. Charles F. Darlington, of the Trade Agreements Section, for the Assistant Chief of the Division of Western European A fairs (Hickerson)
Mr. Wijkman, the Commercial Counselor of the Swedish Legation, asked me informally to bring to the officers charged with the negotiation of the trade agreement with Sweden the following matter.
Sweden is a high cost country with a relatively small domestic market, especially for certain articles which are important in her export trade. Because of this, prices can sometimes be quoted lower abroad than in Sweden since the quantities sold are larger and since the selling costs may be lower. In particular, a large purchaser of a Swedish export product in this country can force the Swedish manufacturer to make concessions which he could not make in the Swedish market and still sell at a profit.
This difficulty is taken care of in Section 202 (b) and (c) of Title II of the Anti-dumping Act of 1921.3 It is therein provided that when the wholesale quantities differ in the foreign and domestic markets, “then due allowance shall be made therefor in determining the foreign market value.”
No similar provision, apparently, exists regarding the valuation of merchandise for the levying of the import duty. In any event no provision to this effect is contained in Section 402 of the Tariff Act of 19304 which deals with valuation.
Mr. Wijkman would greatly appreciate it if there could be included in the notes to be exchanged between the United States and the Swedish Governments, at the time of the signing of the trade agreement, a statement to the effect that “care will be taken by the United States Customs appraisers in the valuation of merchandise, for the purpose of duty assessment as well as for that of the Anti-dumping Act, that no undue hardship will be placed upon imports coming from countries having high costs of protection [production?] or a small domestic market.” (These are my words; I think they express Mr. Wijkman’s idea).
[Page 741]Within the limits imposed by my unfamiliarity with this matter, Mr. Wijkman’s desire seems reasonable. What he wants, in effect, is a re-statement of the principle contained in Section 202 (b) and (c) of the Anti-dumping Act and the extension of this principle to cover valuation for duty purposes. Whether this extension is legally possible in the absence of action by the Congress, I have my doubts. Mr. Wijkman holds that instructions to appraisers in this sense regarding the interpretation of the term “foreign value” is an entirely legal administrative function.
Mr. Wijkman states that people in Sweden would attach great importance to a statement such as proposed above, even though its value be admittedly almost wholly psychological. In these circumstances, I take pleasure in submitting it to you for your kind consideration.