394.31/6–651: Telegram

The Secretary of State to Embassies in France, the United Kingdom, and Canada


6606 [Paris], 5678 [London], 190 [Ottawa]. Re Trade Agreements Act renewal. Congress has now completed action on, and Pres will probably shortly sign, bill renewing TA Act. Bill provides two-year extension existing authority negotiate for reduction duties. However, bill differs from existing TA Act fol principal respects:

1. Escape clause. Bill requires escape clause procedure generally like that heretofore provided for through executive order. Language in bill describing circumstances under which escape clause may be resorted to differs some respects, but not materially, from provisions [Page 1380] Art XIX GATT. Final appraisal of significance these differences from viewpoint GATT not yet completed. Ability any domestic industry require investigation by Tariff Commission to determine whether it is suffering or threatened with injury from imports is materially facilitated by various provisions of bill. Prospect is that nr escape clause investigations undertaken by Tariff Commission will increase considerably.

2. Peril pt provision. Bill sets up procedure whereby Tariff Commission, before new trade agreement negots are entered into, required set “peril pt” respect each US duty being considered for negot, i.e., pt beyond which reductions wld cause or threaten serious injury domestic industry or to which rate shld be increased order avoid such injury. If any rate reduced below peril pt or is not increased to peril pt in any negot, Pres required report this fact to Cong and describe reasons for action taken with respect art in question. This provision similar peril pt provision TA Extension Act 1948 [1949], except earlier peril pt provision required transmission Cong of Tariff Commission’s peril pt findings with respect all products covered by trade agreement, wherever any one of them was exceeded.

3. Communist amendment. Bill requires Pres soon as practicable deny to products from USSR and “from any nation or area dominated or controlled by fon govt or fon org controlling world communist movement” benefits all present and future concessions negotiated under TA Act. Some countries affected by this provision have agreements in force with US granting them rights which are at variance this provision, while others do not. Re Soviet dominated countries and areas where US has no MFN obligations, expected trade agreement concessions will be withdrawn by Pres action shortly after bill signed. Action re other countries will depend on nature of obligation involved. US will denounce its existing agreement with USSR which guarantees MFN treatment that country, and will probably denounce MFN” commitments with nr satellite countries. At end denunciation period provided for these various agreements, imports from areas concerned by and large will be subject to rates contained in Tariff Act 1930. No determination yet made how deal Czecho, which is guaranteed duty concessions and MFN treatment through its adherence GATT.

4. Emergency treatment for perishable commodities. Bill sets up procedure whereby Secy Agric may determine that, due to perishability an agriculture commodity, condition exists requiring emergency treatment. In such circumstances, Tariff Commission must immed investigate either under escape clause or under sec 22 Agric Adjustment Act and must make recommendations to Pres for such relief as appropriate under those provisions. This means, in gen, where imports [Page 1381] causing or threatening injury either to producers or to agricultural program such as price stabilization, Tariff Commission must make recommendations to Pres. Report of Tariff Commission and decision of Pres must be made within 25 days of time Secy Agric submits case to Tariff Commission. Another provision same section authorizes Pres take action these cases without awaiting Tariff Commission recommendations, but unclear to Dept how this provision wld operate in practice.

6. [sic] Consistency with sec 22. Bill provides: “No trade agreement or internatl agreement heretofore or hereafter entered into by US shall be applied in manner inconsistent with requirements of “sec 22 Agric Adjustment Act. This amendment raises possibility Pres may be required impose quantitative restrictions on imports threatening domestic agricultural program, even though circumstances not such justify import restrictions under GATT. Whether situations this sort will arise in fact problematical. No policy yet formulated way situation will be handled if it arises.

7. Appeals to customs court. Bill restores right domestic producer appeal customs court contest tariff classification imported art. This right previously terminated respect products covered in trade agreements.

8. Prohibition imports of certain communist furs. Pres required soon as practicable take measures prevent import certain types furs from Soviet Union and Communist China. This action, like action called for by Communist amendment summarized para 3 above, will not be taken respect Soviet furs until existing trade agreement with USSR denounced and is inoperative. Prohibition against Chinese furs, however, will be applied shortly after Act goes into effect.

Text bill being airmailed.

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