Foreign Relations of the United States, 1964–1968, Volume VIII, International Monetary and Trade Policy

331. Memorandum From the Acting Special Representative for Trade Negotiations (Roth) to President Johnson¹

Washington, February 13, 1967, 10 a.m.

SUBJECT

• Supplemental Authority to Offer Tariff Concessions in the Kennedy Round

Request for Negotiating Authority

This memorandum requests that you authorize me, under the Trade Expansion Act of 1962 (TEA), to offer in the Kennedy Round the tariff concessions specified herein as supplements to those previously offered with your approval. All legal requirements of the TEA for such offers have been met.

Offering these concessions will: (1) dispel the legal cloud which was cast over a substantial portion of our previous offers by tariff legislation enacted after those offers were made; (2) improve our negotiating prospects by responding to other delegations’ requests for U.S. concessions previously withheld with your concurrence; and (3) permit us to offer, for the benefit of developing countries, the elimination of duties on tropical hardwoods without staging.

Any trade agreement which is negotiated on the basis of offers for which I now seek your authorization will be concluded subject to your final approval. During the negotiation, we may find it appropriate or necessary to hold back, reduce, or withdraw certain of these offers. On the other hand, it may again become necessary for me to seek your authorization to offer specific additional concessions in return for foreign concessions of particular importance to U.S. exporters.

Discussion:

(1) Confirmation of Previous Offers—Changes in tariff rates and tariff classifications made by the Tariff Schedules Technical Amendments Act (TAA),² which corrected “errors and inadvertencies” in the Tariff Schedules of the United States (TSUS), and by a few other acts cast a legal cloud over a substantial portion of the articles that you authorized us to offer for concessions in the Kennedy Round, and that we had in most cases actually offered. On August 16, 1966, you issued a list of the articles affected by such legislation, and thus initiated the steps required by the TEA for reconsideration of such articles for trade agreement concessions. The Trade Information Committee (TIC) and the Tariff Commission held hearings to receive information and views on these products. The advice of the Tariff Commission and the summaries of the TIC hearings have been made available to you in accordance with section 224 of the TEA and, together with other material, have been carefully reviewed by this Office and other agencies concerned with the trade agreements program.

(2) New Offers on Articles Previously Withheld—On November 10, 1964, you authorized Governor Herter to offer concessions on most articles in the TSUS and agreed to withhold certain dutiable articles from offers of tariff concessions. In the course of the Kennedy Round negotiations, other delegations have urged us to make offers on certain of these excepted articles, and our delegation advises that our negotiating prospects could be enhanced by responding to some of these requests. We have accordingly re-examined the situation with respect to articles withheld and have concluded that, in a limited number of cases, it would not be consistent with the standards and purposes of the TEA to offer concessions in the Kennedy Round in such cases.

(3) New Offers on Tropical Hardwoods—On November 10, 1964, you authorized Governor Herter to offer the elimination of duties on certain tropical hardwoods under section 202 of the TEA, which permits the elimination, in five annual stages, of the duty on any product dutiable at 5 percent or less. An offer on these tropical hardwoods under section 202 has already been made in the Kennedy Round.

Section 213 of the TEA, which authorizes the elimination of duties applicable to certain tropical agricultural and forestry products, is not subject to the staging requirement. In order to maximize our negotiating position with respect to the less-developed countries, we required the Tariff Commission to determine those tropical hardwoods which satisfy the requirements of section 213.

On February 18, 1965, you issued a public list of the tropical hardwoods with respect to which the elimination of duties under section 213 was to be considered. The TIC and the Tariff Commission provided an opportunity to interested parties to appear at public hearings or submit written statements concerning the public list.

The advice of the Tariff Commission concerning the tropical hardwoods has been made available to you in accordance with section 224 of the TEA. Since no views of any kind were presented to the TIC, there is no summary of hearings to submit pursuant to section 224.

Recommendation:

With the concurrence of the other agencies concerned, I recommend that you authorize me, as your Acting Special Representative for Trade Negotiations:

1. With respect to articles listed in the public notice of August 16, 1966 (Annex 1A),³ to make the following offers in substitution for or confirmation of offers previously made in the Kennedy Round:

Annex 1, “Confirmation of Previous Offices: A. Public Notice of August 16, 1966; B. List of Exceptions to Offers to Reduce Duties by 50 Percent; C. Tariff Commission Advice, November 1966; D. Summary of TIC Hearings;” Annex 2, “New Offers on Articles Previously Withheld;” Annex 3, “New Offers of Tropical Hardwoods: A. Public Notice of February 18, 1965; B. Tariff Commission Advice, May 1965.” None is printed.

A. To offer, under TEA section 201, the full 50 percent reduction in duties on all dutiable articles so listed except those specified in Annex 1B.

B. To offer the elimination of duties on articles which so qualify under TEA sections 202 or 212.

C. Where the reduction or elimination of duties is not proposed, to offer under TEA section 201 not to increase existing duties on dutiable articles on such list and not impose duties on articles now duty-free.

2. With respect to certain other articles, previously withheld from offer with your concurrence, to offer, under TEA section 201, duty reductions as specified in Annex 2 to augment offers previously made in the Kennedy Round.

3. With respect to the tropical hardwoods listed in the public notice of February 18, 1965 (Annex 3A) to offer the elimination of duties under TEA section 213.

William M. Roth

1. Source: Johnson Library, National Security File, Subject File, Trade Negotiations, Kennedy Round, “Potatoes,” [2 of 2], Box 47. Confidential.
2. The Tariff Schedules Technical Amendments Act of 1965, P.L. 89–241 (79 Stat. 933) signed by President Johnson on October 7, 1965, corrected oversights and errors in the Tariff Classification Act of 1962 (P.L. 87–456; 76 Stat. 72).
3. The annexes are as follows: