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

SUBJECT

  • Fastener Import Relief

I have sent you a separate memorandum through regular channels reporting the results of our interagency deliberations on the fastener escape clause case.2

I believe this is a critical case for our trade policy. We intend to submit to Congress for approval early next year the most ambitious package of trade agreements ever negotiated. Before that package can be considered, we will need Congressional approval of an extension of our countervailing duty waiver authority (otherwise the EC cannot finalize the agreements). In my judgment, a recurrence of the kind of override fight we had earlier this year3 would seriously undermine our chances of getting an extension and thus of concluding our trade negotiations.

Moreover, there is a growing feeling in the Congress that we are rejecting relief in so many cases that the Trade Act is not working as originally contemplated. Frankly, this feeling has little foundation—but it is certainly prevalent.

I have talked to a number of your strongest free trade supporters and they think relief in this case, at this time, is absolutely necessary to manage our trade program in Congress in 1979.

All of the agencies which have worked on the case appreciate these broader considerations, and reflect them in taking positions favoring relief of some kind.

Of the two options we have presented to you in my other memo, Option 2 represents the minimum we need to satisfy the domestic industry and the Congress. I have sounded out representatives of the domestic i[Page 561]would react favorably to this approach.4

  1. Source: National Archives, RG 364, 364–80–4, Special Trade Representative Subject Files, 1977–1979, Box 4, Fasteners. Limited Official Use.
  2. The memorandum was not found. In October, the ITC again ruled that imports were harming the U.S. fastener industry. (“ITC Says Imports Aren’t Hurting AMF Subsidiary,” The Wall Street Journal, October 27, 1978, p. 5)
  3. In April, the Carter administration successfully convinced a majority of the members of the House Ways and Means Committee not to vote to override Carter’s decision against providing import relief to the U.S. fastener industry. (Clyde H. Farnsworth, “House Group Backs Carter Trade Move,” The New York Times, April 28, 1978, p. D1) For Carter’s decision not to provide import relief, see Document 102.
  4. Carter announced his decision to provide import relief to the U.S. fastener industry on December 22. Noting that his relief measures differed from those recommended by the ITC, Carter granted a 15 percent tariff increase for 3 years. For the text of Carter’s letter to Congress and memorandum to Strauss conveying his decision, see Public Papers of the Presidents of the United States: Jimmy Carter, 1978, Book II, pp. 2283–2285. Strauss forwarded a proclamation giving effect to this decision for Carter’s signature under cover of a January 3, 1979, memorandum. Carter initialed at the top of Strauss’ memorandum and wrote “done reluctantly.” (National Archives, RG 364, 364–80–4, Special Trade Representative Subject Files, 1977–1979, Box 4, Fasteners) Presidential Proclamation 4632, “Temporary Duty Increase on the Importation Into the United States of Certain Bolts, Nuts, and Screws of Iron or Steel,” was issued on January 4, 1979. For the text, see Public Papers of the Presidents of the United States: Jimmy Carter, 1979, Book I, pp. 3–5.