Foreign Relations of the United States, 1951, National Security Affairs; Foreign Economic Policy, Volume I

Department of State Press Release No. 13, January 7, 1952¹

January 7, 1952

United States To Invoke Escape Clause on Hatters’ Fur Duty

The President has signed a proclamation modifying a United States tariff concession on certain grades of hatters’ fur, effective after the close of business February 8, 1952. The concession was originally made in the General Agreement on Tariffs and Trade, concluded at Geneva in 1947. The action modifying the concession is based on an investigation and report to the President by the United States Tariff Commission and is being taken under section 7 of the Trade Agreements Extension Act of 1951 and in accordance with the provisions of Article XIX (the “escape clause”) of the General Agreement.

The Presidential proclamation puts into effect higher rates of duty on certain hatters’ fur in accordance with the recommendations of the Tariff Commission following the Commission’s investigation. This investigation was conducted in response to an application to the Tariff Commission by representatives of the domestic industry.

The Tariff Commission’s report and the President’s action applies to “hatters’ fur, or furs not on the skin, prepared for hatters’ use, including fur skins carroted”, described in item 1520 of the United States schedule (schedule XX) of the General Agreement. The present rate of duty is 15 percent. The new rate of duty will be 47½ cents per pound, but not less than 15 percent or more than 35 percent ad valorem. Under this new duty the maximum rate of 35 percent will apply to hatters’ fur valued at $1.36 or less; the minimum rate of 15 percent will apply to fur valued at $3.16⅔ or more per pound; and the rate of 47½ cents per pound will apply to imports valued between those two prices. Thus there will be no change in the duty on hatters’ fur valued at $3.17 or more per pound. Imports of hatters’ fur in recent years have come principally from Belgium, France and Italy.

The escape clause (Article XIX) of the General Agreement requires that any contracting party invoking it shall notify the other parties of its action and shall consult with regard to that action if consultation is desired. If agreement is not reached in such consultations and the action is nevertheless taken, other contracting parties having a substantial interest in exportation of the product may take compensatory action. They may suspend substantially equivalent concessions which they have granted to the contracting party invoking the escape clause, unless such suspension is disapproved by the contracting parties to the General Agreement acting as a group. The required notice in this case has been given to the other contracting parties and consultations have been begun with the countries principally concerned.

In its report to the President the Tariff Commission stated that it “will keep developments with respect to hatters’ fur under constant review for the purpose of making whatever recommendation may hereafter be warranted by changed conditions”. The White House has released a letter from the President to the Chairman of the Tariff Commission in which the President expresses the opinion that it would be worthwhile to adopt a regular procedure for periodic review and report with respect to every instance of modification of a trade agreement concession pursuant to an escape clause. The President’s letter indicates that while it is essential to safeguard American industry from serious injury, it is also necessary to insure that trade agreement concessions are not modified for a period longer than required to prevent or remedy the injury. The letter states that retention of the modifications for a longer period could have various adverse effects. It could harm American exporters by encouraging other countries to apply retaliatory withdrawals of concessions. It could injure American consumers by unnecessarily adding to the cost of goods they buy. It could also impede American foreign policy objectives by denying other friendly nations the opportunity to earn dollars needed for their economic recovery and mutual defense. Accordingly, the President states that he has requested that an Executive Order be prepared for his consideration which would call for a full investigation and report by the Tariff Commission on each escape clause modification at periodic intervals in order to determine whether or not the modified concession should be continued.

Copies of the Tariff Commission’s report to the President are obtainable from the Commission. Copies of the President’s letter to the Chairman of the Commission are available at the White House.

1. Source text from International Trade Files, Lot 57 D 284, Box 161, “Escape Clause.” Text also in Department of State Bulletin, January 21, 1952, p. 96.