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Transition Reports (1977) - Commerce Department: Domestic and International Business Administration (2)
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Transition Reports (1977) - Commerce Department: Domestic and International Business Administration (2)
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The original documents are located in Box 34, folder "Transition Reports (1977) -
Commerce Department: Domestic and International Business Administration (2)" of the
John Marsh Files at the Gerald R. Ford Presidential Library.
Copyright Notice
The copyright law of the United States (Title 17, United States Code) governs the making of
photocopies or other reproductions of copyrighted material. Gerald R. Ford donated to the United
States of America his copyrights in all of his unpublished writings in National Archives collections.
Works prepared by U.S. Government employees as part of their official duties are in the public
domain. The copyrights to materials written by other individuals or organizations are presumed to
remain with them. If you think any of the information displayed in the PDF is subject to a valid
copyright claim, please contact the Gerald R. Ford Presidential Library.
Digitized from Box 34 of The John Marsh Files at the Gerald R. Ford Presidential Library
Product Liability Program
Background
As a result of reports of increasing product liability claims
and sharply rising insurance premiums, the Economic Policy
Board requested in January 1976 that the Bureau of Domestic
Commerce prepare an issue paper on product liability.
The paper stated that sufficient evidence was found to justify
a more substantial investigation. The Board approved the
preparation of a study which was published in March 1976. The
Bureau of Domestic Commerce Staff Study, Product Liability
Insurance: Assessment of Related Problems and Issues found
evidence that:
Insurance premiums were rising sharply.
Some industries were experiencing difficulty in
obtaining products liability insurance.
Some industries were experiencing an increasing
number of claims and lawsuits as result of product
related injuries.
Small businesses and capital goods producers were
the most severely impacted.
It was also found that the meager data base available precluded
analysis of the causes and effects of the problems as proper
analysis of proposed remedies.
As a result of the study, Mr. L. William Seidman, Executive
Director of the Economic Policy Board approved the establish-
ment of an Interagency Task Force on Product Liability (See
Attachment 1 memo from Mr. Seidman to Under Secretary James
Baker). The Task Force is composed of agencies that have an
interest in product liability problems and is chaired by
Mr. Edward O. Vetter, Under Secretary of Commerce.
An Advisory Committee on Product Liability was formed to advise
the Under Secretary in Product Liability matters. The
Committee has 19 members who are representative of the following
groups: Manufacturers, Distributors, Retailers, Lawyers,
Insurers, Insurance Commissioners, Labor and Consumers.
The Committee has had two meetings and has provided assistance
to the work of the Task Force. The Committee is chartered to
exist until June 1978.
-2-
Issue
Product liability is the responsibility imposed on a manu-
facturer or others in the distribution chain, for injuries
or damages caused by a defective product. It has not been
a problem to industry or of great significance to the consumer
or worker until recent years. Changing legal concepts, con-
sumer activism, and increased emphasis on product safety
have led to an apparent increase in the number and size of
products liability claims and lawsuits. Many companies and
industry associations have reported that the insurance
problems may drive them out of business with resulting
unemployment. They cite the inflationary impact of the
increased cost associated with product liability claims.
They state further that many products may be removed from
the market place and that companies will be reluctant to
introduce new products.
Analysis of Issue
Analysis of the product liability system, development of
remedies and preparation of the reports are conducted under
the direction of Professor Victor Schwartz, on leave from
the University of Cincinnati. In addition to in-house
analysis, three major contracts were issued. In these, data
are gathered from the insurance industry, legal institutions
and manufacturing industries. These data are analyzed for
description of the product liability system and for use in
developing and evaluating proposed remedies. In addition,
data on injuries from State Workers' Compensation systems,
Occupational Safety and Health Administration systems, and
the Consumer Products Safety's National Electronic Injury
Surveillance system are used to analyze the nature of product
related injuries.
In addition to information received from the Advisory Committee
and from a symposium in which experts in the field presented
issues papers, a formal request for public comment and data
by the Under Secretary of Commerce was published in the Federal
Register.
The principal products of the Task Force project will be a
policy options paper, a composite research report and three
contractor reports. A partial list of currently available
products (see Attachment 2).
Schedule
The Task Force is required to report to the Economic Policy
Board on December 15, 1976. The incoming Administration would
probably wish to review the task force reports and determine
whether legislation should be proposed, and, if so, what form
the legislation should take.
Attachment 1
THE WHITE HOUSE
WASHINGTON
April 23, 1976
MEMORANDUM FOR JAMES A. BAKER III
FROM:
L. WILLIAM SEIDMAN LWS
1976 APR 27 NI 11 52
EXECUTIVE SECRETARIAT
OFFICE OF THE SECRETARY
U.S. DEPARTMENT OF COMMERCE
SUBJECT:
Product Liability Insurance
I appreciate your providing me with the packet of materials as requested
concerning the program to address the problem of product liability. I
have four suggestions:
1. We are aware of numerous requests for copies of the staff
study on "Product Liability Insurance: Assessment of Related Prob-
lems and Issues" prepared by the Department of Commerce in response
to a request from the Economic Policy Board Executive Committee.
Our past practice has been not to release any documents containing
recommendations or alternatives for consideration by the Economic
Policy Board or the President. I am anxious to maintain this precedent
and at the same time be responsive to legitimate requests for the infor-
mation and data collected. Accordingly, I am hereby authorizing you to
release those portions of the study which are purely informational in
nature and which do not contain recommendations or alternatives for
consideration by the Economic Policy Board.
2. The tendency in government to create interagency mechanisms
to address particular issues has in the past often led to a plethora of
entities with no overall direction or reporting mechanism to the Presi-
dent. The Economic Policy Board was created in September 1974 in
part to replace a host of interagency cabinet level committees that were
then dealing with economic policy matters. Since it is impractical for
the EPB Executive Committee to itself undertake specialized studies,
we have adopted the practice of establishing task forces and subcom-
mittees, generally at the Under or Assistant Secretary level, to address
particular problems and report to the EPB Executive Committee and
ultimately to the President. Product liability is clearly an issue which
requires an interagency effort and the EPB Executive Committee has
approved the establishment of a task force. I suggest that the task force
158114
-2-
be chaired by the Department of Commerce and consist of representatives,
at the Assistant Secretary level or higher, from the Departments of
Commerce, Justice, Health, Education and Welfare, Housing and Urban
Development, Labor, Transportation, Treasury, the Council of Eco-
nomic Advisers, the Office of Management and Budget, the Assistant to
the President for Economic Affairs, the Small Business Administration,
and the Consumer Product Safety Commission. Since you have been inti-
mately involved in the effort thus far, I recommend that you chair the
task force and that the task force report periodically to the EPB Executive
Committee.
3. I agree that it would be useful for the task force to have an
advisory committee on product liability to draw upon the expertise of
individuals in the private sector.
4. I am somewhat concerned about the projected time schedule for
the task force effort. We now have approximately 8 months until late
December when the preparations for the 1977 State of the Union message
should be receiving final consideration. I prefer a time schedule for the
task force geared to providing recommendations that might be included
in the 1977 State of the Union address.
I would be pleased to discuss these suggestions with you at your
convenience.
Attachment 2
Materials Available:
- Transcript of the Symposium July 21, 1976.
- Transcript of Advisory Committee Meetings.
September 20, 1976
November 1, 1976
- Minutes of the Working Task Force Meetings.
- Working Paper #2 - On Proposed Remedies of Current
Product Liability Law.
- Contractor Reports (drafts) .
International Labor Organization Withdrawal Question
Background:
The U.S. Government representation in the tripartite American
delegation to the ILO has been, in turn, tripartite. It
consists of representatives of the Departments of State,
Labor and Commerce. Within Commerce, ILO matters, including
representation at conferences and meetings of the Governing
Body, are presently handled by a Legislative Review Officer
in the Legislation Division, Office of Business and Legislative
Issues, Bureau of Domestic Commerce.
At the 1975 Annual Conference in June 1975, the Palestine
Liberation Organization was granted "observer" status and
given the right to address, and participate in the work of,
the Conference. Immediately thereafter, the U.S. delegation
walked out of the Conference in protest. The AFL-CIO
delegation did not return. The U.S. Government and employer
delegations returned after a two day absence.
This action on the PLO was viewed by those in Washington
responsible for ILO affairs (including the U.S. Chamber of
Commerce and the AFL-CIO) as the last straw in the trend
toward politicization within the ILO. The U.S. thereupon
began to evaluate a means by which the U.S. "could return
the ILO to its original purposes." After succeeding in
having the House Appropriations Committee delete Department
of State appropriations of U.S. contributions to the ILO,
the AFL-CIO Executive Council called on the U.S. Government
to give a "notice of intent to withdraw," the constitutionally
required two-year notification. Until such notice was
transmitted, the AFL-CIO would not support payment of dues
to the ILO.
Secretary of Labor Dunlop established an Inter-Agency ILO
Assessment Task Force comprising representatives of
Secretarial Offices of Commerce, State, and Labor to prepare:
1) a mini-study of the ILO issue; 2) an outline of a full
study on the ILO to be completed with the assistance of the
AFL-CIO and the U.S. Chamber of Commerce; and 3) a "notice
of intent to withdraw" from the ILO. In addition, a staff-
level Working Group was established to assist the Task Force.
Although the Task Force did not succeed in preparing a
complete "mini-study," nor an outline for further study,
they reached a decision to send the "letter." The President
concurred with this decision. The "letter," which was
developed after prolonged negotiations between all three
Departments, was delivered to the Director General of the
ILO on November 6, 1975.
-2-
Issue:
Should the United States carry out its announced intention
of withdrawing from the ILO before the expiration of the two
year notice period, i.e., before November 6, 1977?
Analysis of Issue:
The "letter" noted that the United States intention to with-
draw was the result of an erosion of support for the
organization within the U.S. Specifically, the letter
cited four trends within the ILO which had detracted from
its original purpose and which had changed its character.
These are: a) the erosion of tripartite representation
(government, employers and workers) b) selective concern
for human rights c) disregard for due process, and d) the
increasing politicization of the ILO.
Schedule:
To analyze the progress made in U.S. efforts to return the
ILO to its original purposes the President has established
a Cabinet-level Committee. The Department of Commerce
official responsible for this Committee has been the Under
Secretary (others include, inter alia, the Secretary of
Labor and the President, AFL-CIO). This Committee will
decide if the U.S. should remain in the Organization, or in
fact depart.
By mid-January 1977, the General Accounting Office is expected
to make its report on executive branch participation in the
ILO to Senator Ribicoff's Government Operations Committee.
In June 1977, the 63rd Annual Conference of the ILO will take
place in Geneva. Thereafter, the Cabinet-level Committee,
the tripartite delegation, and the staff will review the
Conference and developments since the "letter" was transmitted
to the Director General. By the end of July a decision should
be made to depart the ILO on schedule, or to "withdraw" the
letter.
Appendix - Letter of November 5, 1975, from the Secretary
of State to the Director General of the ILO,
giving notice of U.S. intention to withdraw
from the Organization and describing the
reasons for this action.
Appendix
November 5, 1975
The Director General
International Labor Office
Geneva, Switzerland
Dear Mr. Director General:
This letter constitutes notice of the intention of
the United States to withdraw from the International Labor
Organization. It is transmitted pursuant to Article 1,
Paragraph 5, of the Constitution of the Organization which
provides that a member may withdraw provided that a notice
of intention to withdraw has been given two years earlier
to the Director General and subject to the member having
at that time fulfilled all financial obligations arising
out of its membership.
Rather than express regret at this action, I would
prefer to express confidence in what will be its ultimate
outcome. The United States does not desire to leave the
ILO. The United States does not expect to do SO. But we
do intend to make every possible effort to promote the con-
ditions which will facilitate our continued participation.
If this should prove impossible, we are in fact prepared
to depart.
American relations with the ILO are older, and perhaps
deeper, than with any other international organization. It
is a very special relationship, such that only extraordinary
developments could ever have brought us to this point. The
American labor movement back into the 19th century was assoc-
iated with the international movement to establish a world
organization which would advance the interests of workers
through collective bargaining and social legislation. Samuel
Gompers, President of the American Federation of Labor, was
Chairman of the Commission which drafted the ILO constitution
at the Paris Peace Conference. The first meeting of the
International Labor Conference took place in Washington, that
same year. In 1934 the United States joined the ILO, the
first and only of the League of Nations organizations which
it did join. The Declaration of Philadelphia in 1944 reaf-
firmed the Organization's fundamental principles and refor-
mulated its aims and objectives in order to guide its role
in the postwar period. Two Americans have served with
distinction as the Diractors-General; many Americans
have contributed to the work of the organization. Most
particularly. the ILO has been the object of: sustained
attention and support by three generations of represen-
tatives of American workers and American employers.
In recent years, support has given way to increasing
concern. I would emphasize that this concern has been
most intense on the part of precisely those groups which
would generally be regarded in the United States as the
most progressive and forward-looking in matters of social
policy. It has been precisely those groups most desirous
that the United States and other nations should move for-
ward in social matters which have been most concerned that
the ILO -- incredible as it may seem --- has been falling
back. With no pretense to comprehensiveness, I should like
to present four matters of fundamental concern.
1. The Erosion of Tribartite Representation
The ILO exists as an organization in which representa-
tives of workers, employers, and governments may come togethe
to further mutual interests. The constitution of the ILO is
predicated on the existence within member states of relativel
independent and reasonably self-defined and self-directed
worker and employer groups. The United States fully recog-
nizes that these assumptions, which may have been warranted
on the part of the western democracies which drafted the ILO
constitution in 1919, have not worked out everywhere in the
world; in truth only a minority of the nations of the world
today have anything resembling industrial democracy, just as
only a minority can lay claim to political democracy. The
United States recognizes that revising the practices and
arrangements of the ILO is not going to restore the world
of 1919 or of 1944. It would be intolerable for us to demand
that it do SO. On the other hand, it is equally intolerable
for other states to insist that as a condition of participati
in the ILO we should give up: our liberties simply because the
have another political system. We will not. Some accommo-
dation will have to be found, and some surely can be found.
But if none is, the United States will not submit passively
to what some, mistakenly, may suppose to be the march of
history. In particular, we cannot accept the workers' and
employers' groups in the ILO falling under the domination
of governments.
2. Selective Concern for Human Rights
The TLC Conference for some years now has shown an
appallingly selective concern in the application of the
TOO's basic conventions on freedom of association and
forced later. It pursues the violation of human rights
in some member states. It grants immunity from such
citations to others. This seriously undermines the
credibility of the ILO's support of freedom of associa-
tion, which is central to its tripartite structure, and
strengthens the proposition that these human rights are
not universally applicable, but-rather are subject to
different interpretations for states with different polit-
ical systems.
3. Disregard of Due Process
The ILO once had an enviable record of objectivity
and concern for due process in its examination of alleged
violations of basic human rights by its member states.
The Constitution of the ILO provides for procedures to
handle representations and complaints that a member state
is not observing a convention which it has ratified. Fur-
ther, it was the ILO which first established fact-finding
and conciliation machinery to respond to allegations of
violations of trade union rights. In recent years, how-
ever, sessions of the ILO Conference increasingly have
adopted resolutions condemning particular member states
which happen to be the political target of the moment, in
utter sregard of the established procedures and machinery.
This trend is accelerating, and it is gravely damaging the
ILO and its capacity to pursue its objectives in the human
rights fields.
4. The Increasing Politicization of the Organization
In recent years the ILO has become increasingly and
excessively involved in political issues which are quite
beyond the competence and mandate of the Organization. The
ILO does have a legitimate and necessary interest in certain
issues with political ramifications. It has major responsi-
bility, for example, for international action to promote
and protect fundamental human rights, particularly in respect
of freedom of association, trade union rights and the aboliti
of forced labor. But international politics is not the main
business of the ILO. Questions involving relations between
states and proclamations of economic principles should be lef
to the United Nations and other international agencies where
their consideration is more relevant to those organizations'
responsibilities. Irralevant political issues divert the
attention of the ILO from improving the conditions of workers
that is, from questions on which the tripartite structure of
the ILO gives the Organization a unique advantage over the
other, purely governmental, organizations of the UN family.
In sum, the ILO which this nation has so strongly sup-
ported appears to be turning away from its basic aims and
objectives and increasingly to be used for purposes which
serve the interests of neither the workers for which the
organization was established nor nations which are committed
to free trade unions and an open political process.
The International Labor Office and the member states of
the Organization have for years been aware that these trends
have reduced support in the United States for the ILO. It
is possible, however, that the bases and depth of concern in
the United States have not been adequately understood or
eciated.
I hope that this letter will contribute to a fuller
appreciation of the current attitude of the United States
toward the ILO. In due course the United States will be
obliged to consider whether or not it wishes to carry out
the intention stated in this letter and to withdraw from
the ILO. During the next two years the United States, for
its part, will work constructively within the ILO to help
the Organization return to its basic principles and to a
fuller achievement of its fundamental objectives.
To this end, the President is establishing a Cabinet-
level Committee to consider how this goal may be achieved.
The Committee will of course consult with worker and employer
r presentatives, as has been our practice for some four
decades now in the formulation of our ILO policy. The Com-
mittee will also enter into the closest consultations with
the Congress, to the end that a unified and purposeful
American position should emerge.
Respectfully,
Henry A. Kissinger
Interdepartmental Workers' Compensation Task Force
Background:
Section 27 (a) of the Occupational Safety and Health Act of
1970 mandated the establishment of a Commission to evaluate
the State workers' compensation laws to determine if they
provide an adequate, prompt and equitable system of
compensation. The Commission (known as the Burton Commission)
released its report in July 1972. The report enumerated a
number of recommendations, including 19 referred to as the
"Nineteen Essential Recommendations," and recommended that
the compliance of the States with the "Nineteen Essentials"
be evaluated on July 1, 1975, and that the U.S. Congress
legislate compliance at that time if the States had not
acted. On May 13, 1974, following the introduction of bills
in the Congress which would federalize workers' compensation
an Administration White Paper was released. The White Paper
called for the establishment of a Federal Task Force which
would conduct further research in Workers' Compensation and
provide technical assistance to the states. The Task Force
was established with Policy representation from the Department
of Commerce, Labor, HEW, HUD, as well as OMB and the Council
of Economic Advisers.
Task Force Program
The Task Force is conducting programs of technical assistance
and research. The technical assistance group has been
engaged at the state level in evaluating the progress of the
states in meeting the "Nineteen Essentials" and in educating
state legislators and employer groups on the need for improve-
ments in the workers' compensation systems.
The research group has contracted for surveys of practices and
analytic reports. The projected outputs of the Task Force
effort are the publication of three reports.
A Technical Assistance Report
A Research Report
A Policy Overview Report with Recommendations.
Pending Issues and Commerce Role
Development of any usable data base - DOC is working
with DOL to collect all of the data tapes and put
them in the NIH computer system where they can be
accessed, evaluated and used in the analysis of
policy options.
- 2 -
Assessment of the Interrelationships among workers'
compensation, OSHA and products liability. Potential
recommendations for both workers' compensation and
products liability could have significant impact on
the other system. Any such recommendations should be
analyzed for their impacts on the other system; e.g.
significant increases in workers' compensation benefit
levels is frequently suggested as a solution to
product liability problems. DOC is attempting to
examine all remedies for both Task Forces in light of
ability to solve immediate problems and their impact
on the other system.
Schedule for Reports
Significant delays have been experienced by the Task Force.
The current target date for the completion of the final reports
is December 15, 1976. In view of the fact that most of the
final contractor reports have not yet been received by the
Task Force and that only limited staff support is available
to complete the analysis and report production, it is unlikely
that the December 15 date will be met for the Research Report.
Formulation of any policy recommendations logically will follow
this report.
BUSINESS-CONSUMER RELATIONS
Background
The term "business-consumer relations" implicitly acknowledges
that the marketplace involves both a buyer and a seller. The
Department of Commerce, which has the responsibility of promoting
the development of U.S. commerce and industry, recognizes that
both business and consumers must benefit if a transaction is to
contribute to the nation's economic vitality.
In recent years the Department has, within the framework of.
business assistance, substantially stepped up its actions re-
lating to consumer welfare. The National Business Council for
Consumer Affairs, an advisory group of 115 business leaders
reporting to the Secretary of Commerce, was established by
Executive Order in 1971. The Council reviewed seven key consumer
issue areas to identify current and potential consumer problems
and recommend solutions. The Council's reports, endorsed and
distributed by the Secretary of Commerce during 1971-74, called
for positive, voluntary action by the business community to raise
the level of business responsibility to the consumer.
During 1975 and 1976 six regional Commerce business-consumer
relations seminars were held to focus on consumer issues and their
impact on daily business decisions. The seminars, coordinated by
the Office of the Ombudsman, stressed voluntary solutions to
consumer dissatisfaction and emphasized the benefits that business
can derive from assuming a leadership role in the consumer movement.
Issue
The business community is charged with bringing about sought-
after consumer benefits, whether this action is taken voluntarily
or is mandated by legislation or rules and regulations of the
Executive Branch and independent regulatory agencies. The effec-
tiveness of business efforts on behalf of consumers, voluntary or
otherwise, is dependent upon business awareness and understanding
of consumer problems and their implications. Thus, for business to
be completely effective in solving many such problems, some means
of communicating them to the entire business community must be
developed.
In like manner, the need exists for information that consumers
can use as a basis for their opinions on many consumer-related
economic issues. Trade-offs should be determined so the consumer
can weigh costs versus benefits.
The lines of communication between business and consumers,
however, are generally poor. The range of opinion on many consumer
issues, on the part of both business and consumers, also hinders
business-consumer rapport.
2
Issue Analysis
The Department of Commerce can serve as a catalyst for
business and consumers in bringing about identification and
adoption of objectives to enhance the buyer-seller relationship.
Toward this end, the former National Business Council for
Consumer Affairs developed business guidelines for dealing with
the concerns of consumer satisfaction, advertising practices,
fair credit procedures, essential product information, and
safe, warranted products that can be properly serviced.
A reestablished Council could aid the Department in
implementing the guidelines and reviewing emerging issues.
The Ombudsman Consumer Affairs and Business Relations Divisions
can facilitate joint business-consumer relations seminars.
The Department's Consumer Relations Council can coordinate the
development of pertinent data from analysts of the Bureau of
Domestic Commerce and other Department agencies.
In its catalyst role, the Department can act to help
accomplish the following objectives:
1) Establish a dialog with consumers, consumer advocates,
and business leaders.
2) Identify issues currently considered significant to
consumers, and anticipate those issues emerging as a result
of business-government decisions and economic developments.
3) Make both consumers and business privy to the issues
uncovered or identified by such action.
4) Conduct independent economic impact studies of the
consequences induced by the solutions.
5) Arbitrate with both sides SO that through trade-offs,
an optimum solution having maximum benefits to the consumer
ultimately becomes the Department position.
6) Make the position well known in business and consumer
circles and urge immediate voluntary business adoption. Make
position known to local governments as guidelines for supporting
local regulations.
7) Should the above action be proven ineffective for a
given issue after a reasonalbe period, propose enactment and
enforcement of the position by Federal legislation.
Schedule
Most elements for resolving this business-government relations
issue already are in place within the Department. Analysis of
the issue has been ongoing and a formal, documented analysis
and recommendation can be completed in the second quarter of
3
FY 1977. The program can be operational during the third
quarter of FY 1977.
Immediate attention in 1977 should be given to a proposed
Executive Order reestablishing the National Business Council
for Consumer Affairs. Building on existing functions, the
Department can work to assure full partnership of business
and consumers in achieving consumer satisfaction without
preempting long-term profitability.
Ferrous Scrap
Background
Ferrous scrap is an essential ingredient in the production of
iron and steel products. It is used in mixtures with hot metal
(pig iron) by both integrated and non-integrated companies.
The latter, many of which are small and operate electric furnaces,
are particularly dependent on scrap as a raw material. Scrap
prices are quite volatile and can seriously affect the profit-
ability of electric furnace companies. Exports constitute a
substantial portion of the scrap market, accounting for from
15 to over 20 percent of the total scrap entering the marketplace
in recent years. A number of foreign countries are significantly
dependent upon U.S. supplies for sufficient scrap to operate
their iron and steel industries.
The supply of purchased ferrous scrap, which excludes run-
around scrap re-melted by the generator, can be only partially
predicted. The supply of prompt industrial scrap which is
derived from manufacturing operations by iron and steel product
consumers, such as automobile plants is directly related to the
level of those operations. However, the supply of obsolete
scrap, which arises from discarded end-products, the demolition
of structures, etc., is highly uncertain.
Issue
The Export Administration Act, which is currently extended by
Presidential executive order pending passage of legislation by
the 95th Congress, provides for short supply export controls
under certain inflationary or supply situations resulting from
exports, as well as for the monitoring of exports and related
information when conditions warrant such action. Although the
current state of the economy and of the iron and steel industry
do not justify the imposition of controls or monitoring, the
expected recovery in 1977 could result in the need for formal
monitoring, if not actual limitations on exports.
Analysis of Issue
The decision as to whether to impose short supply quantitative
controls or monitoring will depend upon developments in domestic
and foreign markets for ferrous scrap. Raw steel production in
1977 is expected to increase by about 15 percent over 1976 and
to be approximately as high as the all-time peak output, which
occurred in 1973. This rise, plus a recovery of steel production
in foreign scrap markets, will result in what could be unprece-
dented demands for ferrous scrap in 1977. Inventories in the
hands of consumers are at unusually high levels, both absolutely
and in terms of consumption rates. Information on stocks at
processing plants is not available. The extent to which the
total demand, as measured against supply, will affect the adequacy
2
of supply and result in price increases, will determine
Government actions under the statutes.
The scrap processing/exporting industry and the scrap consuming
industries (steel mills and foundries) take opposite positions
on the question of export controls and monitoring. The
processing/exporting industry maintains that adequate supplies
of obsolete scrap and of capacity to process such supplies now
exist and that the flow of scrap to consumers will take place
at reasonable prices. Conversely, the consuming industries
maintain that the supply of obsolete scrap is finite, in terms
of its arisings in a particular period, unless prices rise to
inordinately high levels to draw the scrap out. The scrap
processing/exporting industry therefore holds that no form of
export controls, or monitoring, is ever justified; while the
consuming industries maintain that under conditions of high
demand, export controls may be necessary in order to provide
adequate supplies, at reasonable prices, to domestic users, and
that monitoring may be justified as a minimum, in order to
provide the information needed to carry out the Department's
responsibilities in this area.
Similar conditions of rising prices and increasing exports in
the latter part of 1972 and early 1973 led first to a reporting
system on export orders beginning in May 1973, and subsequently,
beginning in July 1973, to quantitative export controls. For
the last 6 months of that year exports were limited to those
orders which had been placed prior to July 1. For all of 1974
exports were controlled on a quarterly quota basis, and were
discontinued after December 31, as conditions improved.
Schedule
The subject of export controls/monitoring is a continuing one.
It will require constant review and analysis as current and
prospective conditions change, looking forward at least 12 months
at all times. Recommendations about policy actions would be
forthcoming as warranted, subject to approval by the Steering
Committee, which reviews such matters as required.
Appendix
Attached are a table and two charts setting forth pertinent
information relative to this issue. Additional information
of this type would be provided as part of the analysis as
called for, from time to time.
Ferrous Scrap and Rela ed Statistics, 1971-1975
(Million Short Tons)
Steel Mills
Ferrous Foundries
Home
Home
Raw Steel
Scrap
Scrap
Net
Scrap
Scrap
Net
Year
Production Consumption Produced Receipts Shipments Consumption Produced Receipts Expor
1971
120.4
63.7
42.6
21.8
16.3
17.9
6.6
11.0
6.
1972
133.2
73.4
44.4
28.5
17.9
20.0
6.8
13.1
7.
1973
150.8
82.5
50.4
30.9
20.0
21.1
7.4
13.8
11.
1974
145.7
81.1
47.1
34.6
18.7
24.4
8.2
13.2
8.
1975
116.6
62.8
39.9
23.6
15.1
19.5
6.4
13.3
9.
7 mos. 1976
77.6
41.3
25.9
16.3
10.0
12.7
3.8
8.9
4.
Source: American Iron and Steel Institute, Bureau of the Census, and Bureau of Mines.
(
$ Per
Ferrous Scrap: Composite Price No. 1 Heavy Melting - Pittsburgh, Chicago, Philadelphia
Gross
n
Average Annual 1963-72; Monthly Averac
1973-1976
From American Metal Market
$170
150
Record Daily High
April 4, 1974
130
110
90
70
ARALBO
LIBRARY
30
Average Annual
1973
1974
1975
1976
1963-72
9776
1975
1974
EL6T
1972
1971
1970
0$
1.2
SIS
8T
ABRARY
2.4
OHOA
$24
07V839
9E$
3.0
SCRAP PRICE:
S48
9'E
09$
4.2
$72
4.8
DOLLARS PER GROSS TON
$84
5.4
MILLIONS NET TONS
96$
0:9
8018
9'9
S120
7.2
IIIA
891$
DOTTED LINE: SCRAP PRI
SOLID LINE: TOTAL PURCHASED SCRAP (INCLUDES EXPORTS)
IMPLEMENTATION OF GATT ARRANGEMENT REGARDING
INTERNATIONAL TRADE IN TEXTILES
BACKGROUND
The U.S. textile and apparel industry consists of
30,000 plants and 2.3 million workers, or one out of
every nine in manufacturing. In addition, 500,000
cotton farmers, 150,000 wool growers and 105,000 man-
made fiber workers also depend on a healthy domestic
industry. A high proportion of the industry's workers
are semi-skilled, minority group members, less educated
and older than the average worker. Textile and apparel
workers often are women heads-of-household, and reside
in areas without ready alternative employment.
Sharply rising imports from low-wage countries frequently
have had a disruptive impact on the domestic market.
Between 1962 and 1972 imports of cotton, wool and man-
made fiber textiles and apparel rose 312% to 6.3 billion
sye. In 1973, the U.S. joined with 50 other major textile
trading nations to negotiate under GATT the multifiber
Arrangement Regarding International Trade in Textiles,
known as the MFA.
ISSUE
Vigorous and effective implementation of the MFA.
ANALYSIS OF ISSUE
Under Article 4 of the MFA the United States has negotiated
bilateral textile and apparel restraint agreements with
18 exporting countries. Under Article 3, the United States
can unilaterally restrain textile and apparel imports that
threaten disruption to the domestic market in accordance
with MFA criteria.
Decisions on the negotiation of new agreements or the
taking of unilateral import restraints are made by agree-
ment of officials in the Departments of Commerce, State,
Treasury, Labor and the Office of the Special Trade Repre-
sentative (STR). The Under Secretaries of these agencies
and the Executive Director of the Council of International
-2-
Economic Policy (CIEP), under the Chairmanship of the
President's Special Trade Representative, comprise the
Textile Trade Policy Group (TTPG), which was established
by Presidential memorandum.
Textile policy decisions are normally reached by consensus
of the operating level officials. Occasionally issues
are raised to the TTPG level for review or resolution.
The interagency Committee for the Implementation of
Textile Agreements (CITA) was established by Executive
Order 11651 to implement the MFA and agreements under it
pursuant to the TTPG's general instructions. CITA is
chaired by the Deputy Assistant Secretary for Resources
and Trade Assistance and is administered by the Office of
Textiles. The Committee's members represent the Depart-
ments of State, Labor, Treasury and STR. Under the Chair-
manship of the Chief Textile Negotiator of STR, CITA
members comprise U.S. textile delegations to bilateral
and multilateral negotiations.
On behalf of CITA, the Office of Textiles monitors imports
from all textile trading countries to insure that bilateral
agreement restraint levels are not exceeded and to identify
potential sources of disruption not restrained under a
bilateral agreement.
Based on the Office of Textiles monitoring of the domestic
market and the impact of imports, CITA may recommend to
the TTPG Article 3 unilateral import restraints or the-
negotiation of new agreements.
CITA is authorized to direct the Commissioner of Customs
to deny entry into the United States of shipments that
would exceed the levels of bilateral agreements or uni-
lateral import restraints.
SCHEDULE
This is an ongoing activity.
PRC TEXTILE TRENDS
BACKGROUND
In CY 1975, the PRC became the second largest supplier of
cotton textile and apparel products to the United States,
shipping 140 million square yard equivalents (sye). This
volume compares to 84 million sye for CY 1974. This 169
percent rise was in major part achieved in the last four
months of 1975 when the PRC shipped 103 million sye VS. 36
million sye for the first eight months.
This sudden rise of shipments became the source of much
concern to Government officials responsible for the textile
program and the textile industry. Since the PRC is not a
signatory to the MFA and is the only major U.S. textile
supplier with which the United States does not have a bilateral
textile restraint agreement, much of the concern arose from
the unique uncontrolled status of PRC textile exports. Un-
restrained imports of this magnitude conflict with U.S. equity
obligations to our trading partners who are restraining their
exports pursuant to bilateral agreements.
ISSUE
The uncontrolled status of PRC textile exports to the United
States.
ANALYSIS OF ISSUE
Because this issue is but one element of the very sensitive
and complex relationship between the United States and the
Peoples Republic of China, the United States has been pursuing
a strategy to bring the problem under control outside the MFA
framework. This strategy thus far has taken the form of formal
and informal communications to PRC officials in Washington and
Peking, voicing the U.S. Government's concern over the effect
these imports have on a very sensitive U.S. industry. These
communications include Secretary Richardson's discussion of
the problem with Ambassador Huang (Chief of the PRC Liaison
Office in Washington) on July 26, 1976, here at the Department
during the Ambassador's courtesy visit.
2
The PRC responses to these communications usually make the
following points: (1) the United States enjoys a favorable
trade balance with the PRC, (2) PRC textile exports are
very small in comparison to total U.S. textile imports and
U.S. textile consumption, and (3) most importantly, the PRC
is not willing to enter into any further normalization of
trading relationships until progress is made in the normal-
ization of political relationships. (Issue papers prepared
by the Bureau of East-West Trade discuss more fully the
overall U.S./PRC trade issue.)
From December of 1975 to the present, monthly PRC imports
have fallen off by 59 percent on an average monthly basis.
This drop has reduced some of the immediate concern of this
past spring, however, the issue still remains. The reason
for this drop is not at all evident. Three reasons have
usually served as the basis for conjecture: (1) the earth-
quakes of last spring and summer in the industrial regions,
(2) the rise in cotton prices over the last nine months, and
(3) the political activity surrounding the death of key
political leaders.
SCHEDULE
We will continue to monitor textile and apparel imports from
the PRC. Should imports again begin to rise, we will be in
a position to consider appropriate action.
RENEWAL OF THE MULTIFIBER ARRANGEMENT
REGARDING INTERNATIONAL TRADE IN TEXTILES (MFA)
BACKGROUND
Sharply rising textile and apparel imports have often caused
disruption to the domestic textile and apparel market and
have adversely affected the U.S. industry and its 2.3 million
workers. To bring order as well as growth to world textile
and apparel trade, the United States led in the negotiation
of the GATT multifiber Arrangement Regarding International
Trade in Textiles, known as the MFA. The MFA, which has
been signed by 38 nations, is scheduled to expire at the end
of 1977.
ISSUE
Administration support for the continuation of the MFA.
ANALYSIS OF ISSUE
The United States seeks early action toward renewal of the
MFA without change. During the next five years, there will
be continued threat of disruption to textile markets of
importing countries from low-wage developing countries. The
United States further believes that restraint measures
administered within an internationally sanctioned framework
which takes account of the special features of international
textile trade are preferable to unilateral measures by
importing countries. Such a framework can better reflect the
interests of exporting countries and would inhibit importing
countries from taking unjustified protectionist actions.
The MFA has provided significant liberalization in world
textile trade despite the economic downturn. While the MFA
is not perfect, it does represent a balance of interests
painstakingly negotiated between importing and exporting
countries.
The MFA should be renewed without modification. Efforts to
modify the MFA during renegotiation would not be constructive
since the conflicting positions of importing and exporting
countries would be difficult if not impossible to reconcile,
jeopardizing renewal.
2
The European Community officially has not made a decision
on whether to seek MFA renewal. However, the Community has
indicated it will seek renewal with significant modifications
that will be vehemently opposed by the exporting countries.
While a considerable diversity of opinion exists among
exporting countries, at least publicly, most support the
Group of 77's opposition to continued export restraints on
textiles. Leading textile exporting countries have stated
that any future international arrangement on textiles should
include changes favorable to them.
SCHEDULE
The United States interest in early progress toward renewal
of the MFA is motivated principally by its desire to prevent
uncertainty among textile trading nations and textile traders.
In addition, early renewal would also prevent textile trade
issues from holding back progress in the Multilateral Trade
Negotiations. In the United States and many other importing
countries, assurance regarding the availability of future
protection for domestic textile markets would improve the
political environment for action respecting the MTN.
The Textile Committee, the plenary organization of all MFA
signatories, is meeting in Geneva November 29 to December 10.
At that meeting; the MFA's operation will be reviewed and
renewal considered. While we hope, at that time, to reach
agreement on simple renewal without modification, agreement
may not be reached in December, and additional meetings
during 1977 may be necessary.
Import Problem
NONRUBBER FOOTWEAR
Background:
For the past decade, imports have been a serious problem for the
U.S. nonrubber footwear manufacturing industry. As imports
increased, domestic production, shipments, and employment declined.
A series of investigations and studies were undertaken between
1968 and 1971, and in August 1975 the footwear industry and its two
major craft unions petitioned the U.S. International Trade Commission
(USITC) for relief from serious import injury under the liberalized
criteria of the Trade Act of 1974. The Commission, on February 20,
1976, unanimously found injury as a result of imports, but was
divided in its recommendation to the President as to the remedy, ie.
higher import duties, tariff rate quotas, or only adjustment
assistance to injured firms, workers and communities. The split
recommendation on the remedy precluded the possibility of a
Congressional override, otherwise provided in the Trade Act, of
any specific action the President would take. The President, on
April 16, announced that he had ruled out any form of import re-
straint as a remedy. Instead, he directed the Secretaries of
Commerce and Labor to provide expedited consideration to any petitions
for adjustment assistance by footwear firms or their workers. He
also directed that the levels of U.S. imports, production, and
employment be monitored, and that reports be provided to the White
House on significant changes as they occurred, with appropriate
recommendations.
Meanwhile, the Senate Committee on Finance passed a resolution, ex-
pressing the sense of the Committee "that changed circumstances,
including increasing imports and rapidly deteriorating economic
conditions in the domestic footwear industry constitute good cause"
to institute a new investigation. On September 22, pursuant to that
resolution, the USITC opened a new investigation.
Issue:
The President will face another decision on whether or not to take
action to restrict imports of footwear. Retailers, importers and
consumer groups vigorously oppose such restrictions, while manu-
facturers and labor unions seek relief to enable the domestic
industry to meet import competition.
Analysis of the Issue
Imports since the mid-1960s have increased their share of the U.S.
market, while domestic production has been shrinking. In the women's
2.
line, more shoes are imported than are made domestically. The
overall import share of the market is approaching 50 percent. As
each footwear import investigation is concluded without action
by the Administration, more small and medium firms are encouraged
to leave the business, adding to unemployment of shoe workers.
The larger manufacturing firms are discouraged from investing in
domestic production capacity and have expanded their import operations,
leading to greater concentration of market power. Consumers may
not have benefitted from these developments as shoe prices have
been rising steadily.
On the other hand, our international trade relations could be
adversely affected inasmuch as the imports now exceed $1 billion
annually, supplied by some 50-60 countries. Many of these are
developing countries that need to earn foreign exchange. Unless
some cooperative international approach can be worked out, U.S.
action to restrict shoe imports could result in massive claims for
compensatory trade concessions on other products exported by the
supplying countries or could lead to retaliation against U.S. exports.
Consumer groups maintain that shoe prices will be even higher if
import competition is curtailed.
Schedule:
The USITC is seeking to complete its investigation by December 28,
1976. If the Commission's finding is affirmative, the President
will have 60 days, or until March 1, 1977, to determine the method
and amount of import relief he will provide, or report to the
Congress why the national economic interest of the United States
precludes the granting of relief. Also, he would have to indicate
what other steps he is taking beyond adjustment assistance programs
immediately available to the industry to help it overcome serious
injury and to help its workers to find employment.
Import Problem
STEEL
Background:
Steel imports (valued at $4.1 billion in 1975) have constituted
an important trade issue since the mid 1960's when imports began
to increase sharply, stimulated by an appreciable price advantage
and by the hedge-buying of steel consumers in anticipation of
possible steel strikes, which accompanied the negotiation of new
labor contracts at successive three-year intervals. Concern over
this import impact led to the negotiation of a Voluntary Restraint
Arrangement (VRA) on steel exports to the United States with the
steel producers of Japan and the European Community, in effect from
1969 to 1974. Termination of the VRA occurred at a time when
steel was in short supply and prices were rising.
Similar to the U.S. steel industry, the industry in the European
Community has encountered substantial import problems. In November
1975, as a result of industry demands for controls on the quantities
and prices of steel sold in the Common Market, the EC requested an
ad hoc meeting on steel within the OECD. An informal understanding
between Japanese steel producers and the EC to limit shipments to
the Community has been in effect during 1976. The U.S. industry
contends that this arrangement has caused a diversion of trade to
the United States.
In addition to seeking some assurance against disruptive or injurious
imports through a general safeguard mechanism in the multilateral
trade negotiations or a special orderly marketing arrangement,
the U.S. steel industry or some industry segments have filed
complaints under existing statutes concerning the impact of imports
on the domestic industry stemming from alleged unfair trade practices.
(See Appendix)
In March 1976, the President directed his Special Representative
for Trade Negotiations to negotiate on a sectoral basis solutions
to the problems of cyclical distortions in steel trade, while
liberalizing the conditions of this trade.
Issue:
To deal with complaints by the American steel industry regarding
trade practices by foreign countries and import-caused market
disruption, the U.S. Government needs to find some means for a
cooperative international solution.
2.
Analysis of Issue:
Alleviation of cyclical distortions in world trade is to be sought
by way of a steel sector approach in the multilateral trade
negotiations under the GATT, as directed by the President.
The domestic industry has cited strong foreign government support,
even involvement and outright ownership of steel industries as
placing U.S. industry at a substantial competitive disadvantage.
Also, public ownership or planning guidance abroad produce responses
to declining demand quite different from usual private industry
decisions. In the United States when demand declines, production
is cut and workers are laid off, whereas in foreign countries output
and employment are maintained and production is often channeled
into the U.S. market.
Since the VRA expired, the American steel industry has had no
mechanism to assure against market disruption by imports, particularly
during downward swings in the business cycle. Rather than seeking
renewal of the former VRA, the U.S. industry is seeking a long-
term solution moving toward duty-free trade, while providing some
internationally acceptable safeguard mechanism specifically
applicable to steel trade problems.
Schedule:
Public hearings are scheduled for December 9 before the Steel 301
Committee chaired by the Office of the Special Representative for
Trade Negotiations. (There is no statutory time limitation for
completion of the Section 301 investigation) In addition, bilateral
consultations with Government officials in Japan and the European
Community are scheduled for early December.
With the announced objective to complete multilateral trade
negotiations by the end of 1977, great effort and creativity will
be needed to develop a sectoral resolution of the steel trade problem.
Appendix
Pending Steel Import Complaints
1.
On October 6, 1976, the American Iron and Steel Institute (AISI)
filed with the Office of the Special Representative for Trade
Negotiations a complaint under Section 301 of the Trade Act
alleging unfair trade practices resulting from the EC-Japan
bilateral understanding. The complaint alleges that the
understanding burdens or restricts U.S. commerce by diverting
significant amounts of Japanese steel to the U.S. market.
2. There is pending before the U.S. International Trade Commission
a complaint by domestic producers of welded stainless steel
pipe under section 337 of the Tariff Act of 1930, alleging
predatory pricing practices by the Japanese in the sale of this
item to the U.S.
3. There is pending before the Department of the Treasury a com-
plaint by a domestic manufacturer alleging Italian Government
subsidies received by an Italian producer have resulted in
very-low-priced exports of silicon electrical steel to the U.S.
market.
The U.S. Steel Corporation has filed an action with the U.S.
Customs Court, contesting a determination of the Secretary of the
Treasury not to impose countervailing duties on steel products
imported from some members of the EC. The company has alleged
that the remission by seven European nations of the Value
Added Tax (VAT) on exports of steel mill products to the
United States constitutesa bounty or grant under U.S. law and,
therefore, should subject such shipments to countervailing duty.
Import Problem
SPECIALTY STEEL
Background:
The specialty steel segment of the steel industry (producers of
stainless and tool steels) and the United Steelworkers of America,
on July 16, 1975, filed an escape clause petition with the Inter-
national Trade Commission (ITC) seeking import relief pursuant to
section 201 of the Trade Act of 1974. On January 16, 1976, the
ITC determined serious injury from increased imports and recommended
to the President imposition of mandatory import quotas for a five-
year period. The President, on March 16, directed the Special
Trade Representative to seek to negotiate orderly marketing agree-
ments (OMA's) with principal supplying countries within 90 days.
Commerce/BRTA participated in negotiations with Japan and con-
sultations with Sweden and the EC. On June 11, by Proclamation
4445, the President announced that an OMA had been negotiated
with Japan and that import quotas were being imposed on shipments from
other countries effective June 14 for a period not to exceed three
years.
Import restraints are based essentially on average actual imports
during 1971-75 and permit annual growth at a rate of 3 percent.
Separate ceilings apply to stainless sheet and strip, plate, bar,
and rods, and alloy tool steel, with specific allocations to
Japan, the European Community countries, Sweden, Canada, and a
basket of other countries. Annual imports amount to some $200
million.
Issue:
While the import restraint program is in effect, pressures are
expected to be maintained by domestic producers seeking its
retention and by foreign suppliers seeking its termination. (Related
issues also arise concerning administration of the program--countries
seeking individual quotas rather than inclusion in a "basket" group-
ing, product coverage, reallocation of quota shortfalls, statistical
and classification problems, etc.)
Analysis of Issue:
The import restraint program may be relaxed or terminated before
the end of the three-year period if the industry's production and
employment improve. Under the Trade Act, modification or early
2.
termination of existing restraint levels would require a determi-
nation by the President that such action, after taking into account
the advice of the USITC and the Secretaries of Commerce and Labor,
was in the national interest. Thus far, recovery of the specialty
steel sector has been spotty. Compared with last year's depressed
levels, in the first nine months of 1976 domestic shipments of
stainless steel sheet and strip increased considerably, but re-
mained lower than in the comparable period of 1974. Stainless steel
bar and rod shipments increased, but also remained lower than in
1974. Stainless steel plate and alloy tool steel shipments, however,
continued to decline. The EC, Japan, Sweden, and the other supplying
countries have charged that imposition of the quotas is unjustified
and have reserved their rights under the GATT to retaliate against
U.S. exports or to seek compensatory trade concessions on other
products they export to the U.S.
Several half-year quotas were filled fairly early in the program
(e.g. sheet and strip and alloy tool steel from "other countries,"
plate, rod and alloy tool steel from the EC, bar from Sweden). The
second half-year quotas will open on December 14.
Schedule:
Under an interagency monitoring system, domestic shipment and
import data are reviewed quarterly. The second set of quarterly
data were released by Commerce on November 22; data for succeeding
periods will be released every three months while the program is
in effect. Prices and employment also are monitored on a quarterly
basis. No time limits are specified in the Trade Act when the
President seeks advice from the USITC and the Secretaries of
Commerce and Labor regarding the probable economic effect of relax-
ing or terminating the quotas. However, a reasonable amount of
time would be needed for the USITC to conduct public hearings
and the review process probably would take several months. Unless
sooner terminated, the import restraint program is scheduled to
expire in June 1979.
Import Problem
CONSUMER ELECTRONIC PRODUCTS
Background:
In the face of import competition, annual U.S. factory shipments
of consumer electronic products declined from $3.4 billion in 1966
to $2.8 billion in 1975. During the same period, U.S. imports of
consumer electronic audio and video products increased from $390
million to $1.5 billion. By value, 1975 imports represented 37 per-
cent of U.S. apparent consumption. By unit count, imports as a
percentage of U.S. consumption exceeded 95 percent in radios and
tape recorders/players; 65 percent in auto radios; 63 percent in
monochrome TV's and 18 percent in color sets.
In 1976, the color TV industry, the only remaining major sector
of domestically produced consumer electronics, came under severe
import pressure. During the first nine months of the year, color
set imports totaled 1.9 million sets, a 154 percent increase over
the 766 thousand sets received during a comparable period of 1975.
By unit count, imports as a percentage of apparent consumption,
which increased from 4 percent in 1966 to 18 percent in 1975, will
probably exceed 30 percent in 1976.
Total employment in the consumer electronics industry dropped
from 117 thousand workers in 1966 to an estimated 71 thousand in
1975.
Between April 4, 1973, and September 30, 1976, the Department of
Labor certified 14,979 workers (30 petitions) in the consumer
electronic product and related electronic parts industries as
eligible to apply for adjustment assistance. As of September 30,
decisions as to certification in 13 cases involving 2,162 workers
were still pending.
Several investigations by the U.S. International Trade Commission
currently are in progress (See appendix).
Issues:
The President may have to decide whether or not restrictions should
be placed on U.S. imports of television receivers if the USITC
finds that increased imports are the substantial cause of serious
injury to the industry. In case of a finding of unfair import
competition, the President may have to decide whether such imports
should be excluded from entering the United States.
2.
Analysis of Issues:
The issues surrounding the high volume of consumer electronics
imports are complex. One element involves the establishment of
labor-intensive offshore operations by U.S. multinational corporations
In some cases, multinationals have gone offshore to maximize
profits by utilization of cheaper labor, but in other cases, offshore
operations were established in order to remain price-competitive
with foreign production.
Other factors involved are the financial aids, tax incentives, etc.
offered by government abroad to some major suppliers as a means
of attracting foreign investment for the local export-oriented
consumer electronic industries.
In addition, some strong foreign companies (mainly Japanese) have
invested in production facilities in the United States which result
in employment to Americans and tax payments to the federal and
local governments. At the same time, however, some U.S. companies
contend that Japanese producers are seeking to overtake and monopolize
the U.S. market through cartel-like activities.
Few companies in the industry have joined with organized labor in
petitioning for import relief. Most companies import finished pro-
ducts and/or components and seek to keep their options open. Many
U.S. manufacturers of TV components and parts have had to curtail
domestic production and/or transfer production overseas to continue
selling to the TV manufacturers.
Marketing practices also are a factor since private-label distributors
(Sears, Penneys, etc.) have maintained that U.S. TV makers are
unwilling to produce sets to their specifications.
Consumers, in the meantime, have benefitted from the competition among
domestic producers as well as from imports.
Schedule:
The USITC is required to complete its section 337 unfair trade
practice investigation of color TV receiver imports from Japan within
18 months, or by October 1, 1977. There is a six-month deadline,
or March 22, 1977, for the section 201 escape clause injury investi-
gation. In the event the Commission finds injury, the President
must act on any USITC import relief recommendation within 60 days, or
by May 21, 1977.
Appendix
Summary of Pending Import Investigations
Based on a petition by GTE Sylvania, Inc. and Philco Consumer
Corporation, the ITC announced on April 1, 1976, the opening of an
investigation of alleged unfair import practices in the importation
of certain color TV receivers from Japan. The legal basis for the
investigation is section 337 of the Tariff Act of 1930, as amended
in section 341 of the Trade Act of 1974. The petitioners allege
"the existence of predatory pricing schemes resulting in below-
cost and unreasonable low-cost pricing of such (Japanese) television
sets in the United States" and "economic benefits and incentives
from the Government of Japan contributing to the below-cost and un-
reasonably low-cost pricing in the United States." Upon application
of respondents to terminate the proceedings and dismiss the complaint,
and after consideration of a challenge to its jurisdiction in the
case, including objections presented by Treasury, Justice, State,
and STR, the Commission not only decided to proceed, but announced
extension of the deadline until October 1, 1977, allowing 18 months
for the investigation in recognition of its complicated nature.
In addition, on its own motion, the ITC announced on April 8
that it will conduct a preliminary investigation of virtually every
type of unfair import competition action ever alleged against
Japanese TV producers, including both color and monochrome sets.
The ITC said that the new inquiry, under section 603 of the Trade
Act, which gives it broad investigative powers, will cover 14 areas
of concern and, unlike the Sylvania section 337 complaint which
accused five Japanese companies of improper acts, will encompass
the entire Japanese TV industry.
Based on a petition by 11 labor unions and 5 industrial concerns
seeking relief from color TV imports, the ITC instituted, on
October 21, 1976, an escape clause investigation under section 201 (b)
of the Trade Act of 1974. The Commission on its own motion decided
to add other products to the color TV's originally specified in the
petition. The agency's notice of investigation said it would
cover "television receivers, both color and monochrome, assembled
or not assembled, finished or not finished, and subassemblies
thereof. If
Pending before the U.S. Customs Court at this time is an appeal
by Zenith Radio Corporation of a negative Treasury determination made
in January of 1976 on a complaint alleging that the Japanese Government
was bestowing bounties and grants upon certain consumer electronic
products in violation of the Countervailing Duty Act (19 U.S.C.,
section 1303) . That complaint originally had been filed by
Zenith back in 1970.
NORMALIZATION OF TRADE RELATIONS
WITH THE PEOPLE'S REPUBLIC OF CHINA
BACKGROUND
U.S. policy towards the People's Republic of China (PRC) is
set forth in the Shanghai Communique of February 1972. The
Communique states that economic relations based on equality
and mutual benefit are in the interests of the peoples of
the two countries and that the progressive development of
trade should be facilitated. Sino-American trade grew to
nearly a billion dollars in 1974 on the strength of large
Chinese purchases of American agricultural commodities.
With the cessation of these purchases, however, trade has
declined and, in 1976 will be less than $400 million.
Although our trade continues and will likely increase, its
growth is inhibited by a number of unresolved but related
issues concerning blocked Chinese assets, nationalized
private U.S. property, nondiscriminatory (MFN) tariffs,
Eximbank financing, and U.S. controls over exports to the
PRC. (See Appendix for legislative authority concerning
Sino-American commercial relations).
ISSUES
The full normalization of our commercial relations with China,
at a minimum, calls for resolution of the linked question of
claims and assets, a Sino-American trade agreement, and
improved understanding where U.S. export controls are concerned.
Unresolved, the claims and assets question makes normal banking,
air, and maritime relations impossible and prevents the
exchange of trade exhibitions. Failure to conclude a trade
agreement (which presently would need to take into account
the provisions of the Trade Act of 1974 concerned with free
emigration, reunited families, market disruption, and protection
of industrial property rights) precludes extension by the
Unites States of nondiscriminatory (MFN) tariff status and
Eximbank financing to the PRC. Refusal by the Chinese to
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comply with certain of our export control requirements and
a possible Chinese misunderstanding of their intent, makes
it more difficult for the United States to treat exports
to China equally with those to the U.S.S.R. as called for
by existing policy.
ANALYSIS OF ISSUES
Clearly the unresolved issues and the absence of fully normal
commercial relations continue to inhibit Sino-American trade.
At the same time, because of the close interrelationship among
the issues, the high political input in Chinese economic
decision making, the paucity of data, and the fact that
China is a non-market economy, no reliable estimate has
been developed to indicate how much trade would increase
with the either total or piecemeal removal of these trade
barriers. In quantitative terms, the increase in trade
would likely be modest overall, although perhaps quite
significant in some commodity areas.
SCHEDULE
Since any resolution of the economic issues appears dependent
on U.S. political initiative, a decision to move ahead is
required from the President with the commencement of negotiations
aiming toward formally recognizing the PRC possibly beginning
in 1977.
It is increasingly apparent that the Chinese will not be
willing to discuss resolution of the economic issues outlined
above until the United States meets their three conditions
concerning Taiwan (remove troops, abrogate the defense treaty,
and break diplomatic relations). Since the United States
would most likely be doing this only in connection with the
diplomatic recognition of Peking, it follows that political
decisions, not economic ones, will determine any schedule.
(Should the Chinese agree to the piecemeal resolution of
the economic issues prior to recognition, the claims and
assets questions would have to be solved prior to entering
into a trade agreement.)
Appendix
Legislative Authority Relating to China's
Commercial Relationship with the U.S.
MFN Tariff Status, Eximbank Credits and a Trade Agreement
China, like the U.S.S.R. and most of the East European
countries is subject to the freedom of emigration provisions
of the Trade Act of 1974, applicable to, non-market economies
that are not presently accorded MFN status.
Blocked Chinese Assets
Under authority of the Foreign
Assets Control Regulations, Chinese dollar denominated
accounts and assets were blocked on December 17, 1950 and
now total about $80 million.
Fixed Private (U.S.) Claims
In 1966, Congress enacted
the China Claims Act authorizing establishment of a Foreign
Claims Settlement Commission to evaluate the claims of
American Nationals for losses due to Chinese nationalization
of property. Adjudicated claims total $197 million.
Export Controls
Under authority of the Export Administration
Act of 1969, as amended, China in February 1972 was placed
in "Category Y" and thus accorded the same treatment as the
U.S.S.R. and most of the East European countries.
THE TRADE ACT OF 1974 AND EAST-WEST TRADE
BACKGROUND
Section 402 of the Trade Act of 1974, the Jackson-Vanik Amendment
,
has precluded the Executive from extending MFN (non-discriminatory)
tariff treatment and U.S. Government credits, and from entering
into trade agreements with communist countries that deny their
citizens the right or opportunity to emigrate. In January 1975,
the Soviet Union and most of the East European countries rejected
the conditions of the Trade Act as constituting direct interference
in their internal affairs. Only Romania has agreed to provide the
United States assurances with respect to its emigration policies,
and, therefore, MFN and access to U.S. Government credits have
been extended to Romania, subject to annual review.
The Trade Act limitations have served to retard the development
of trade between the United States and the communist countries.
These restrictions unfortunately also have been ineffective in
achieving the freedom of emigration objectives of their Congres-
sional sponsors. Moreover, they were enacted in such a way as to
preclude separate improvements in commercial relations with the
individual countries of Eastern Europe, even though the principal
concerns of the legislative restrictions had been with the U.S.S.R.
The Administration consistently opposed the provision linking MFN
and credits to emigration, and had begun to consult with the Con-
gress in 1975 to determine whether changes in the legislation
might be possible. Soviet actions in Angola made pursuit of
such an initiative inappropriate. Consequently, progress toward
normalizing commercial relations with most of the affected countries
has been minimal and can be expected to remain SO as long as the
President does not have the authority to act on MFN and credit
extensions in the conduct of East-West trade policy.
ISSUE
Should the President attempt to bring about a change in the Trade
Act? Given good rapport with the Congress, the new Administration
would have a unique opportunity to achieve modification of the
Trade Act so that discretionary policy-making authority in the
East-West trade area could be returned to the Executive branch.
ANALYSIS OF ISSUE
The impact of the Trade Act on the growth of commercial relations
with the communist world, which represents about one-third of
the world's population, has been substantial. Already millions
of dollars worth of contracts that could have gone to U.S. firms
have been diverted to our West European and Japanese competitors,
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whose governments continue to provide billions of dollars in
official credits, much of it at below-market rates, to support
their exporters. These diverted contracts represent lost op-
portunities for U.S. economic interests in the way of potential
jobs, profits for American firms, and contributions to a
strengthened balance of payments position. In addition, the
U.S. consumer is being denied access to Soviet and East European
products. The failure to extend MFN and access to official credits
to the communist countries where warranted also represents a major
obstacle to the U.S. goal of normalizing bilateral political re-
lations. Prospects for future trade between the United States
and the East will depend to a large extent on how the legislative
issue is finally resolved. If no action is taken to modify the
current restrictions, trade with these countries may stagnate, or
possibly decline, and we will be deprived of a useful tool in
advancing the state of our political relations.
It is not possible at this time to know what the attitudes of the
new Congress will be toward removal of the legislative obstacles
to East-West trade. However, the new Administration should be in
a better position to address this sensitive issue, since the
President-elect has made clear his concern with the critical
human rights issue and has not been involved in the controversy
surroundingthe original legislation. Consequently, he has a
better opportunity to convince interested domestic groups--
particularly the American Jewish community--that he should be
allowed to exercise ultimate control over the conduct of East-
West trade policy, especially in light of the failure of the
Trade Act to achieve its emigration goals.
Of course, the overall state of U.S.-Soviet relations will be a
crucial factor in determining Congressional sentiment for or
against changes in the Trade Act. While an Administration
initiative to modify current legislation must take place in the
context of its active support for the principles of free emigration,
the President must make clear his intention to move cautiously at
a pace appropriate to progress in overall U.S.-Soviet relations.
Since a successful legislative initiative cannot take place
without bipartisan Congressional support, the Administration
should commit itself to extensive consultations with the Congress
in order to find a suitable basis for enacting changes in the
Trade Act.
APPROPRIATE ROLE OF THE
DEPARTMENT IN EAST-WEST POLICY
BACKGROUND
Since its inception in December 1972, the Bureau of
East-West Trade in the Department of Commerce has provided.
most of the staff support and expertise for the operational
implementation of the U.S. Government's policy in the
East-West trade area which has been to facilitate the
expansion and normalization of U.S. commercial relations
with the communist countries. Currently, the Bureau of
East-West Trade possesses the largest single concentration
of East-West trade expertise available in the Government.
This expertise is applied to a variety of primary functions
including:
Assisting U.S. firms in promoting and marketing
their products in communist countries;
Providing staff support for the intergovernment
Joint Commercial Commissions with the U.S.S.R.,
Poland and Romania (the latter two chaired by
the Secretary of Commerce) ; and
Preparing interagency economic policy studies.
In addition, the Department is a member of the Congressional-
Executive Commission on Security and Cooperation in Europe.
The Bureau of East-West Trade will be responsible for pro-
viding most of the staff support for the Commission's
activities in the area of East-West economic cooperation.
Finally, Commerce has traditionally been the lead agency in
the interagency export control mechanism, and is responsible
for operation of the basic U.S. strategic export control
program, the primary impact of which is on our trade with
communist countries.
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ISSUE
The substantial expertise in East-West trade located in the
Department should be used more fully and effectively in the
interagency and intergovernmental policy process. The new
Secretary might explore the possibility of obtaining the
lead role or at least a greater policy role for the
Department.
ANALYSIS OF ISSUE
Any discussion regarding an increased role for the Department
of Commerce must be considered in the overall context of
the interagency East-West trade policy-making process.
For the past two years, this process has been characterized
by bureaucratic rivalry and frequent absence of interagency
coordination. The presumed (though not officially designated)
mechanism for interagency coordination of policy has been
the East-West Foreign Trade Board. However, the Board,
which is chaired by the Secretary of the Treasury, lacks
the staff, expertise, and clear Executive mandate to play
an effective coordinative role in the policy process.
Consequently, State, reflecting the interests of a powerful
Secretary, has tended to dominate the process, often to the
exclusion of other interested agencies.
Commerce, despite its frequent exclusion from the policy
process by State and Treasury, has performed well in its
operational role; and, where given or having seized the
opportunity, has had a significant impact on policy.
Discussion of the possibility of increasing the Department's
policy role has focused on two principal means:
Returning the Chairmanship of the U.S.-Soviet
Joint Commercial Commission to Commerce, which
is the agency with primary responsibility for
the largest number of issues and therefore
provides most of the staff, regardless of who
holds the Chairmanship. (This would be con-
sistent with the Secretary of Commerce's chairing
the Polish and Romanian Commissions.)
Placing the Chairmanship of the East-West Foreign
Trade Board in the Commerce Department. Several
outside observers have made this recommendation,
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recognizing Commerce's predominant interest,
operational responsibility and expertise in
the area. (At the same time, of course, the
Chairmanship of the Board's Working Group
should be lodged in the Department, presumably
in the hands of the Deputy Assistant Secretary
for East-West Trade. Again, this would reflect
the Department's major interest in and staff
contributions to the Board's working-level
functions.)
It should be noted that a significant elevation of the
Department's policy role in East-West trade will be most
effective if undertaken in conjunction with a greater
strengthening of the Department's role in overall formulation
of international economic policy, or in a situation where
international economic policy coordination is centered in
the White House. Otherwise, the policy-making process will
continue to be characterized by interagency rivalries,
rather than effective and substantive control.
SCHEDULE
As soon as he takes office, the President should launch a
review of the interagency policy-making process in East-West
trade. This could well be done in the context of a general
reassessment of the international economic policy-making
structure of the U.S. Government. Specific action forcing
events will also require prompt decisions:
Because the East-West Foreign Trade Board has
a legislative mandate to submit to Congress
quarterly reports, an early decision should be
made as to its Chairmanship. Secretary Simon's
designation does not dictate that the next
chairman must come from Treasury. Rather, in
appointing a new Board Chairman and Executive
Secretary, the most effective and logical
location of the positions should be considered.
The U.S.-U.S.S.R. Joint Commercial Commission will
probably be meeting in early 1977. Therefore, a
decision must be made as to whether the chairmanship
will return to the Secretary of Commerce, SO that
preparation for that high-level meeting can begin.
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The Department is a member of the legislatively
mandated Commission on Security and Cooperation
in Europe, charged with monitoring the Helsinki -
Agreements. A decision must be made by the
President as to who will represent the Department
on the Commission. This is especially critical,
since the Commission intends to hold hearings
on East-West economic cooperation, possibly in
early March.
CONTROLS ON THE TRANSFER OF TECHNOLOGY
AND EXPORT OF HIGH TECHNOLOGY GOODS
TO COMMUNIST COUNTRIES
BACKGROUND
The Secretary of Commerce is responsible, pursuant
to Executive Order, for administering the Export
Administration Act of 1969, as amended. This statute
calls for controls to be exercised in the interest of
promoting national security, furthering foreign policy,
and restricting undue exports of scarce commodities.
Insofar as national security is concerned the Act declares
it to be national policy to restrict exports of goods
or technology which would make a significant contribution
to the military potential of any nation or nations that
would be detrimental to the national security of the US.
The Department has control jurisdiction over all
commodities and unclassified technology exports from
the US except certain specialized items handled by
other government agencies, e.g., arms, ammunition, and
implements of war and atomic energy materials and
facilities. National security controls focus on such
high technology products as computers, semiconductor
manufacturing equipment, sophisticated numerical
controlled machine tools, and certain electronic
instrumentation. Technology relating to production
of controlled products is also under control.
ISSUE
For several years increasing concern has been expressed
in many quarters over the transfer of US technology
abroad. A Defense Science Board Task Force (a non-
government body which advises the Department of Defense)
expresses the view that current controls over exports
of technology do not adequately serve US national security
interests. The Task Force report identifies a number
of export policy issues and recommends a course of action
respecting them. Congress has interested itself in the
matter and in proposed legislation on which congres-
sional action was not completed prior to adjournment
of the 94th Congress on October 2, 1976, had included
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language to amend the Export Administration Act to
require any agreement with communist countries that
could result in the transfer of technology to be
reported to the Department of Commerce. At present
there is no real agreement in government or in the
private sector as to the nature and extent of the
problem and no consensus as to appropriate solutions.
One of the principal issues posed by the Task Force
Report is whether controls on strategic technology
exports both to the communist and free world countries
should be tightened. A corollary issue is whether
it would be appropriate from the standpoint of national
security to deemphasize strategic product controls
and solely to control strategic technology. This
question thus relates to the proper scope of the
Department's controls over products. Similarly, the
Report asks whether US strategic products should be
completely embargoed to communist countries instead of
being licensed for non-strategic uses as is the current
practice. This suggests a fundamental change in the
Department's approach to product controls.
ANALYSIS OF ISSUE
A beginning has been made on the analysis of these issues.
The Export Administration Review Board has taken cognizance
of the Task Force Report. A preliminary identification
of the principal issues raised by the Task Force is under
review within the Department. The Defense Department is
engaged in identifying technologies of national security
concern and is otherwise dealing with its internal
mechanism for making national security judgments on
export control matters. Components of the Department
are participating in this. As matters proceed, a number
of agencies concerned with national security export
controls and the governments of those other countries
participating in the international strategic control system
(CoCom) will be involved.
The process of identifying and analyzing the issues raised
by the Task Force Report is not sufficiently advanced for
agency positions or internal departmental views to have
been formed.
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SCHEDULE
It is difficult to establish a- realistic schedule for
resolution of this issue in view of the number of
agencies and governments involved. In general, it
might be reasonable to assume that interagency agree-
ment as to the critical issues to be addressed could
be reached by the end of February; interagency
discussion of the issues concluded and a US government
agreed position regarding the issues reached by early
fall; and discussion with our international partners
concluded by the end of 1977. This schedule assumes that
the Department of Defense will complete its identification
of strategic technologies by the end of April 1977.
NORMALIZATION OF COMMERCIAL RELATIONS WITH CUBA
Background
Since 1962, a strict embargo has existed on bilateral
commercial transactions between the U.S. and Cuba. (See
Appendix I for authorizing legislation.) The embargo
affects all U.S.-Cuban trade, whether direct or through
third countries, except in special humanitarian cases.
During 1975, the U.S. took some tentative steps toward
more normal commercial relations with Cuba and the Castro
government made some concilatory responses. The U.S.
concurred in the ending of the multilateral OAS embargo
and, consistent with that position, in August 1975,
allowed U.S.-controlled companies in third countries to
engage in limited trade with Cuba. Further movement was
suspended in November 1975 however, following the involve-
ment of Cuban troops in Angola. Castro has consistently
offered to begin negotiations "if the essential aspects
of the embargo" are ended but the U.S. has not accepted,
demanding the return of Cuban military personnel to Cuba.
The incoming Administration will face the issue with
a new urgency resulting from Cuba's announced cancellation
of the 1973 antihijacking agreement, to become effective
April 16, 1977. Cuba claims the U.S. has failed to
fulfill its commitment under the agreement to curb terrorist
activities in the Cuban exile community. However, Castro
did allow for possible discussions, without preconditions,
to salvage the agreement.
Issues
Before specific commercial issues can be addressed, the
new Administration must first decide whether it is timely
to improve bilateral political relations with Cuba. If
positive determination is reached, then we can begin the
lengthly process of resolving the complex issues between
the two countries, including claims for expropriated pro-
perties of U.S. citizens valued at $1.8 billion. Ultimately,
fully normal trade relations can only be achieved through
Cuban compliance with the comprehensive provisions of the
1974 Trade Act. This will require complex and laborious
negotiations. Nevertheless, since direct commercial
relations presently do not exist, significant progress
could be achieved even before the Trade Act provisions
would need to be addressed.
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Analysis of the Issues
Cuba obtains about 75 percent of its hard currency
export income from sales of sugar Now may be a strategic
time to negotiate with Cuba since low world sugar prices
have forced Castro to institute austerity measures and to
limit imports from noncommunist countries sharply in order
to conserve scarce hard currency reserves and to maintain
the country's international credit standing. Thus, the
economic foundation of Castro's bargaining position vis-a-
vis the U.S. is significantly weaker than in 1975.
It is possible that an end to the embargo on direct
exports of food and medicines would satisfy Cuba's pre-
condition of lifting "the essential aspects of the embargo."
An indication of U.S. willingness to do so could enable
direct negotiations, initially begun on the antihijacking
agreement, to proceed to other bilateral problem areas and
thereby restart the long normalization process.
The immediate economic benefits to Cuba of a limited
lifting of the U.S. embargo would probably be small since
the U.S.S.R. finances most of Cuba's current grain purchases,
supplied mainly by Canada. However, Cuba is a large rice
consumer and since the U.S. has a large surplus crop, Cuba
might divert some purchases to closer U.S. sources. Medical
care has a very high priority in Cuba even in austerity,
therefore, immediate exports of U.S. pharmaceuticals are
likely. There would also be immediate political benefits
for the Castro government, including an enhanced status in
the third world, but these would result whenever the U.S.
decides to deal with Cuba. On the cost side, Castro would
lose the U.S. embargo as a ready popular excuse for every
economic difficulty.
Unilaterally lifting the ban on food and medicines
would do little to weaken the U.S. negotiating position
on other issues because the economic impact of the embargo
on Cuba has been sharply reduced over time, particularly
since the OAS ban ended. Its effectiveness was further
reduced when we allowed foreign subsidiaries of U.S. firms
to trade with Cuba. The economic benefits to the U.S. of
food and medicine exports would be small in the short term,
consisting mainly of sales of rice and medical supplies.
However, grain sales could become substantial if the U.S.S.R.
were to instruct Cuba to divert purchases to the U.S. to
realize transportation savings.
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Schedule
Substantative action on the political issues lies
within the purview of the Department of State. However,
in dealing with Cuba, both commercial and political issues
must be dealt with simultaneously since Cuba steadfastly
refuses to open discussions until the trade embargo is
lifted. Furthermore, the negotiating process will involve
many issues, such as compensation for claims, that have both
political and commercial aspects which are difficult to
separate. Consequently, neither the political nor the
commercial can be easily used as a precondition for further
progress.
Analysis of some commercial aspects of normalizing
relations has been undertaken in Department of Commerce
studies, although specific positions have not yet been
taken. Appendix II lists actions Commerce could take
in concert with appropriate political developments.
Although the likely pattern of events is unknown,
there are two action forcing events that may provide
opportunities for progress. U.S. passport restrictions
on travel to Cuba, including the ban on business travel,
are due for routine review prior to March 15, 1977.
Ending the travel limitations could initiate a more positive
environment for future developments (as was accomplished
with China in 1969) with little actual effect on the volume
of travel. The antihijacking agreement, set to expire on
April 16, 1977, may also require a U.S. initiative.
APPENDIX I: Legislative Authority for Cuban Embargo
In 1961, the Congress authorized the President to impose
"a total embargo on all trade between the U.S. and Cuba."
The embargo was activated by Presidential Proclamation
3447 on February 7, 1962, which directed the Secretary of
the Treasury to implement the ban on all transactions
including imports. The Secretary of Commerce, acting
under authority of the Export Control Act of 1949 (since
replaced by the Export Administration Act of 1969) placed
Cuba in the export control embargo Category Z. Both
Secretaries were further directed to modify the embargo
as required by the national interest. Thus, under existing
legislation, the embargo could be altered or ended by
unilateral action of the Executive Branch.
Commercial relations with Cuba are subject to all of the
provisions of the Trade Act of 1974 as applied to non-
market economy countries. Cuba will therefore be denied
nondiscriminatory tariff (MFN) status, eligibility for
Eximbank and Commodity Credit Corporation credits until
it concludes a Bilateral Commercial Agreement with the U.S.
that complies with the emigration provisions of Section 402
of the Trade Act.
APPENDIX II: Possible Commerce Department Approaches to
Commercial Relations with Cuba
Assuming the accomplishment of certain political steps,
the Department of Commerce could take the following
interim measures toward normalized commercial relations:
U.S. passport travel restrictions are scheduled for
routine review prior to March 15, 1977. Appropriate
action to end the ban on travel could initiate a more
positive environment for future developments as was
accomplished with China in 1969. In conjunction with
Department of State action on the passport regulations,
Commerce could modify the appropriate export regulations
that restrict travel. Action would also be required of
the Department of the Treasury to remove the prohibition
on expenditure of funds for travel to Cuba.
The actual impact of such steps would probably be minimal
since travel to Cuba is inherently limited by the require-
ment for a direct invitation from Cuba. Furthermore,
regulations on travel have complicated, but have not
prevented U.S. citizens from legally traveling to Cuba.
Commerce could approve licenses for exports of U.S.
origin medical supplies and food in return for re-
activating the antihijacking accord, releasing U.S.
citizen prisoners in Cuba and convening substantative
talks on other bilateral problems, including compensation
for expropriated assets, the status of Guantanamo naval
base, and freer emigration.
If discussions proceed satisfactorily, Commerce could
approve licenses for exports by U.S. subsidiaries of
foreign made goods that contain a larger portion of U.S.
origin components than allow under current regulations
(20% by value is the maximum -origin component
currently allowed).
At the appropriate time, Commerce could place Cuba in
Category Y (with the U.S.S.R., China and most of the
countries of Eastern Europe) and approve licenses for
direct export of nonstrategic U.S.-origin products.
RELATIONSHIP BETWEEN COMMERCE AND THE BUSINESS
COMMUNITY IN ENERGY MATTERS
Background
Within the Department's overall mandate to safeguard and promote the
economic well-being of the Country, energy matters have assumed a major
position. Long-term problems such as assurance of supply to produce the
Nation's goods and services are coupled with immediate goals to foster
and promote energy efficiency in products and processes.
While market forces can, and do, make business more aware of the need
for energy efficiency and of methods for achieving it; significant
numbers of businessmen have yet to develop and implement programs which
address the difficult problems of adequate long-term supplies of energy.
Also, many have yet to address the immediate problems of the required
actions to achieve energy efficiency.
Issue
Which of the Department's business-related energy programs
should be emphasized to inform business of the nature,
duration and extent of the energy problem; and to encour-
age them to take action to reduce the wasteful use of energy
while maintaining national economic well-being?
Analysis of Issue
While there are many Federal agencies involved in dealing with the
energy problem, this duplication of effort is more apparent than real if
consideration is given to the diverse audiences to which these agencies
address themselves.
The Federal Energy Administration is given the role of "lead agency" on
energy matters, overall, and the Energy Research and Development Admin-
istration is the leader in technical aspects of energy supply develop-
ment and new technology matters.
Under these "umbrellas", various agencies have addressed the energy
problem in dealings with their particular constituencies. Agriculture
works closely with farmers; HUD in the housing area; DOT with trans-
portation, for example.
Commerce has its own constituency the business community, and for this
audience, Commerce has the highest credibility and easiest access.
While the business community uses a large percentage of the Nation's
energy, it also produces the jobs and economic impetus to our continued
economic health. Efforts to alert businessmen to long-term problems of
GERALD FORD LIBRABY
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supply and, at the same time, encourage them to develop meaningful
programs to improve the efficiency of their products and processes are
very appropriate actions to take within the over-all objective of the
Department and the immediate goals of addressing our energy problems.
Given these considerations, it is felt that Commerce has a vital and
unique role to play in business-related energy matters.
In fulfilling these responsibilities, we have felt that a prerequisite
for action is an awareness of the need for action. This has been the
initial premise of Departmental energy program planning. While most
major companies have adequately responded to the forces acting upon them
(present and anticipated), there is a significant number of businesses
for which even today's energy costs have not been sufficient motivation.
Commerce programs have been in two basic areas: first, demonstration of
the need for action both today and in the future and, second, what
actions can be taken. While need for the former still remains a high
priority, particularly for smaller organizations, increased emphasis
needs to be placed on the latter.
New publications in the "how-to" area should be developed to supplement
those now available and these new efforts should be directed to specific
audiences and/or industrial processes. Increased funding is required to
address the multitude of subjects of importance to business.
Refocusing our efforts to local levels is required SO as to reach the
large number of relatively small companies which are not part of major
corporations.
Additional innovative methods of direct technology transfer, such as the
"Energy Efficiency Sharing" program, need to be developed and imple-
emented.
Departmental leadership of an ad-hoc, multi-agency, effort to improve
the total Federal image in energy matters to businesses, the "Federal
Energy Center" program, should be continued and additional resources are
needed to continue this trade-show and industrial exhibition program.
Work with technology transfer in the international area should continue
and be increased. This is a two-way flow of information on energy
efficient products and processes between the U.S. and other countries.
A most important mechanism for achieving the Department's energy goals
is the National Industrial Energy Council. Chaired by the Secretary and
the only formal linkage between the Secretary and leaders of major
companies, this advisory committee should be continued and a more
definitive role developed.
Schedule
i
FORD
See Appendix I for time-frame and milestones for current business
related energy programs.
GRALD
LIBRARI
APPENDIX I
Program or Activity
Schedule
Comments or Notes
Production, distribution and
promotion of EPIC Series on
Energy Management
EPIC Supplement I
Printed and
Needs additional publicity and pro-
available
motion through trade associations,
NIEC and OFO
Small Business Manual
Due in Oct.
Should be promoted heavily by associ-
ations and NIEC. Direct mailings to
selected companies and through NFIB
and NSBA. SBA can play part if willing
Energy Management Course
Due in Nov.
OFO has need for this and will use,
but local groups and Chambers should
be key market as well as associations
Energy Management Case
Due in Dec.
Direct promotion to selected businesses
Studies
and through OFO and associations
Furnaces, Ovens and Kilns
Due in Jan.
Same as above
Steam Systems
Due in Mar.
Same as above
Burner Adjustment Manual
Due in July
Same as above
Distribute and publicize Prgress
Oct. et. seq.
An on-going job which needs additional
Reports and Updates on Voluntary
emphasis from press, associations and
Industrial Energy Conservation
and local groups
Program
Federal Energy Center/trade
Oct, Nov, May
A comprehensive program which is
show activities
multi-agency in composition and
suitable for business education.
Can be played up by media work
Revision of "Energy: Critical
Due Oct.
Distribution is already good on
Choices Ahead" film and manual
old version and can be channeled
similarly. Needs better TV and
press utilization
Revision of OEP brochures
Oct, Dec.
Should be emphasized through associ-
ations and local business.
Film on "Economics of Energy"
Sept.
First cut only. If film results it
should be promoted heavily by trade
associations and local business groups
FORD & LIBRARY 07VH
- 2 -
National Industrial Energy
Sept, Dec
Not a project, per se, but NIEC must
Council Meetings
Mar, June
Be more involved in development and
Sept.
promotion work in all areas of interest
Film on "How to Start an
Not within current resource allocation
Energy Management Program"
Projected cost of approximately $25K.
A much needed tool for OFO and assosi-
ations
Space Conditioning Film
Not within Current resources. Badly
needed to address "how-to" area for
large numbers of smaller businesses.
Easy to promote by many channels
International Technology
March
An experimental tool which can be
Transfer Program
very effective not only in moving
technology but in demonstrating
Government concern and response.
Energy Information Workbook
Jan.
A narrowly focused but poetntially
very valuable tool for medium size
companies. Probably best promoted
by associations. Follow-up costs
possibly high but must be determined
by current tests.
Energy Efficiency Sharing
Current &
Potentially one of the most effective
on-going
tools for moving "how-to" programs.
Very low cost as the delivery system
is through private business only with
modest OFO and OEP support.
Meetings, seminars, workshops
Oct, et seq.
Difficult to schedule because of our
Speakers program
being responsive in most cases rather
than initiative of the program. Limit
is resources in OEP in both people and
dollars.
FORD is LIBRARY
INDUSTRIAL CONSERVATION: FEA AND
COMMERCE ROLES AND RESPONSIBILITIES
BACKGROUND:
Commerce has been working to promote energy conservation by
business and industry since before the Arab embargo of 1973-74.
With the creation of the Federal Energy Office, and later the
Federal Energy Administration, a Joint Voluntary Industrial
Energy Conservation Program (VIECP) was established by agree-
ment between DOC and FEA. Under that agreement, FEA provides
policy direction and review while Commerce has responsibility
for day-to-day operation of the program. The major thrust of
the effort has been to work with trade and other associations
to reach very broad groups of companies which make up the
largest energy consuming industries. Contacts have been made
with some 80 associations or groups and about 40 have provided
DOC with data on a regular basis. In the latest report, now
in preparation, the Btu's reported account for more than 65%
of all industrial energy used. In this voluntary program, the
federal government has suggested broad guidelines for the data
submitted, while the exact data and energy efficiency measures
have been individually designed by the associations to accommo-
date the realities of their own operations.
The Energy Policy and Conservation Act was passed by the Congress
in December 1975 and signed by the President (P.L. 94-163). It
contains provision for a mandatory industrial conservation report-
ing program. Under this legislation FEA is to develop energy
conservation targets for the 10 most energy consuming industries
(2-digit SIC level) as well as to identify the 50 most energy
consuming companies in each of the 10 industries (within a bottom
consumption limit of 1 trillion Btu's per year).
These companies are to report annually to FEA their progress toward
the target. An exception to the companies mandatory report require-
ment can be made if the company participates in an "adequate
voluntary reporting program." The legislative history makes it
clear that this was done in order to provide for the continued
existence of the present voluntary program managed by DOC-OEP.
ISSUE:
Should the joint FEA-Commerce program be continued with the
respective agency responsibilities unchanged?
ANALYSIS:
To a large extent, the resolution of the issue will be influenced
by the general views of the incoming Administration on energy
2.
conservation, their emphasis on voluntary VS. mandatory
programs and on government organizational concepts.
The VIECP has been successful (both in terms of increased
participation and improved results) primarily because:
DOC emphasis has been on holding down or reducing
energy costs,
DOC recognizes the great diversity among industrial
corporations and their energy needs, and
Industry has had faith in DOC's advocacy role.
Because the voluntary program has, under EPCA become an al
ternative to mandatory reporting, FEA has used its require-
ments under law to report progress toward the targets to re-
shape the design of the voluntary reporting program to an
extent that Department of Commerce regards as inappropriate.
FEA has consulted closely with Department of Commerce in the
development of implementing actions and rulings for EPCA as
well as in deciding the criteria for an adequate voluntary
reporting program. However, the criteria proposed by FEA
is strictly prescriptive as to how energy efficiency is to
be calculated, doing away with the flexibility which has
characterized the program to date. We do not yet know how
industry will respond to the changes which the criteria
and other rulings will require in their program.
Future problems of this sort can be avoided by a recognition
of the integrity of the voluntary program and a more specific
delegation of authority from the Administrator of FEA to the
Secretary of Commerce for conduct of the VIECP under Title III,
Part D of P.L. 94-163. FEA would retain policy direction (i.e.,
setting of goals and objectives for the program) and the review
of accomplishments, but the operational and procedural methods
used to carry out the program would be Department of Commerce's
clear and designated responsibility.
SCHEDULE:
We shall see industry response to implementation of Title III,
D of P.L. 94-163 during the first four months following the
first report required in 1977.
ENERGY EXPORT POLICIES AND LEVELS
The Department instituted formal export controls on energy
products derived from petroleum and natural gas on December 13,
1973, at the height of the Arab oil embargo, to complement the
then Federal Energy Office's domestic allocation controls.
These controls were implemented in response to an energy situ-
ation which was at crisis proportions with a potential to grow
even worse. Export quotas for petroleum products (e.g., gaso-
line, kerosene, heating oils, propane) were established to
restrict exports to historical levels and destinations, thus
conserving energy products for domestic use while maintaining
our traditional trading relationships. The controls have re-
mained essentially unchanged to date with additional products
(e.g., naphtha, petroleum coke, synthetic and manufactured
natural gas) being added to the list of controlled products.
Although the controls were originally imposed under the short
supply authority of the Export Administration Act, four other
statutes* have since been enacted virtually prohibiting exports
of crude petroleum and natural gas, the feedstocks from which
the controlled energy products are derived. These statutes
also contain broad discretionary authority to control exports
of additional energy products, petrochemical feedstocks, coal,
and machinery and equipment related to the production and
utilization of energy.
With export controls firmly in place and ready availability of
foreign crude oil for import, the Federal Energy Administration,
in recent months, has removed price controls and has lifted its
domestic allocation controls over a number of petroleum energy
products. Crude petroleum of domestic origin remains subject
to price controls, however, and the FEA maintains standby allo-
cation authority in the event of an actual or threatened
interruption in our supply of foreign crude. Pursuant to the
Natural Gas Act of 1938, the Federal Power Commission continues
to control exports of natural gas.
Issue:
It is conceivable that the export control program, having been
designed to react to the extreme shortages which were occurring
during the period of embargo, does not correctly respond to the
present domestic energy situation.
The Trans-Alaska Pipeline Authorization Act of 1973, the Energy
Policy and Conservation Act of 1975, the Naval Petroleum Re-
serves Production Act of 1976 and the Alaskan Natural Gas
Transportation Act of 1976.
2
Analysis of Issue:
With no current shortages of energy products derived from petro-
leum, and only limited shortages threatened for products derived
from natural gas, the need to continue the current export con-
trol program over all such products has been challenged. It is
argued by some that removal of controls or increased flexibility
in the control program would not result in shortages of these
products, would encourage expansion of domestic refining capac-
ity, would allow U.S. refineries increased operating and
marketing flexibility resulting in increased efficiency, and
would reduce unnecessary Government regulation of industry. It
should be noted that refined petroleum products which are ex-
ported do not benefit from the FEA Entitlements Program or the
lower price of domestic crude oil.
Proponents of the current control program, on the other hand,
maintain that tight controls over exports of energy products
are an essential element of national energy policy, and their
removal could result in a surge in exports from their present
miniscule level (only 0.3 percent of the domestically refined
products under control were exported furing the first quarter
of 1976). It is further contended that removal of controls
might have a domestic inflationary impact, might require reim-
position of FEA's domestic allocation controls, and would leave
us without a sufficiently tight export control program in place
in the event of another interruption of foreign supplies:
Any action substantially altering the present system of export
controls on energy products would have to be coordinated care-
fully with the Federal Energy Administration, and could evoke
significant reactions from the Congress, consumer groups, and
the public at large.
Schedule:
While the Energy Policy and Conservation Act mandates controls
over the export of crude petroleum and natural gas until June 30,
1985, it is the Department's current practice to announce the
continuation of controls and the establishment of export quotas
on a quarterly basis, and it would seem logical to time any
announcement significantly altering the present control system
to coincide with the beginning of a quarter. Appropriate modi-
fications to the current control program should be identified
during the first quarter of 1977 and implemented by the second
quarter.
Congressional Oversight
Key Congressional Contacts
SENATE COMMERCE
Warren G. Magnuson
- Chairman
FOREIGN COMMERCE AND
Daniel K. Inouye
- Chairman
TOURISM
SPECIAL SUBCOMMITTEES
OIL AND GAS PRODUCTION
Adlai E. Stevenson III
- Chairman
AND DISTRIBUTION
Ernest F. Hollings
- Vice-Chairman
TEXTILE INDUSTRY
John O. Pastore *
- Chairman
SENATE SELECT SMALL
Gaylord Nelson
- Chairman
BUSINESS
RETAILING, DISTRIBUTION
J. Bennett Johnston, Jr. - Chairman
AND MARKETING PRACTICES
SENATE BANKING, HOUSING
William Proxmire
- Chairman
AND URBAN AFFAIRS
CONSUMER AFFAIRS
Joe Biden
- Chairman
SENATE APPROPRIATIONS
SUBCOMMITTEE ON STATE,
John O. Pastore *
- Chairman
JUSTICE; COMMERCE,
THE JUDICIARY
Also on Diplomatic and
John Sparkman
Consular Items
Jacob K. Javits
Frank Church
HOUSE INTERSTATE AND
Harley O. Staggers
-
Chairman
FOREIGN COMMERCE
CONSUMER PROTECTION AND
Lionel Van Deerlin
-
Chairman
FINANCE
ENERGY AND POWER
John D. Dingell
- Chairman
OVERSIGHT & INVESTIGATIONS
John E. Moss
- Chairman
TRANSPORTATION & COMMERCE Fred B. Rooney
- Chairman
* Not re-elected to 95th Congress
HOUSE SMALL BUSINESS
Joe L. Evins*
- Chairman
COMMODITIES AND SERVICES
Charles J. Carney
- Chairman
ENERGY AND ENVIRONMENT
John D. Dingell
- Chairman
GOVERNMENT PROCUREMENT
James C. Corman
- Chairman
& INTERNATIONAL TRADE
HOUSE BANKING, CURRENCY
Henry S. Reuss
- Chairman
AND HOUSING
CONSUMER AFFAIRS
Frank Annunzio
- Chairman
DOMESTIC MONETARY POLICY
Wright Patman*
- Chairman
ECONOMIC STABILIZATION
Thomas L. Ashley
- Chairman
INTERNATIONAL TRADE
Thomas M. Rees
- Chairman
INVESTMENT & MONETARY
POLICY
HOUSE APPROPRIATIONS
SUBCOMMITTEE ON STATE,
John M. Slack
- Chairman
JUSTICE, COMMERCE AND
JUDICIARY
SENATE/HOUSE JOINT ECONOMIC
Hubert H. Humphrey
- Chairman
Wright Patman *
- Vice-Chairman
CONSUMER ECONOMICS
Hubert H. Humphrey
- Chairman
INTERNATIONAL ECONOMICS
Henry S. Reuss
- Chairman
* Not re-elected to 95th Congress.
Outside Contacts
Bureau of Domestic Commerce
Agency
Nature of Contact
Water Resources Council
The Council is composed of
Secretaries of several Departments
who serve as a "Board of Directors"
and who designate representatives
to serve on a Council of Repre-
sentatives acting as the Council's
management unit. A Bureau official
is alternate to the Commerce
representative who cooperates in
the coordination of all Federal
water resources activities
recommending the establishment of
river basin commissions, and
approval of state planning grants.
Federal Preparedness
The Bureau provides staff support
Agency (GSA)
on a variety of matters pertinent
to management of the Strategic
and Critical Materials Stockpile;
administers and trains a large
National Defense Executive Reserve;
and participates in and prepares
pertinent material for mobilization
exercises and plans.
General Services Admin-
A Bureau representative co-chairs
istration (Federal
meetings called to develop
Preparedness Agency and
disposal programs for individual
GSA Stockpile Group)
materials in excess of stockpile
requirements and coordinates and
provides assistance to GSA on all
stockpile disposal programs.
Agency
Nature of Contact
Department of Defense,
Coordinate matters pertinent to
State, Interior,
management of the Strategic and
Agriculture
Critical Materials Stockpile.
Industry Evaluation
The Board is chaired by a Bureau
Board
official. Members are represent-
atives of Departments of Commerce,
Defense, the Interior, Agriculture,
Labor, HEW, Atomic Energy Commission
and the Federal Preparedness Agency.
Members serve as advisors to the
Chairman in the identification of
and approval of studies of products,
services and their supporting
facilities which are of exceptional
importance to the national security.
Department of
Transportation
Participates in consultations on
current and expected future activi-
ties of U.S. aerospace industry
as input to their international
technical assistance and promotion
of civil aviation programs.
(GSA) Federal Preparedness
The Bureau administers the Priori-
Agency
ties and Allocations Activities
under the Defense Production Act
of 1950, and by allegation through
Executive Order 10480. Program
policy review of these activities
flows through the Administrator
of GSA through the Director of the
Federal Preparedness Agency.
Interagency Committee to
The Deputy Assistant Secretary for
Assess the Impact of Crimes
Domestic Commerce chairs this
Against Business
Committee of 11 representatives
of government agencies organized
to assess the economic impact of
crimes against business, and
evaluate the effectiveness of
existing Federal Programs to reduce
such impact.
Bureau of International Commerce
Agency
Nature of Contact
Department of State
The Bureau maintains continuous dialogue
and coordination of positions with State
on the range of U.S. commercial activities
abroad (except for Russia, China and Eastern
Europe), particularly as to how commercial
promotion activities may be affected by
political and economic developments. This
involves close cooperation with U.S. Embassies
in the areas regarding Commerce trade promotion
programs and business assistance for U.S. firms.
The Bureau cooperates on liaison with U.S.
industry for information on "early warning"
and representations to host governments on
behalf of U.S. business. Participate with
State in an interagency effort to promote
American sourcing on major foreign projects.
The Bureau works with State to plan, budget,
manage and participate in 3-4 regional economic/
commercial officer conferences annually. These
conferences maintain a continuous dialogue with
Foreign Service officers responsible for field
implementation of Commerce's commercial programs.
The Bureau cooperates with or otherwise
negotiates agreement on assignment of Foreign
Service Officers to various Economic/Commercial
positions overseas.
President's Inter-
The Secretary of Commerce chairs this Committee
agency Committee on
of 13 top-level officials organized to coordi-
Export -Expansion
nate interagency efforts to remove domestic
impediments to exporting. A Bureau staff
member serves as Executive Secretary of the
Committee.
U.S. Information
The Bureau generates program ideas and media
Agency
material for USIA's export promotion policy
through an agency liaison officer assigned to
the Bureau.
Agency
Nature of Contact
Export Import Bank
The Bureau cooperates with Ex-Im Bank on
a day-to-day basis in various export
promotion activities. Ex-Im Bank often
participates in Commerce overseas shows.
Small Business
Provide export promotion information--
Administration
including information about U.S. trade
missions and trade fairs held abroad--for
dissemination to the business community
through SBA communications network. Coordinate
on visual aids and seminars to promote export-
ing by small firms.
OFFICE OF FIELD OPERATIONS
Agency
Nature of Contact
Department of Defense,
OFO coordinates the participation of civilian
GSA, SBA, AEC, Agri-
agencies and Members of Congress in the
culture, DOT, EDA, HUD, Business Opportunity/Federal Procurement
GPO, Justice, HEW,
Conferences.
Interior, Labor, NASA,
U.S. Postal Service, and
VA
Federal Preparedness
OFO provides field support for FPA/GSA
Agency (FPA/GSA)
administration of priorities and allocations
under the Defense Materials System, and
other National Defense, Industrial Mobilization,
and Emergency Readiness programs.
National Bureau of
OFO Headquarters and field personnel cooperate
Standards, Census,
with these agencies in the establishment,
Patent and Trademark
sponsorship and/or promotion of selected
Office, Export-Import
conferences and seminars in the field.
Bank, OPIC
Agency
Nature of Contact
Bureau of Census
OFO trade specialists counsel
the business community on the
availability and use of Census
data for marketing purposes.
Department of Defense,
OFO cooperates with these
GSA and SBA
agencies in publishing the
Commerce Business Daily. OFO
also works with these agencies
in preparing Armed Services
Procurement Relations and the
Federal Procurement Regula-
tions as they relate to
procurements and contract
awards published in the CBD.
Government Printing Office
Thirty-two (32) of the 43 DIBA
District Offices are official
Sales Agents of GPO.
OFO is responsible for prepar-
ing material for the Commerce
Business Daily which is
published by the GPO.
Department of State
OFO works directly and
indirectly with Foreign Service
Officers and Foreign Service
locals (FSL's) in the counsell-
ing and training of American
businessmen through seminars,
workshops, trade missions
and shows and on business
calls.
Patent and Trademark Office
OFO field installations
become official receiving
stations for Patent applica-
tions and correspondence in
the event of any mail stop-
pages.
Bureau of Resources and Trade Assistance
Agency
Nature of Contact
Department of State
Collaborate in developing U.S.
position regarding, and evaluating
performance of, Japanese and
European steel producers under the
Voluntary Restraint Arrangement (VRA).
Participate in considering other
import problems such as non-rubber
footwear, in developing the U.S.
position on a multilateral safe-
guard system under GATT and on U.S.
Delegations to international
discussions on classification of
steel products and the shoe import
problem.
Committee for the Implementation of
Textile Agreements (CITA) chaired and
administered by Commerce. Supervises
the operation of and implements all
textile agreements.
Participate in international
discussions and negotiations on hard
fibers and raw cotton.
Council on International
Participate in CIEP studies such
Economic Policy
as possibilities of an "early
warning system" to deal with import
competition; means to prevent or
remedy import injury; development of
a multilateral safeguard system.
Department of Treasury
Receive through Bureau of Customs
applications for duty-free importation
of certain scientific instruments for
processing by Commerce and arrange
for Customs to implement the sub-
sequent Commerce decisions.
Agency
Nature of Contact
Department of Army
Maintain staff contacts to facilitate
the operation of the Foreign-Trade
Zones Board chaired by Secretary
of Commerce, and its Committee of
Alternates.
Department of Interior
Jointly administer the program
pertaining to the allocation of
quotas for duty-free importation
into the U.S. Customs Territory
of watches and watch movements
made by producers located in the
Virgin Islands, Guam, and American
Samoa (P.L. 89-805).
Office of Energy Programs
Agency
Nature of Contact
Energy Research &
Task Force on Energy
Development Administration
Extension Services -- Staff members
(ERDA)
serve as DOC representatives on
program which entails the transfer
of energy technology to the public
and industry as mandated in ERDA
legislation.
Federal Energy
Ad hoc Committee on Concrete
Administration (FEA)
Industry -- Staff members serve to
and Energy Research and
establish energy conservation in
Development Administration
concrete industry.
Presidential Task Force on Reform
of FEA Regulation -- This is one
of several high-level task forces,
under the overall supervision of
a member of the President's Council
of Economic Advisers. The purpose
of this particular task force is
to recommend simplification or
improvements in FEA price and
allocation regulations which may
impose excessive costs compared
to benefits and to recommend
improvements in the administration
of affected programs.
Federal Power Commission (FPC)
Curtailment Strategies Technical
Advisory Committee on Natural Gas.
Federal Interagency Council on
Energy Information.
Interagency Task Force (ad hoc) on
Boiler Conversion.
Interagency Group on Energy
Information Requirements.
International Energy Subcommittee,
chaired by State, developing policy
for the Conference on International
Economic Cooperation.
Office of Energy Programs (con't)
Agency
Nature of Contact
FEA and Energy Research
International Energy Agency (IEA)
& Development Administration
Interagency Subgroup, chaired by
FEA, developing policy on inter-
national conservation for the IEA.
Interagency committee, chaired by
State, for the National Security
Study Memorandum (NSSM) developing
a U.S. energy program.
Institutional Barriers Panel of
the Geothermal Advisory Council.
Intergovernmental Coordinating
Council (coordination of energy
policies with states and regional
commissions).
In conjunction with the Department
of State, staff members serve to
direct ad hoc interagency effort
to improve international technology
flow.
Federal Energy Administration
Ad hoc Task Force on Contingency
(FEA)
Planning -- Staff members serve
on this planning staff as mandated
by the Environmental Policy and
Conservation Act.
"Federal Energy Center" -- OEP
acts as lead agency dealing with
multiagency presence at trade shows
and industrial exhibitions.
FEA Workshop Programs --- Staff
serves in planning group.
Interagency Task Force on Energy
Standards.
Member of National Energy Watch
Program.
Office of Energy Programs (con't)
Nature of Contact
Agency
Ad hoc Committee on
In conjunction with FEA, ERDA
Cogeneration of Electricity
and the Federal Power Commission
staff members develop recommenda-
tions for presentation.
Ad hoc Group on Flue-Dampers
In conjunction with the Federal
Trade Commission, American Gas
Association, ERDA and FEA, staff
members participate in study to
provide data and priorities for
gas furnace modification by
installation of flue dampers.
Presidential Executive
Staff members participate in
Interchange Program (PEIP)
international seminar steering
committee.
Federal Power Commission (FPC)
Natural Gas Survey -- Department
of Commerce representative.
Energy Resources Council
Arctic Policy Council, Liquified
(ERC)
Natural Gas (LNG)/Policy/Siting
Task Force, Staff serves on ERC
panels.
Department of Defense
Staff members are part of Economic
Adjustment Committee (EAC) Working
Group on coal gasification project
at Glasgow Air Force Base in
Montana.