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Ronald Reagan Presidential Library
Digital Library Collections
This is a PDF of a folder from our textual collections.
Collection: Roberts, John G.: Files
Folder Title: Ferroalloys (1 of 2)
Box: 25
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WITHDRAWAL SHEET
Ronald Reagan Library
Collection Name ROBERTS, JOHN: FILES
Withdrawer
LOJ
7/31/2005
File Folder
FERROALLOYS (1 OF 2)
FOIA
2005-139
Box Number
CF0578
COOKE
6LOJ
ID Doc Type
Document Description
No of Doc Date Restrictions
Pages
19464 MEMO
REAGAN TO SECRETARIES OF STATE,
2 11/29/1982 B1
TREASURY, DEFENSE, ETC, RE
DEPARTMENT OF COMMERCE'S
SECTION 232 REPORT ON
FERROALLOYS
19465 LETTER
CARROLL JONES TO ROBERT
2 3/21/1984 B1
MCFARLANE, RE PROGRAM FOR
PUGRADING
Freedom of Information Act - [5 U.S.C. 552(b)]
B-1 National security classified information [(b)(1) of the FOIA]
B-2 Release would disclose internal personnel rules and practices of an agency [(b)(2) of the FOIA]
B-3 Release would violate a Federal statute [(b)(3) of the FOIA]
B-4 Release would disclose trade secrets or confidential or financial information [(b)(4) of the FOIA]
B-6 Release would constitute a clearly unwarranted invasion of personal privacy [(b)(6) of the FOIA]
B-7 Release would disclose information compiled for law enforcement purposes [(b)(7) of the FOIA]
B-8 Release would disclose information concerning the regulation of financial institutions [(b)(8) of the FOIA]
B-9 Release would disclose geological or geophysical information concerning wells [(b)(9) of the FOIA]
C. Closed in accordance with restrictions contained in donor's deed of gift.
THE WHITE HOUSE
WASHINGTON
April 20, 1984
MEMORANDUM FOR FRED F. FIELDING
FROM:
JOHN G. ROBERTS
828R
SUBJECT:
Ferroalloys Upgrading Program
Paul Thompson of NSC has asked us to review as soon as
possible an NSC/GSA plan for funding years two and three of
the ferroalloy upgrading program. You will recall that the
President, by memorandum dated November 29, 1982, exercised
his authority under the Strategic and Critical Materials
Stockpiling Revision Act of 1979, 50 U.S.C. § 98 et seq., to
direct GSA to undertake a ten-year program to upgrade
certain stockpiled ores. Contracts have been awarded and
are nearing completion for the first year of this program.
The Office of Stockpile Management within the Federal
Property Resources Service of GSA has proposed awarding a
one-year contract, with an option to renew for the second
year, for years two and three of the program, rather than
simply using a one-year contract, as was done for the first
year of the program. NSC would like to send a three-
sentence memorandum to GSA, approving the use of a one-year
contract with option to renew for a second year.
I have no objection to use of a one-year contract with an
option to renew, rather than two separate, sequential
one-year contracts. GSA notes that the option to renew
approach will save money and limit disruption in the
program. The President's November 29, 1982 memorandum
directed that the program was "to be continued on a year-by-
year basis through the ten-year term at the direction of the
Assistant to the President for National Security Affairs."
The option to renew contract proposal is not inconsistent
with this provision, however, since the United States will
not be required to renew the contract at the end of the
first year of the contract if the program is discontinued.
Wayne Kulig, who runs the stockpile program for GSA, advises
that this will be made clear in the contract. Furthermore,
it is generally recognized that the program will be
continued at least through the third year. Our clearance of
the NSC memorandum to GSA should, however, be expressly
contingent on the option to renew contract not interfering
in any way with the flexibility of the Assistant to the
President for National Security Affairs to discontinue the
program after the end of the first year of the contract.
- 2 -
The second sentence in the proposed NSC memorandum simply
states that the program "should be funded only with materials
declared by Congress to be in excess of our National Defense
Stockpile requirements." This sentence is entirely gratuitous
in a legal sense. The President's November 29 memorandum
directed that the program be funded by materials exchange
using excess stockpile material, and applicable law provides
that materials from the stockpile cannot be disposed of
unless declared to be excess by Congress. See 50 U.S.C.
§§ 98d; 98e (c) (2). NSC prefers to leave the sentence in, to
highlight cooperation with Congress in the program. The
sentence simply states as a directive what is already
required by law, so I have no objections. The third sentence
of the memorandum simply reiterates language from the Presi-
dent's November 29 memorandum, and is unobjectionable.
Attachment
THE WHITE HOUSE
WASHINGTON
April 20, 1984
MEMORANDUM FOR PAUL THOMPSON
STAFF LEGAL COUNSEL AND DEPUTY DIRECTOR
FOR LEGISLATIVE AFFAIRS, NSC
FROM:
FRED F. FIELDING Orig- signed by FFF
COUNSEL TO THE PRESIDENT
SUBJECT:
Second and Third Year Funding for the
Ferroalloy Upgrading Program
Counsel's Office has reviewed the proposed memorandum from
Mr. McFarlane to Ray Kline, Acting Administrator of the
General Services Administration, on the above-referenced
topic. We have been advised by J. Wayne Kulig, Assistant
Commissioner, Office of Stockpile Management, that the
proposed one-year contract with option to renew for a second
year will be drafted in such a manner that it will not
interfere with the flexibility of the Assistant to the
President for National Security Affairs to discontinue the
program after the first year of the contract, should he
determine that such action is appropriate. On the basis of
this representation, I have no objection to the proposed
memorandum from a legal perspective.
FFF:JGR:aea 4/20/84
CC: FFFielding/JGRoberts/Subj/chron
WITHDRAWAL SHEET
Ronald Reagan Library
Collection Name
Withdrawer
ROBERTS, JOHN: FILES
LOJ 7/31/2005
File Folder
FOIA
FERROALLOYS (1 OF 2)
2005-139
COOKE
Box Number
6LOJ
ID
Document Type
No of
Doc Date
Restric-
Document Description
pages
tions
19464 MEMO
2 11/29/1982 B1
REAGAN TO SECRETARIES OF STATE,
TREASURY, DEFENSE, ETC, RE DEPARTMENT OF
COMMERCE'S SECTION 232 REPORT ON
FERROALLOYS
Freedom of Information Act - [5 U.S.C. 552(b)]
B-1 National security classified information [(b)(1) of the FOIA]
B-2 Release would disclose internal personnel rules and practices of an agency [(b)(2) of the FOIA]
B-3 Release would violate a Federal statute [(b)(3) of the FOIA]
B-4 Release would disclose trade secrets or confidential or financial information [(b)(4) of the FOIA]
B-6 Release would constitute a clearly unwarranted invasion of personal privacy [(b)(6) of the FOIA]
B-7 Release would disclose information compiled for law enforcement purposes [(b)(7) of the FOIA]
B-8 Release would disclose information concerning the regulation of financial institutions [(b)(8) of the FOIA]
B-9 Release would disclose geological or geophysical information concerning wells [(b)(9) of the FOIA]
C. Closed in accordance with restrictions contained in donor's deed of gift.
TAB II
II
WITHDRAWAL SHEET
Ronald Reagan Library
Collection Name
Withdrawer
ROBERTS, JOHN: FILES
LOJ 7/31/2005
File Folder
FOIA
FERROALLOYS (1 OF 2)
2005-139
COOKE
Box Number
6LOJ
ID
Document Type
No of
Doc Date
Restric-
Document Description
pages
tions
19465 LETTER
2 3/21/1984 B1
CARROLL JONES TO ROBERT MCFARLANE, RE
PROGRAM FOR PUGRADING
Freedom of Information Act - [5 U.S.C. 552(b)]
B-1 National security classified information [(b)(1) of the FOIA]
B-2 Release would disclose internal personnel rules and practices of an agency [(b)(2) of the FOIA]
B-3 Release would violate a Federal statute [(b)(3) of the FOIA]
B-4 Release would disclose trade secrets or confidential or financial information [(b)(4) of the FOIA]
B-6 Release would constitute a clearly unwarranted invasion of personal privacy [(b)(6) of the FOIA]
B-7 Release would disclose information compiled for law enforcement purposes [(b)(7) of the FOIA]
B-8 Release would disclose information concerning the regulation of financial institutions [(b)(8) of the FOIA]
B-9 Release would disclose geological or geophysical information concerning wells [(b)(9) of the FOIA]
C. Closed in accordance with restrictions contained in donor's deed of gift.
TAB A
2376
THE WHITE HOUSE
WASHINGTON
MEMORANDUM FOR THE HONORABLE RAY KLINE
Acting Administrator, General Services
Administration
SUBJECT:
Ferroalloys Upgrading Program
In response to Commissioner Jones' memorandum of March 21,
1984 (attached), I approve GSA making solicitations to cover
the next 2-year period for the ferroalloy upgrading program
through the use of a 1-year contract with an option to renew.
This program should be funded only with materials declared by
Congress to be in excess of our National Defense Stockpile
requirements. Steps should be taken, to the extent possible,
to avoid undue disruption of the usual markets of producers,
processors and consumers of the materials exchanged.
FOR THE PRESIDENT:
CC: The Honorable Malcolm Baldrige
The Honorable David Stockman
Attachment
TAB A
Commissioner Jones' memo of March 21, 1984
UNCLASSIFIED with
REMOVAL
SECRET Attachment
OF ENCLOSURE(S
10/72/05
I PAB
I
2376
MEMORANDUM
NATIONAL SECURITY COUNCIL
UNCLASSIFIED with
April 6, 1984
SECRET Attachment
ACTION
MEMORANDUM FOR ROBERT C. McFARLANE
FROM:
RICHARD LEVINE BZ
SUBJECT:
Second and Third Year Funding for the
Ferroalloy Upgrading Program
Attached at Tab A is GSA's plan to fund the next 2 years of
the ferroalloy upgrading program. I tasked GSA for this
memorandum in order that we may decide the funding issue
involved with this program in a timely fashion.
The first year of this upgrading program is going along quite
well. A total of $34 million in contracts has been let and a
very large ferrochromium plant in Senator Thurmond's state
that had closed last year was reopened, thus maintaining
furnace capacity for mobilization requirements.
The President's ferroalloy's directive of November 29, 1982,
states that the upgrading program is to be continued on a
year-by-year basis through the 10-year term at the discretion
of the Assistant to the President for National Security
Affairs. This program is to be funded for at least the first
3 years by materials exchange using excess stockpile
materials.'
The first year's program was funded by exchanging excess tin.
GSA's proposal is to make solicitations to cover the next
2-year period through the use of a 1-year contract with an
option to renew for a second year at the same price. This
would simplify the extremely difficult contracting procedures
GSA has to use and we should support this concept. GSA
further proposes that we use about 6 million ounces of silver
as the medium of exchange for this follow-on portion of the
upgrading program. I have looked into the silver option at
great depth by having Judge Clark's office chair an
interagency meeting on silver disposals (currently, there is
a congressional prohibition against disposing of silver).
Right now, we cannot support GSA's plan to fund the
ferroalloys program by the exchange of silver--there are too
many Hill obstacles.
UNCLASSIFIED with
SECRET Attachment
UNCLASSIFIED with
2
SECRET Attachment
I therefore suggest that you sign the memorandum at Tab I to
GSA approving the next 2 years of the upgrading program with
the proviso that only those materials declared excess by
Congress (i.e., no silver at the present time) be used to pay
for this program. Your decision on this matter will allow me
to forward to you the final decision package on the
ferroalloy 232 case. (NOTE TO BOB KIMMITT: You might want
to run this through White House Counsel.)
RECOMMENDATION
That you sign the memorandum to GSA at Tab I.
Approve
Disapprove
Attachments
TAB I
Memo for GSA
TAB A
Incoming memo from GSA
TAB II
President's memo of November 29, 1982
UNCLASSIFIED with
SECRET Attachment
THE WHITE HOUSE
WASHINGTON
Date
3.16.84
Suspense Date
MEMORANDUM FOR:
John
FROM:
DIANNA G. HOLLAND
ACTION
Approved
Please handle/review
For your information
For your recommendation
For the files
Please see me
Please prepare response for
signature
X
As we discussed
Return to me for filing
COMMENT
ferroally
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1
year by 22 bin - h -
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Wayne Kulick
@
535- 7671
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- and natural plan - list of this will
buy attackment: - list of modities not
carridered needed
U.S. Department of Justice
Office of Legal Counsel
Office of the
Washington, D.C. 20530
Deputy Assistant Attorney General
GOT
1982
MEMORANDUM FOR HONORABLE FRED FIELDING
Counsel to the President
Re: Ferroalloy Investigation and Presidential Authority Under
§ 232 (b) of the Trade Expansion Act of 1962
You have asked this Office to provide you with our views
regarding four questions concerning the scope and flexibility
of the President's authority to adjust imports under § 232 (b)
of the Trade Expansion Act of 1962, as amended, 19 U.S.C.
$ 1862. The questions relate to a range of actions the
President might take in response to a "Report" he has received
from the Secretary of Commerce which contains a finding by
the Secretary that high carbon ferrochromium and high carbon
ferromanganese are "being imported into the United States in
such quantities or under such circumstances as to threaten
to impair the national security
" 19 U.S.C. § 1862(b).
The Report, in connection with this finding, recommends
to the President: (i) the upgrading to high carbon ferrochromium
and high carbon ferromanganese of chromite and manganese
ores currently held in the National Defense Stockpile (NDS),
an action to be taken pursuant to the Strategic and Critical
Materials Stock Piling Revision Act of 1979, 50 U.S.C. § 98
et. seq. (Stock Piling Act), and (ii) removal of high carbon
ferromanganese from the Generalized System of Preferences
(GSP) established under Title V of the Trade Act of 1974, 19
U.S.C. § 2461 et. seq. (1974 Trade Act). We conclude that
the President may exercise his authority under the Stock
Piling Act to upgrade the two ores and his authority under
the 1974 Trade Act to withdraw GSP status of high carbon
ferrochromium in response to a "national security" finding
under 19 U.S.C. § 1862 (b). We are also of the view that
such actions would satisfy the statutory requirement that
the President, unless he rejects the Secretary's finding,
"shall take such action, and for such time, as he deems
necessary to adjust the imports of such [ferroalloy]
SO that such imports will not threaten to impair the national
security
19 U.S.C. § 1862(b).
Our responses to your specific questions are as follows:
1. Whether upgrading ores in the National Defense Stockpile
into ferroalloys would be "action to adjust imports" authorized
by Section 232 of the Trade Expansion Act of 1962?
We are not aware that any Department has argued that
upgrading the ores in the NDS is, in this particular instance,
"action to adjust imports" authorized by § 232. To the
contrary, the Commerce Department Report recommends that the
stockpiling action be taken pursuant to the Stock Piling
Act. Although this Department has interpreted the President's
authority under § 232 extremely broadly in the past, see 43
Op. A.G. No. 3 (Jan. 14, 1975), and the legislative history
mentions stockpiling as an appropriate action 1/, we do not
believe that upgrading the stockpile is an action which
would be authorized by § 232 standing alone. In light of
the cautionary language in Federal Energy Administration V.
Algonquin SNG, Inc., 426 U.S. 548, 571 (1976), which warned
that "our conclusion here, fully supported by the relevant
legislative history, that the imposition of a license fee is
authorized by $ 232 (b) in no way compels the further conclusion
that any action the President might take as long as it has
even a remote impact on imports, is also SO authorized," we
see no reason to reach out unnecessarily to answer question
1 affirmatively since there is clear authority for the stock-
piling action under separate statutory authority.
1/ See 101 Cong. Rec. 5588 (1955) ("they will have at their
command the entire scope of tariffs, quotas, restrictions,
stockpiling, and any other variation of these programs")
(remarks of Senator Bennett); 101 Cong. Rec. 5299 1955) ("It
grants to the President authority to take whatever action he
deems necessary to adjust imports
....
He may use tariffs,
quotas, import taxes, or other methods of import restrictions.")
(remarks of Senator Milliken); S. Rep. No. 232, 84th Cong.,
lst Sess. 4 (1955) (President to have the authority to take
"whatever action is necessary to adjust imports").
- 2 -
2. If, by action under separate authority, the President
were to implement the two remedial actions (stockpiling and
GSP removal) recommended in the Section 232 Commerce Report,
would the requirement of Section 232 -- that action "to adjust
imports" be taken -- be satisfied.
As a preliminary matter, we would note that this question
need not be resolved if the President were to refrain at
this time from accepting or rejecting the "national security"
finding made in the Commerce Report. That is, the President
could take the two recommended remedial actions under independent
authority established in the Stock Piling Act and the 1974
Trade Act and simply postpone, in light of changed circumstances
that would exist at that point, his determination whether
the articles are being imported into the United States in
such a manner as to threaten to impair the national security.
Should the President, however, determine to affirm the
finding of the Secretary, we believe the requirements of
§ 232 would be satisfied. The only statutory requirement
imposed on the President by § 1862 (b) is that he "shall take
such action, and for such time, as he deems necessary to
adjust the imports of such article
SO that such imports
will not threaten to impair the national security
As
we understand the facts, by upgrading the NDS many domestic
producers of high carbon ferrochromium and ferromanganese
who might otherwise go out of business will remain economically
viable for the 10 year period during which the upgrading
would occur. Absent such a remedial measure, the failure of
these domestic producers would leave the country dependent
on imports of strategically critical ferroalloys. Necessarily
then, the President's action will have the result of adjusting
imports; the nation will rely less on imports of ferroalloys
if some domestic production continues. In addition, the
effect of removing high carbon ferromanganese from GSP treatment
would be analogous to the imposition of tariffs or fees,
which are accepted remedies for purposes of § 232. See FEA
V. Algonquin SNG, Inc., supra, 426 U.S. at 571. Presumably,
raising the price of imports of high carbon ferromanganese
would increase the demand for the domestically produced
article and thus "adjust imports" within the meaning of
§ 232.
- 3 -
The language, legislative history and purpose of § 232
indicate that the proposed remedial actions would satisfy
the President's obligations under § 232(b). As the Supreme
Court noted in FEA V. Algonquin SNG, Inc., supra, 426 at 561:
In authorizing the President to "take
such action and for such time, as he
deems necessary to adjust the import of
[an] article and its derivatives," the
language of § 232 (b) seems clearly to
grant him a measure of discretion in
determining the method to be used to
adjust imports. (emphasis added).
Nor has this Department ever questioned that the language in
§ 232 grants the President "the broadest flexibility" in
selecting actions "to adjust imports." 43 Op. A.G. No. 3, supra
at 5.
Section 232 of the Trade Expansion Act also instructs
the President to
give consideration to domestic production
needed for projected national defense
requirements, the capacity of domestic
industries to meet such requirements,
[as well as to] take into con-
sideration the impact of foreign compe-
tition on the economic welfare of indi-
vidual domestic industries; and any
substantial unemployment,
loss
of skills or investment, or other serious
effects resulting from the displacement
of any domestic products by excessive
imports
in determining whether
such weakening of our internal economy
may impair the national security.
19 U.S.C. § 1862 (c). Because the statutory language
specifically indicates that maintaining the viability of
domestic industries perceived to be critical to the national
security was a major purpose of § 232, we believe that the
proposed remedial actions - which would achieve the statutory
purpose of preserving domestic production of articles important
to the national security -- would "adjust imports" within the
meaning of § 232.
- 4 -
The legislative history of § 232 (b) and its predecessors 2/
similarly indicates that Congress wanted the President both
to address himself to the effects of imports on domestic
industries deemed critical to the national security 3/ and
to have broad powers to preserve domestic production needed
for national defense requirements. Indeed, Representative
Cooper, the floor manager of the bill containing § 232(b),
illustrated the meaning of that provision with an example
analogous to the present situation. He noted that the
Conferénce Report "emphasized that if the President sees fit
to stockpile critical materials under any other law, that act
may be taken wholly aside from the authority contained in
this amendment [final version of § 232 (b)]. Conversely,
action under the new provision may be taken wholly aside from
the authority contained in any other law." 101 Cong. Rec.
8160, citing H.R. Rep. No. 745, 84th Cong., lst. Sess. 7
(1955).
Representative Cooper further explained: "This
means that if the President should institute a stockpile
program which would successfully preserve the essential
domestic producing facilities in a sound condition and the
threat to the national security would thereby be eliminated,
there would be no necessity for limiting imports. The
President would not only retain flexibility as to the particular
2/ Section 232 (b) was originally enacted by Congress as § 7
of the Trade Agreement Extension Act of 1955, Pub. L. No. 84-
86 C. 169, 69 Stat. 166, and amended by § 8 of the Trade
Agreement Extension Act of 1958, Pub. L. 85-686, 72 Stat.
678.
3/ In directing the President to consider the domestic effects
of imports, § 232 contrasts with other statutes which delegate
powers to the President to deal with imports but instruct him
to focus primarily on international concerns. See, e.g., 19
U.S.C. § 2132 (correcting balance of payments disequilibria);
50 U.S.C. §§ 1701-06 (IEEPA).
- 5 -
measure which he deems appropriate to take, but, having taken
an action, he would retain flexibility with respect to the
continuation, modification, or suspension of any decision
that had been made." 101 Cong. Rec. 8160-61.
As noted above, Congress made no attempt to restrict the
options available to the President to adjust imports in
response to a national security finding under § 232. See
n.1 supra. (President authorized to take whatever action
he deems necessary). See also H.R. Rep. No. 1761, 85th Cong.
2d Sess. 13 (1958) (statute provides "those best able to judge
national security needs ... [with] a way of taking whatever
action is needed to avoid a threat to the national security
through imports"). We therefore conclude, based on the
language and legislative history of $ 232, that stockpiling
and removing the GSP status of the relevant ferroalloys under
independent statutory authorities are sufficient actions "to
adjust imports" in response to a national security finding
by the Secretary of Commerce.
Finally, we do not believe that either FEA V. Algonquin
SNG, Inc. supra, or Independent Gasoline Marketers Council
V. Duncan, 492 F. Supp. 614 (D.C.D.C. 1980), establish that
these actions would be a legally insufficient response to
the finding. In upholding the President's authority to
impose a license fee system under $ 232(b), the Court's
opinion in Algonquin repeatedly cited to expressions from
Congress and the Executive Branch reflecting their understanding
of the broad scope of authority granted to the President by
the language of $ 232 (b). See 426 U.S. at 564-70. The
Court's final caveat that neither its holding nor the legisla-
tive history "compels the further conclusion that any action
the President might take, as long as it has even a remote
impact on imports, is also SO authorized," 426 U.S. at 571,
is simply not applicable in the present instance because we
do not deal here with the coercive regulation of private
enterprise that was an underlying concern in the Algonquin
case.
4/ See also Hearings on Trade Agreements Extension (H.R.
1), before the House Comm. On Ways and Means, 84th Cong
1st Sess. (1955); Hearings on Trade Agreements Extension
(H.R. 1), before the Senate Comm. on Finance, 84th Cong.
1st Sess. (1955).
- 6 -
The present actions are also similarly distinguishable
from the Petroleum Import Adjustment Program (PIAP) that was
created in response to a national security finding concerning
oil imports, and was successfully challenged in Independent
Gasoline Marketers Council V. Duncan, supra. The PIAP license-
fee system was a demand-side disincentive, ultimately designed
to fall on consumers of gasoline rather than users of home
heating oil. It imposed a gasoline conservation fee on
refiners of both domestic and imported crude.oil. The court
determined that the PIAP system was structured to lower
demand for oil generally rather than demand for imports in
particular. The court explained the remoteness of the program's
effect on imports as follows:
First, the quantitative impact of the
program on import levels will admittedly
be slight. Second, the program imposes
broad controls on domestic goods to
achieve that slight impact. Third,
Congress has thus far denied the President
authority to reduce gasoline consumption
through a gasoline conservation levy.
PIAP is an attempt to circumvent
that stumbling block in the guise
of an import control measure. TEA
alone does not sanction this attempt
to exercise authority that has been
deliberatively withheld from the
President by the Congress.
492 F. Supp. at 618. The PIAP system clearly was the type of
Presidential action that the Supreme Court had warned was not
authorized by § 232 in the Algonquin case.
In contrast to the PIAP system, the proposed remedial
actions for ferroalloys in no way penalize domestic industries;
rather, the stockpiling action aids them. More importantly,
these actions do not constitute coercive regulation taken
pursuant to the Act. The removal of GSP status for ferroman-
ganese also discriminates between imports and domestic goods,
in conformity with the requirements of $ 232. Further, the
President would not be relying on § 232 to accomplish indirectly
an action that Congress had not authorized him to undertake
directly. Accordingly, we conclude that the proposed remedial
actions would satisfy the requirements of $ 232.
- 7 -
3. If, by independent action and under separate authority,
the President implements the two remedial actions (stockpiling
and GSP removal) recommended in the Section 232 Commerce Report,
can the President then either take no action on the report at
this point or return the report to Commerce for further
consideration in light of the remedies taken? What effect
would such action have on the other eleven ferroalloys for
which there were no positive findings?
Section 232(b), as explained above, requires the President
either: (1) to take such action, and for such time, as he
deems necessary to adjust imports SO as to remove the threat
to the national security; or (2) to reject the finding of
the Secretary of Commerce that imports threaten to impair
the national security. 19 U.S.C. § 1862(b). No time frame
constrains the President. Moreover, as this Department has
previously indicated, the statutory language and relevant
legislative history contemplate a continuing course of action,
with the possibility of future modifications. 43 Op. A.G.
No. 3 at 2-3 (Jan. 14, 1975). As noted in a Commerce
Department memorandum, the constant monitoring contemplated
by § 232 encompasses not only a review of factual circumstances
Representative Cooper, floor manager of the bill which
adopted § 232 (b), commented:
"The President would not only retain
flexibility as to the particular
measure which he deems appropriate to
take, but, having taken an action,
he would retain flexibility with
respect to the continuation, modifi-
cation, or suspension of any decision
that had been made."
101 Cong. Rec. 8160-61 (1955). The Conference Report on the
bill also stated with reference to § 232 (b) that "it is
...
the understanding of all the conferees that the authority
granted to the President under this provision is a continuing
authority
H. Rep. No. 745, 84th Cong. lst. Sess. 7
(1955).
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to determine whether a particular remedy is effective, but
also a review to determine whether the initial finding of a
threat to the national security remains valid. Memorandum to
H.P. Goldfield, Associate Counsel to the President, from
Irving P. Margulies, Deputy General Counsel, Re: Ferroalloy
Investigation at 2 (Sept. 8, 1982). Thus, we see no reason
why the President may not retain the Report for further
consideration in light of the actions he will have taken
under independent statutory authority. Similarly, we see no
reason why he may not return the report to the Commerce
Department for further evaluation given the changed circum-
stances resulting from the actions he will have undertaken.
You have further inquired whether either of these actions
would affect the eleven ferroalloys for which no positive national
security finding was made. The only potential effect we have
been able to identify is whether the President or Secretary
of Commerce would be required to publish the Report of the
investigation and findings. Section 232(d) requires that:
A report shall be made and published
upon the disposition of each request,
application, or motion under subsection
(b) of this section. The Secretary
shall publish procedural regulations to
give effect to the authority conferred
on him by subsection (b) of this section.
The Commerce Department regulations promulgated thereunder
state that:
The report, excluding the sections
containing national security classified
and business confidential information
amd material, shall be published in the
Federal Register upon the disposition
of each request, application, or motion
made pursuant to [§ 232]. 15 C.F.R.
§ 359.10 (c).
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The President's decision either to retain the Report for
further study or to return it to the Commerce Department for
further evaluation would not constitute a final disposition
of the § 232 application by the Ferroalloys Association.
Consequently, no publication requirement would be triggered.
4. Whether GSP eligibility may be withdrawn under Section 232
of the Trade Expansion Act, without the President (i) considering
the factors required in Section 504 (a) of the Trade Act of
1974, and (ii) issuing an Executive Order. overriding the
previous Executive order under which GSP status was granted
to the product?
We are unaware that any Department presently contends
that GSP eligibility should be withdrawn under § 232 of the
Trade Expansion Act. The consensus has been that withdrawal of
duty-free treatment for high carbon ferromanganese should be
implemented under the authority of $ 504 of the Trade Act of
1974, 19 U.S.C. § 2464. Two reasons supported this consensus.
First, § 503 of the Trade Act of 1974 provides that whenever
an article is the subject of any action proclaimed under
§ 232, that article will not be eligible for GSP status. 19
U.S.C. § 2463 (c) (2). We understand that there was a policy
disagreement as to whether removal of GSP status was therefore
a necessary concomitant of other import-adjusting action
under § 232, or whether removal of GSP status alone would suffice
to adjust imports under § 232. Second, even if withdrawal of
GSP status alone were action authorized by $ 232, this deter-
mination would not establish that the President- had acted
solely under the authority of § 232 with respect to high
carbon ferrochromium, which has no GSP status. One would
still have to rely on the proposition that action to "adjust
imports" as contemplated by $ 232 could be taken under separate
authority were the President to stockpile high carbon ferrochromium
under the Stock Piling Act.
Assuming that withdrawal of GSP status can be demonstrated
to adjust imports sufficiently directly SO as to constitute
action under § 232, we do not believe the President is required
to consider the factors mentioned in § 504 (a) of the Trade
Act of 1974. (The factors are set forth in 19 U.S.C. §§ 2461,
2462(c)). Those factors, which focus on economic interactions
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between developed and developing countries, are relevant to
withdrawal of GSP treatment under the Trade Act of 1974;
they have no bearing on actions taken under § 232 of the
Trade Expansion Act to address threats to the national secu-
rity. We are of the view, however, that should the President
remove GSP treatment of ferromanganese he would be required
to issue an Executive Order overriding the earlier Executive
Order, issued pursuant to 19 U.S.C. § 2463 (b), which had
designated high carbon ferromanganese to be eligible for GSP
treatment.
Jan Line
Larry L. Simms
Deputy Assistant Attorney General
Office Of Legal Counsel
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