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166. Memorandum From the Special Representative for Trade Negotiations (Strauss) to President Carter 1

SUBJECT

  • Extension of the Countervailing Duty Waiver

As I have previously informed you, the expiration on January 2, 1979 of the authority to waive the imposition of countervailing duties poses a serious threat to the MTN. Once the waiver authority expires, countervailing duties will have to be assessed on a range of products from various countries. The European Community has indicated that it would be politically intolerable for them to conclude an MTN package, including a subsidy countervailing duty code, in December only to have countervailing duties imposed in a manner inconsistent with the code after January 2, 1979.

We need a waiver extension to cover the period from conclusion of the MTN until it is voted upon by the Congress. Because the waiver authority includes provisions protecting U.S. industries from subsidized competition (i.e., no waiver may be granted unless adequate steps are taken to “reduce or substantially eliminate” the adverse effect of the subsidy), extension of the waiver authority for some seven months should impose no burden on U.S. industries and workers.

The attached draft legislative proposal2 would provide for an extension of the waiver authority, provided that the President on or before January 3, 1979, determines that an agreement on subsidies and countervailing duties has been reached and that agreement on the MTN as a whole has been substantially concluded.

I have discussed this issue with the House and Senate leaders and key members of the Ways and Means and Finance Committees. The legislation we need will not be easy to obtain, but they have agreed to go forward. They have requested from us a Presidential Message to the Congress proposing the necessary legislative initiative. I have attached [Page 516]a draft statement from you to the Congress3 and a draft legislative proposal.

  1. Source: National Archives, RG 364, 364–80–4, Special Trade Representative Subject Files, 1977–1979, Box 2, Countervailing Duties 1977. No classification marking. A typed notation reads: “IMMEDIATE ACTION REQUESTED.” Carter wrote at the top of the page: “Bob—Don’t embarrass us with Congress’ rejection. J.” Attached is a September 28 note from Hutcheson to Strauss, in which Hutcheson notes: “The attached was returned in the President’s outbox today and is forwarded to you for appropriate handling. The President signed the statement to the Congress today.”
  2. Not attached.
  3. Not attached. Carter sent a message to Congress requesting an extension of the countervailing duty waiver on September 28. For the text of the message, see Public Papers of the Presidents of the United States: Jimmy Carter, 1978, Book II, pp. 1663–1664.