Foreign Relations of the United States, 1977–1980, Volume III, Foreign Economic Policy

170. Letter From the Chairman of the Subcommittee on Trade of the House Ways and Means Committee (Vanik) and the Ranking Minority Member of the Subcommittee (Steiger) to the Special Representative for Trade Negotiations (Strauss)¹

Washington, October 17, 1978

Dear Bob:

All of our efforts to legislate an extension of the authority to waive the imposition of countervailing duties, as well as to enact other sorely needed trade legislation, the adjustment assistance bill, came to naught, as you know by now, in the waning hours of the 95th Congress.

Since a number of us on the House Trade Subcommittee worked very hard to respond to the request of the President and to your own plea to extend the waiver,² we want to share with you some thoughts on this problem in terms of the future legislative posture.

All of us involved in this issue knew the extension of the waiver would be difficult. It proved impossible. Further, many of us feared that the textile question would be finally joined with the issue of extending the countervailing duty waiver. That prediction proved to be 100 percent correct.³ We mention this only because we believe there is a lesson in the last few weeks for all of us.

We believe this lesson is that we should not attempt to extend the waiver unless it is done in the context of obtaining international agreement on a code of discipline over subsidies and countervailing duties which meets U.S. objectives, and, more importantly, in the context of domestic implementation of such an agreement. To attempt to extend the waiver in any other context will once again bring forth the individual commodity concerns that we were faced with in our attempts to enact the waiver extension in the last Congress.

As you know, the votes in both Houses to withdraw textiles from the MTN were overwhelming. We believe that strength will be sufficient post elections in the new Congress to produce the same outcome for any new attempt to legislate a waiver extension. The only possible qualification on this assessment would be if our important textile offers were withdrawn administratively or if there were clarification of a “snapback” provision.

In this connection, we believe the lesson we have learned should be communicated to our trading partners, particularly those in the European Communities. We strongly urge you to tell them that in this effort on this very important issue, both Houses of Congress approved the extension of the countervailing duty waiver on two separate occasions.⁴ Being familiar with the many issues involved in those votes, we believe the proper interpretation of them is that the Congress wants above all else an international discipline over subsidies which distort international trade.

On that note, we would hope that you would indicate to your colleagues in the negotiations our belief that our Members are prepared to be understanding of the concern over the termination of the waiver authority. Particularly, we believe that the Congress would be willing to extend retroactively the treatment provided in the new code to those cases involving the assessment of countervailing duties which under a new international code of discipline would not be subject to countervailing duties.

Bob, we do not believe those doomsayers on the failure of the extension of the waiver on countervailing duties. We all worked very hard (including my staff and your own staff—Alan Wolff, Dick Rivers, John Greenwald and John Donaldson). We believe we were unsuccessful because of forces beyond our immediate control. We just feel strongly that we should focus on concluding the negotiations and leave any legislation on countervailing duties to the implementing phase.

Sincerely yours,

• Charles A. Vanik
• William A. Steiger

1. Source: National Archives, RG 364, 364–80–4, Special Trade Representative Subject Files, 1977–1979, Box 2, Countervailing Duties 1977. No classification marking.
2. See Document 166.
3. Before it adjourned on October 15, Congress passed legislation (H.R. 9937) rescinding the U.S. authority to negotiate on textiles in the MTN. (Dennis Farney, “Congress Lacked a Unifying Philosophy Amid Concern Over Inflation, Spending,” The Wall Street Journal, October 16, 1978, p. 18)
4. Both the House of Representatives and the Senate passed legislation that included provisions extending the countervailing duty waiver, but the provisions were in different bills. (“Treasury Is Seeking Way to Blunt Impact Of Countervailing Duties on Trade Talks,” The Wall Street Journal, October 17, 1978, p. 3)