Foreign Relations of the United States, 1958–1960, Foreign Economic Policy, Volume IV

77. Circular Telegram From the Department of State to Certain Diplomatic and Consular Missions⁰

August 11, 1958, 6:18 p.m.

147. Joint State/Commerce/USIA Message. Final Congressional approval given today to bill extending President’s trade agreements authority for four years and granting authority reduce existing tariffs by 20 percent or 2 percentage points. President has said publicly bill is acceptable and he will sign even though it does not contain everything he deems desirable. Information policy guideline: All posts should make optimum appropriate use this favorable development in speeches, statements, etc., emphasizing this is longest period for which authority granted in history of program, that new Act gives meaningful authority reduce duties which not lost year by year as in 1955 Act, and that it reflects stability of liberal US foreign trade policy. Will inform when bill signed. Watch for wireless file Fitch column.

Foreign officials likely inquire re certain amendments in new Act which they may interpret as limiting authority reduce tariffs in trade negotiations or threatening increased tariffs and other import restrictions, especially:

1. Peril points:

a) Without excluding other factors Tariff Commission required, to extent practicable, to determine average invoice prices at which articles under consideration for tariff concessions are sold for export to US, and average prices at which competitive domestic articles sold at wholesale in US. Comment: Should not be interpreted as indicating US Government adopting cost-of-production basis for tariff-making.

b) On articles being considered for tariff concessions Tariff Commission required, to extent practicable, to estimate maximum increase in imports which may occur without causing serious injury. Comment: Not per se indicative increased resort to import quotas.

c) Escape clause investigation to be instituted automatically whenever Tariff Commission finds in peril-point investigation that duty increase required to avoid serious injury. Comment: This is procedural amendment to facilitate earlier settlement issues in such cases.

2. Escape clause:

a) President is given increased authority to raise rates, and authority for first time to transfer items from free to dutiable list. Comment: Emphasize such authority permissive not mandatory.

b) By approval within sixty days of concurrent resolution by two-thirds vote of each House, Congress may override President if he disapproves Tariff Commission recommendation in whole or part. Comment: Point out i) does not eliminate Presidential discretion in escape clause actions; ii) two-thirds vote in each House much more difficult than simple majority.

3. National security provision:

a) Specifies certain factors to guide Director Office of Defense and Civilian Mobilization (ODCM) and President in considering whether imports are threatening impair national security. Comment: Point to care with which existing national security provision applied and fact that President retains discretion.

b) If Director ODCM advises President that in his opinion impairment to national security threatened by imports any article, President must adjust imports such article and its derivatives unless he determines imports not threatening impair national security. Comment: Emphasize history of care taken in ODCM findings under existing legislation, and fact that President retains discretion.

Missions in GATT countries should inform consular posts under their jurisdiction. Kits containing text and analysis of new Act and background material will be airpouched soon to all diplomatic missions and to principal consular posts in GATT countries.¹

Dulles

0. Source: Department of State, Central Files, 411.0041/8–1158. Official Use Only. Drafted by Kallis; cleared in draft with Adair, Kirlin, Metzger, E, Commerce, and USIA; and initialed for the Secretary by Willoughby. Sent to all diplomatic posts and Geneva.
1. Eisenhower signed the bill, P.L. 85–686, “The Trade Agreements Extension Act of 1958,” on August 20. For text of the President’s statement upon signing the legislation, see Public Papers of the Presidents of the United States: Dwight D. Eisenhower, 1958, p. 632. For text of P.L. 85–686, see American Foreign Policy: Current Documents, 1958, pp. 1526–1535.