We have always recognized that some actions we need to take under Section 22
are consistent with the GATT. Import fees
on products on which we have not undertaken to bind the import charges
against increase are in that category. Quotas on products on which we have
domestic restrictions on production or marketing are likewise permissible.
The difficulty is that the requirements of Section 22 necessitate the use of
quotas and fees in other cases as well, where their use is not consistent
with GATT. Details as to which Section 22
situations are and which are not consistent with the GATT are in Tab A.
The waiver we seek is only intended to cover the cases in which the
requirements of Section 22 have necessitated or may necessitate imposition
of fees or quotas that are inconsistent with the GATT.
Tab A
Section 22 requires that when the President finds that imports threaten
to interfere materially with farm programs or threaten to render such
programs ineffective he shall impose such fees or quotas (within
specified limits as to their restrictiveness) as will in his judgment
prevent the interference from imports. Some restrictions that the United
States must impose under these criteria are consistent with GATT and some are not.
With regard to fees under Section 22, GATT prohibits such fees without exception when they are
applied to items on which the United States has granted a concession.
Consequently, without a waiver, fees we must impose constitute a
violation when they apply to concession items. Our fee on filberts is a
case in point.
Another part of the problem arises in the use of quotas. GATT Article XI contains a general
prohibition against quantitative restrictions on imports except in
certain specified situations. We need a waiver to permit the use of
quotas under Section 22 to the extent that such quotas are inconsistent
with GATT. The few situations in which
such quotas are permitted by exceptions in GATT, which Mr. Howe
may have had in mind, are as follows:
Quotas are permitted on imports of an agricultural product when necessary
to the enforcement of governmental measures to restrict the quantity of
the domestic products permitted to be marketed or produced. The United
States quota on cotton, wheat, and peanuts are justified under this
provision because production restrictions are in effect on these
products. (But quotas on many items are not justified because we have no
production or marketing restrictions on them.)
Article XI also permits import restrictions necessary to the removal of
temporary surpluses if the surpluses are being made available to certain
groups of domestic consumers free of charge or at prices below the
current market (note this excludes foreign giveaway). To qualify, such a
program must, however, provide an effective disposal of a temporary
surplus. We have no effective programs for the disposal of surplus
products in the United States within the terms of this provision. In
addition, it would be difficult to get others to agree that our
surpluses are temporary. They are the outgrowth of the incentive price
support programs and are likely to [Page 80] continue indefinitely unless price supports are lowered or
restrictions are imposed on domestic production.
GATT Article XX, II(c) permits import
restrictions essential to the liquidation of temporary surpluses arising
out of the exigencies of the war. It would be difficult to persuade
other countries that burdensome surpluses which developed eight years
after the end of hostilities are due to the exigencies of the war.
Our present Section 22 restrictions on dairy products, oats, rye, barley
and filberts are not permitted under any provision of GATT. These restrictions, as well as
future actions which we may have to take on agricultural products, would
require a waiver under the GATT
