257. CIEP Study Memorandum No. 81

MEMORANDUM FOR

  • The Chairman of the Operations Group

SUBJECT

  • Generalized Tariff Preferences for Developing Countries

The President has directed that before generalized tariff preference legislation is submitted to Congress, the Operations Group should prepare a study reexamining the present proposal in light of the recommendations of the President’s Commission on International Trade and Investment Policy (the Williams Commission)2 to determine whether there are modifications which should be made.

The study should focus on the following issues:

1.
How the proposal could be modified to ensure that the distribution of benefits resulting from preferential access to the U.S. market reflects the differences among developing countries in their relative competitiveness and need for preferential treatment.
2.
How the present safeguard provisions could be strengthened so that the U.S. is in a position to take appropriate action if the responsibility for markets for LDC products is not being equitably shared by the European Community and Japan.
3.
What further modifications would ensure that the overall impact of the U.S. scheme, once in operation, will be comparable to the programs of the European Community and Japan, and that the U.S. scheme neither appears nor is in fact more generous than those of the European Community and Japan.
4.
How withdrawal or withholding of tariff preferences can be used as leverage in expropriation cases.
5.
An estimate of the trade impact of Generalized Tariff Preferences, including a separate breakout for Latin America.

In considering modifications, the study should analyze the advantages and drawbacks entailed by each change in the present scheme. Consideration should also be given to the method of handling each recommended change—whether through inclusion in the legislation itself or by request for additional executive authority to be used if it becomes [Page 658]apparent through trade monitoring that further constraints by product or by country are necessary.

The Operations Group’s examination of these issues should be submitted by August 30, 1971.3

Peter G. Peterson
  1. Source: National Archives, RG 59, S/S Files: Lot 82 D 126, CIEP Study Memoranda. Confidential.
  2. See Document 256.
  3. See Document 265.