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{
    "localId": "1554456",
    "label": "Puerto Rico - Compact of Permanent Union, November 7, 1975",
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{
    "id": "1554456",
    "sourceUrl": "https://catalog.archives.gov/id/1554456",
    "contentType": "document",
    "title": "Puerto Rico - Compact of Permanent Union, November 7, 1975",
    "citationUrl": "https://catalog.archives.gov/id/1554456",
    "collections": [
        "White House Special Files Unit Files",
        "Issue Decision Papers for the President"
    ],
    "subjects": [
        "Puerto Rico",
        "Intergovernmental relations",
        "Territories and possessions"
    ],
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        "day": 14,
        "logicalDate": "1976-01-14",
        "month": 1,
        "year": 1976
    },
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        "logicalDate": "1975-10-01",
        "month": 10,
        "year": 1975
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{
    "seq": 49,
    "pageIndex": 0,
    "type": "photo",
    "url": "https://s3.amazonaws.com/NARAprodstorage/lz/presidential-libraries/ford/grf-0010/569572/1554456/1554456_Page_50_Image_0001.jpg",
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    "ocrText": "- 9 -\nThere are practical problems in maintaining free trade between\ntwo areas with different external tariffs. A major difficulty lies\nin preventing goods from being imported into the area with the lower\ntariff for re-exportation to the high tariff area, thereby avoiding\nthe latter's higher tariffs. To some degree this problem is miti-\ngated by rules of origin and other regulations, but loopholes\nalways remain.\nSection 9(e) of the proposed compact would attempt to deal\nwith this problem by requiring that 35 percent of value of an\nimported product be added in Puerto Rico before it can be shipped\nto the United States. This is similar to the rule of origin appli-\ncable to our Generalized System of Preferences (GSP), which was\nauthorized by the Trade Act of 1974. However, the GSP provisions\ncontain built-in safeguards, e.g., the tariff preferences are\napplicable only to nonsensitive products, and are subject to a\n$25 million limit. Escape clause relief is available if such\nimports cause or threaten injury. None of these safeguards would\napply to Puerto Rico under the compact. Thus, goods could be\nimported into Puerto Rico, processed sufficiently to meet the\n35 percent rule, and then exported to the United States duty free\nwithout limitation. The absence of safeguards, or of any other\nmeasures to prevent injury to U. S. producers, makes the proposal\nunacceptable on practical as well as policy grounds.\nSubsection (d) would also provide that \"Puerto Rico shall\ncontinue to enjoy the right to levy tariffs upon or otherwise to\nrestrict the import of coffee from foreign countries or the United\nStates. \" However, under current law, Puerto Rico has authority\nonly to impose duties on imports of coffee from foreign countries\nor from the United States if the coffee is grown in a foreign coun-\ntry. 19 U.S.C. 1319. The Department is opposed to this provision\nto the extent that it would modify existing law.\nFinally, with regard to customs procedures, the Department is\nuncertain of the overall applicability of section 2(b) and section\n3(b) to duty on vessel repairs (19 U.S.C. 1466) and tonnage tax\n(46 U.S.C. 121 and 128) , and of the applicability of the Outer\nContinental Shelf Lands Act and the Deepwater Ports Act of 1974.\nSection 12\nSection 12(a) would provide that the laws of the United\nStates applicable to the Free Associated State shall continue in\neffect except to the extent repealed or modified by the compact,\nor incompatible with it."
}