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This file contains information pertaining to the GATT ruling on DISC.
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1535319
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1976/11/09 - Economic Policy Board
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1535319
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document
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1976/11/09 - Economic Policy Board
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This file contains information pertaining to the GATT ruling on DISC.
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James M. Cannon Files (Ford Administration)
James Cannon's Meetings Files
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Commerce
Taxation
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1976-11-30
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11
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1976
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1976-11-01
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1976
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The original documents are located in Box 62, folder "1976/11/09 - Economic Policy Board"
of the James M. Cannon 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 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States of America his copyrights in all of his unpublished writings in National Archives collections.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 62 of the James M. Cannon Files at the Gerald R. Ford Presidential Library
November 5, 1976
ECONOMIC POLICY BOARD
EXECUTIVE COMMITTEE
Proposed Agenda
Monday, November 8, 1976
1. Report of Task Forces to Improve
MacAvoy
Government Regulation
2. Small Dollar Coin
Treasury
JMC
Tuesday, November 9, 1976 STRICTLY PRINCIPALS ONLY
NOTE
1. Review of Economic Intelligence
CIA
Wednesday, November 10, 1976
No Executive Committee Meeting
Thursday, November 11, 1976
No Executive Committee Meeting
Friday, November 12, 1976
No Executive Committee Meeting
R.
FORD
November 5, 1976
ME
EPB
ECONOMIC POLICY BOARD
EXECUTIVE COMMITTEE
Proposed Agenda
Monday, November 8, 1976
1. Report of Task Forces to Improve
MacAvoy
Government Regulation
2. Small Dollar Coin
Treasury
Tuesday, November 9, 1976 STRICTLY PRINCIPALS ONLY
1. Review of Economic Intelligence
CIA
Wednesday, November 10, 1976
No Executive Committee Meeting
Thursday, November 11, 1976
No Executive Committee Meeting
Friday, November 12, 1976
No Executive Committee Meeting
LIGARER GERALD R. FORD
EYES ONLY
MINUTES OF THE
ECONOMIC POLICY BOARD
EXECUTIVE COMMITTEE MEETING
November 5, 1976
Attendees: Simon, Seidman, Lynn, Greenspan, Usery, Dent
Malkiel, MacAvoy, Darman, Porter, Penner
Perritt, Hormats, Quern, Juntz
1. World Economic Outlook
The Executive Committee reviewed a paper, prepared by
the CEA, on the current world economic situation. The
discussion focused on the policies of recovery in the U.S.,
Federal Republic of Germany, and Japan, the mix of fiscal
and monetary adjustment policies in most industrialized
nations and the inflationary and balance of payments
outlook as well as the impact of an OPEC oil price
increase.
The Executive Committee agreed that a discussion of the
world economic outlook should be included in both the
CEA annual report and the CIEP annual report.
2. Trade Policy Status Report
The Executive Committee discussed the GATT finding on
DISC and on several similar practices by EC countries as
outlined in a memorandum from Ambassador Dent which is
attached.
The Executive Committee also discussed the lack of a
favorable EC response on the poultry-cognac issue and
alternative measures the Administration might take in
response.
Decision
The Executive Committee approved Ambassador Dent's recommen-
dation to issue a press release today on the GATT finding on
DISC.
3. Other
The Executive Committee discussed the suggestion of preparing
a document on the unfinished business of the EPB.
Decision
Executive Committee members were requested to provide
Mr. Seidman's office with their comments on what they viewed
as the unfinished business of the EPB and policy issues which
needed to be addressed during the coming months.
EYES ONLY
RBP
git ALD FORD
THE SPECIAL REPRESENTATIVE FOR
TRADE NEGOTIATIONS
WASHINGTON
MEMORANDUM
TO:
Members of the Economic Policy Board
FROM:
Ambassador Frederick B. Dent
SUBJECT: GATT Finding on the DISC
We have been informed by cable that the GATT panels
on DISC and related tax practices have issued their reports
declaring DISC and the tax practices of France, Belgium,
and the Netherlands all to be in violation of the GATT
subsidy rules. This information, although officially
"restricted" by the GATT Secretariat, is leaking rapidly
to the United States and foreign press. Accordingly, I
believe that an announcement by the Administration is
needed urgently to correct public misimpressions and to
allay business uncertainty about the effect of the findings
upon the DISC legislation. Therefore, I propose that the
Administration take the steps described below in response
to the GATT findings:
1. My Office proposes to issue a press release
today.
2. At the meeting of the GATT Council on November 12,
we shall state that while we have not yet had time to study
the panel reports in detail or to prepare a full response
to their substance, we note that longstanding tax practices
of several contracting parties have been found to violate
the GATT, and that this fact underscores the importance
of discussing multilaterally the possible revision of
international rules as they pertain to national income tax
practices that affect international trade. We also
intend to ask the GATT Council to approve the public release
of the panel reports, because those reports are certain to
leak piecemeal in any event.
FORD is GERALD LIBRARY
- 2 -
3. After preparing our position for the GATT Council,
we expect to analyze the reports in detail, and to conduct
appropriate Congressional briefings.
4. I expect to report on the panel findings, and the
preliminary United States response thereto, at the upcoming
meetings of our private sector trade advisory committees.
The Industry Policy Advisory Committee meets November 10,
the Agricultural Policy Advisory Committee meets November 11,
and the overall Advisory Committee for Trade Negotiations,
November 16. In addition, we expect to report on the
panel findings to the President's Export Council meeting on
December 7.
5. After analyzing the reports and conducting
necessary briefings, we propose that representatives of
STR and Treasury consult with representatives of Belgium,
France and the Netherlands, and the EC Commission, in order
to discuss our assessments of the panel findings and our
intentions with respect to subsequent action. As an example
of such subsequent action, we expect discusssions of the
GATT subsidy rules, including national income tax practices
affecting trade, to intensify in the context of the
Multilateral Trade Negotiations.
6. In each of these contexts, we would propose at
this stage to take the position that pending a satisfactory
international resolution of this problem, no change in
United States law or policy with respect to the DISC is
contemplated or expected by this Administration.
FORD & LIBRARY
EYES ONLY
INFORMATION
MINUTES OF THE
ECONOMIC POLICY BOARD
EXECUTIVE COMMITTEE MEETING
November 5, 1976
Attendees: Simon, Seidman, Lynn, Greenspan, Usery, Dent
Malkiel, MacAvoy, Darman, Porter, Penner
Perritt, Hormats, Quern, Juntz
1. World Economic Outlook
The Executive Committee reviewed a paper, prepared by
the CEA, on the current world economic situation. The
discussion focused on the policies of recovery in the U.S.,
Federal Republic of Germany, and Japan, the mix of fiscal
and monetary adjustment policies in most industrialized
nations and the inflationary and balance of payments
outlook as well as the impact of an OPEC oil price
increase.
The Executive Committee agreed that a discussion of the
world economic outlook should be included in both the
CEA annual report and the CIEP annual report.
2. Trade Policy Status Report
The Executive Committee discussed the GATT finding on
DISC and on several similar practices by EC countries as
outlined in a memorandum from Ambassador Dent which is
attached.
The Executive Committee also discussed the lack of a
favorable EC response on the poultry-cognac issue and
alternative measures the Administration might take in
response.
Decision
The Executive Committee approved Ambassador Dent's recommen-
dation to issue a press release today on the GATT finding on
DISC.
3. Other
The Executive Committee discussed the suggestion of preparing
a document on the unfinished business of the EPB.
Decision
Executive Committee members were requested to provide
Mr. Seidman's office with their comments on what they viewed
as the unfinished business of the EPB and policy issues which
needed to be addressed during the coming months.
EYES ONLY
RBP
8LD R. FORD LIBR
THE SPECIAL REPRESENTATIVE FOR
TRADE NEGOTIATIONS
WASHINGTON
MEMORANDUM
TO:
Members of the Economic Policy Board
FROM:
Ambassador Frederick B. Dent
SUBJECT: GATT Finding on the DISC
We have been informed by cable that the GATT panels
on DISC and related tax practices have issued their reports
declaring DISC and the tax practices of France, Belgium,
and the Netherlands all to be in violation of the GATT
subsidy rules. This information, although officially
"restricted" by the GATT Secretariat, is leaking rapidly
to the United States and foreign press. Accordingly, I
believe that an announcement by the Administration is
needed urgently to correct public misimpressions and to
allay business uncertainty about the effect of the findings
upon the DISC legislation. Therefore, I propose that the
Administration take the steps described below in response
to the GATT findings:
1. My Office proposes to issue a press release
today.
2. At the meeting of the GATT Council on November 12,
we shall state that while we have not yet had time to study
the panel reports in detail or to prepare a full response
to their substance, we note that longstanding tax practices
of several contracting parties have been found to violate
the GATT, and that this fact underscores the importance
of discussing multilaterally the possible revision of
international rules as they pertain to national income tax
practices that affect international trade. We also
intend to ask the GATT Council to approve the public release
of the panel reports, because those reports are certain to
leak piecemeal in any event.
LIBRAST GERALD R. FORD
- 2 -
3. After preparing our position for the GATT Council,
we expect to analyze the reports in detail, and to conduct
appropriate Congressional briefings.
4. I expect to report on the panel findings, and the
preliminary United States response thereto, at the upcoming
meetings of our private sector trade advisory committees.
The Industry Policy Advisory Committee meets November 10,
the Agricultural Policy Advisory Committee meets November 11,
and the overall Advisory Committee for Trade Negotiations,
November 16. In addition, we expect to report on the
panel findings to the President's Export Council meeting on
December 7.
5. After analyzing the reports and conducting
necessary briefings, we propose that representatives of
STR and Treasury consult with representatives of Belgium,
France and the Netherlands, and the EC Commission, in order
to discuss our assessments of the panel findings and our
intentions with respect to subsequent action. As an example
of such subsequent action, we expect discussions of the
GATT subsidy rules, including national income tax practices
affecting trade, to intensify in the context of the
Multilateral Trade Negotiations.
6. In each of these contexts, we would propose at
this stage to take the position that pending a satisfactory
international resolution of this problem, no change in
United States law or policy with respect to the DISC is
contemplated or expected by this Administration.
LIBRARY GERALD R. FORD