427. Memorandum From the Assistant Secretary of Agriculture for International Affairs and Commodity Programs (Palmby) to the President’s Special Counsel (Colson)1
- Beef imports
I cannot believe that we are serious about a triggering of quotas under the Meat Import Law, a set-aside of the quotas by the President and then a decision to increase the allowable level of imports by a couple of hundred million pounds.2 I say this (a) because we have not yet completed the process of implementing our mid-January decision to [Page 1051] proceed with voluntary restraints in 1970 at a level of 1,062 million pounds; (b) because we had a high-level White House decision in December and early January which led to the restraint program in which we fully discussed the suggestions described above;3 (c) because the economic facts have not changed materially since that time; and (d) because of the political headaches involved.
Let me take the last point first. We had great difficulty in convincing our friends on the Hill and the cattlemen that the allowable level should be increased for this year. They are concerned because for the first time in nearly a decade cattle producers in this country are getting a decent return. And now that they are getting a decent return, people are saying bring in more imports to dampen the situation. Further, the restraint program is a substitute for quotas. We are already being charged with not using the quota law when we should be doing so. Think of the storm that will arise when we are not only accused of not using the quota law but of misusing it to hit our cattlemen. I honestly believe that if we were to add a couple of hundred million pounds to the present import level, we would guarantee that the cattlemen would become an overwhelming force in support of textile quotas, of shoe quotas, of steel quotas, and any other protective legislation you and I can think of.
Think of the disbelief we would create in people’s minds if before we have even signed all the agreements to implement the decision of last January, we announced a new and completely different action. We are supposed to have signed restraint agreements with 12 countries. To date, only 6 have been signed. If anyone were to ask us the question, we would have to admit that this was a fact. Yet, my boss, Secretary Hardin, after those meetings late last year and early this year made a public announcement that we had the necessary agreements to hold imports to a level of 1,062 million pounds. We have said we would close loopholes for imports coming in, especially through Canada. We have not done so. This action is sitting, we understand, on the President’s desk. My boss has his neck stuck way out on the question of doing what we said we would do last January. It would be a severe blow to him and to this Department to consider a reversal at this time.
Late last year and early this year the bone of contention among the participants which led to voluntary restraints was exactly the same kind of action that is now being discussed. At that time all the arguments were being made about an increase in the import level. At that time beef prices were higher than they had been in earlier years. Yet the decision was made. Here, we want to emphasize that although the prices were [Page 1052] up, they were not nearly so high as they had been during the summer months of 1969.
Now regarding the economic facts, our prices for beef cattle today are about $2.00 higher than they were at the same time last year. For all of 1970 we are looking for cattle prices to average somewhat above last year, but we are not looking for the run-up which occurred last May and June. Obviously, if that situation would occur again, we would have to take a look at the import level. But that is not our expectation. We should also keep in mind that cattlemen should not be penalized for cost factors beyond their control. It was not their fault that retail price decreases in 1969 lagged behind the drop in cattle prices. You may recall that this was a matter on which we did a little orating at that time with some success.