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

334. Memorandum From the Acting Special Representative for Trade Negotiations (Roth) to the President’s Deputy Special Assistant for National Security Affairs (Bator)¹

Washington, March 13, 1967.

SUBJECT

• Kennedy Round: Supplemental U.S. Offers

Summary

This memorandum (a) supplements my memorandum to the President of February 13² by commenting on probable Congressional interest in the supplemental Kennedy Round offers that I have asked the President to approve and (b) amends that memorandum by deleting a request concerning one commodity category.

February 13 Memorandum

In response to the request that Ed Hamilton made of Bernie Norwood earlier this month, we have reviewed the articles for which, in my February 13 memorandum, I requested the President’s authority to offer concessions at Geneva.

You will recall that that memorandum requested authority: (a) to reaffirm well over 100 existing offers for which our negotiating authority became “clouded” because of the enactment of legislation correcting or otherwise amending the TSUS; (b) to offer a few minor improvements in offers by “exing-out” subitems that previously had been excepted; and (c) to offer duty eliminations without staging (under section 213 authority) on certain tropical hardwood to improve the existing offer of duty eliminations subject to staging (under section 202).

One reason for early Presidential action on the request is to permit us rapidly at Geneva to exchange with other delegations a “positive” list of current offers. The delegation is planning to do this during the current week—incorporating the supplemental offers if they are approved in time. This exchange is an important element in our pushing other lethargic participants.

Congressional Interest

Of the items covered in my request, our review of files indicates that there would be significant Congressional interest in only a handful of cases. I shall comment on these.

TSUS 182.70—Wild Rice

Congressional interest seems to have been confined to ex-Senator Hubert Humphrey. Wild rice is grown in Minnesota by Indians. They like it so much that they eat all of it and do not market it. Our proposal does not call for a duty reduction, but only for a binding of the existing tariff treatment.

TSUS 609.40,-.41,-.43—Round Wire

The only expression of Congressional interest seems to have been Mr. Chenoweth (R., Colo.). He is no longer in the Congress.

TSUS 700.51,-.52,-.53—Protective Rubber Footwear

Congress removed the requirement for ASP valuation, subdivided the item into three categories, and established a separate rate for each subitem. The only item of significant interest is rubber boots and galoshes. Although Senator Ribicoff wanted a rather high rate of duty for this item, a rate of 37–1/2% was established. Wilbur Mills knocked the rate down to that level from a rate that emerged from previous discussions. We are seeking authority for only a “partial” (that is, less than 50%) reduction on this item to a level of 30% ad valorem.

TSUS 745.40—Button Blanks

Reductions have been opposed by Dow (D., N.Y.); Schmidhauser (D., Iowa); Hungate (D., Mo.); and Duncan (R., Tenn.). We had not offered concessions on this item in November 1964 because we wanted to await legislation which would close a loophole that led to the importation of virtually finished buttons under a low tariff rate for button blanks. This loophole has been closed. We are offering buttons for a full reduction and should offer button blanks also for a full reduction in order to maintain the existing relationship between the rate of duty on the finished product and the lower rate of duty on the intermediate product. With the loophole closed, we doubt there would be any serious opposition to the proposed rate reduction.

TSUS 745.65,-.68—Snap Fasteners

In connection with the issuance of the August 1966 public notice,³ we heard from Senators Ribicoff (D. Conn.); Talmadge (D., Ga.); Pell (D., R.I.); and Congressmen McCormack (D., Mass.); Fogarty (D., R.I.) and Curtis (R., Mo.). In connection with the 1963 public notice,⁴ we heard from Senator Hartke (D., Ind.). Our judgment—which reflected a complete absence of requests for exception in our interagency deliberations—was that there would be no adverse effect on the domestic industry as a whole although some small producers might be affected. Incidentally, when we were considering whether to recommend termination of the safety pin escape-clause case, we received some Congressional representations against the decrease—in particular from some of the Connecticut delegation on behalf of the highly diversified and healthy Scovill Manufacturing Company. Scovill is also an important producer of snap fasteners. The elimination of the escape-clause duty seems to have had no adverse effect on the economy of Connecticut or on Scovill. Indeed, the company is doing markedly better than ever.

Modification of February 13 Memorandum

Among the items for which, in my February 13 memorandum, I sought authority for a full reduction was brooms (750.26 through-.32). Because of a negotiating decision, we are withdrawing fully our original 50% reduction offer on this item. Accordingly, we do not believe it useful to request authority for reduction and propose expressly excepting this item from the general authorization requested in my February 13 memorandum. To accomplish this change in my request, I attach some revised pages to Annex 1B that is a part of the memorandum.⁵ Please (a) substitute the attached pages (each of which for easy identification) is marked with an “r” at the lower left corner of the page for page 2 of the original text and (b) renumber the old page 3 as the new page 4.

1. Source: Johnson Library, National Security File, Subject File, Trade Negotiations, Kennedy Round, “Potatoes,” Box 47. Confidential. An attached memorandum from Bator to President Johnson, March 22, stated among other things that Roth’s “recommendation was supported by all relevant agencies.” Bator recommended that Johnson approve it. The “approve” line on Bator’s memorandum is checked.
2. Document 331.
3. 31 Federal Register 10949, August 16, 1966.
4. 28 Federal Register 11251, October 21, 1963.
5. Not printed.