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    "localId": "1535319",
    "label": "1976/11/09 - Economic Policy Board",
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    "id": "1535319",
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    "contentType": "document",
    "title": "1976/11/09 - Economic Policy Board",
    "description": "This file contains information pertaining to the GATT ruling on DISC.",
    "citationUrl": "https://catalog.archives.gov/id/1535319",
    "collections": [
        "James M. Cannon Files (Ford Administration)",
        "James Cannon's Meetings Files"
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    "subjects": [
        "Commerce",
        "Taxation"
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    "seq": 1,
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    "type": "document",
    "url": "https://s3.amazonaws.com/NARAprodstorage/lz/presidential-libraries/ford/grf-0039/635913/1535319.pdf",
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    "ocrText": "The original documents are located in Box 62, folder \"1976/11/09 - Economic Policy Board\"\nof the James M. Cannon Files at the Gerald R. Ford Presidential Library.\nCopyright Notice\nThe copyright law of the United States (Title 17, United States Code) governs the making of\nphotocopies or other reproductions of copyrighted material. Gerald Ford donated to the United\nStates of America his copyrights in all of his unpublished writings in National Archives collections.\nWorks prepared by U.S. Government employees as part of their official duties are in the public\ndomain. The copyrights to materials written by other individuals or organizations are presumed to\nremain with them. If you think any of the information displayed in the PDF is subject to a valid\ncopyright claim, please contact the Gerald R. Ford Presidential Library.\nDigitized from Box 62 of the James M. Cannon Files at the Gerald R. Ford Presidential Library\nNovember 5, 1976\nECONOMIC POLICY BOARD\nEXECUTIVE COMMITTEE\nProposed Agenda\nMonday, November 8, 1976\n1. Report of Task Forces to Improve\nMacAvoy\nGovernment Regulation\n2. Small Dollar Coin\nTreasury\nJMC\nTuesday, November 9, 1976 STRICTLY PRINCIPALS ONLY\nNOTE\n1. Review of Economic Intelligence\nCIA\nWednesday, November 10, 1976\nNo Executive Committee Meeting\nThursday, November 11, 1976\nNo Executive Committee Meeting\nFriday, November 12, 1976\nNo Executive Committee Meeting\nR.\nFORD\nNovember 5, 1976\nME\nEPB\nECONOMIC POLICY BOARD\nEXECUTIVE COMMITTEE\nProposed Agenda\nMonday, November 8, 1976\n1. Report of Task Forces to Improve\nMacAvoy\nGovernment Regulation\n2. Small Dollar Coin\nTreasury\nTuesday, November 9, 1976 STRICTLY PRINCIPALS ONLY\n1. Review of Economic Intelligence\nCIA\nWednesday, November 10, 1976\nNo Executive Committee Meeting\nThursday, November 11, 1976\nNo Executive Committee Meeting\nFriday, November 12, 1976\nNo Executive Committee Meeting\nLIGARER GERALD R. FORD\nEYES ONLY\nMINUTES OF THE\nECONOMIC POLICY BOARD\nEXECUTIVE COMMITTEE MEETING\nNovember 5, 1976\nAttendees: Simon, Seidman, Lynn, Greenspan, Usery, Dent\nMalkiel, MacAvoy, Darman, Porter, Penner\nPerritt, Hormats, Quern, Juntz\n1. World Economic Outlook\nThe Executive Committee reviewed a paper, prepared by\nthe CEA, on the current world economic situation. The\ndiscussion focused on the policies of recovery in the U.S.,\nFederal Republic of Germany, and Japan, the mix of fiscal\nand monetary adjustment policies in most industrialized\nnations and the inflationary and balance of payments\noutlook as well as the impact of an OPEC oil price\nincrease.\nThe Executive Committee agreed that a discussion of the\nworld economic outlook should be included in both the\nCEA annual report and the CIEP annual report.\n2. Trade Policy Status Report\nThe Executive Committee discussed the GATT finding on\nDISC and on several similar practices by EC countries as\noutlined in a memorandum from Ambassador Dent which is\nattached.\nThe Executive Committee also discussed the lack of a\nfavorable EC response on the poultry-cognac issue and\nalternative measures the Administration might take in\nresponse.\nDecision\nThe Executive Committee approved Ambassador Dent's recommen-\ndation to issue a press release today on the GATT finding on\nDISC.\n3. Other\nThe Executive Committee discussed the suggestion of preparing\na document on the unfinished business of the EPB.\nDecision\nExecutive Committee members were requested to provide\nMr. Seidman's office with their comments on what they viewed\nas the unfinished business of the EPB and policy issues which\nneeded to be addressed during the coming months.\nEYES ONLY\nRBP\ngit ALD FORD\nTHE SPECIAL REPRESENTATIVE FOR\nTRADE NEGOTIATIONS\nWASHINGTON\nMEMORANDUM\nTO:\nMembers of the Economic Policy Board\nFROM:\nAmbassador Frederick B. Dent\nSUBJECT: GATT Finding on the DISC\nWe have been informed by cable that the GATT panels\non DISC and related tax practices have issued their reports\ndeclaring DISC and the tax practices of France, Belgium,\nand the Netherlands all to be in violation of the GATT\nsubsidy rules. This information, although officially\n\"restricted\" by the GATT Secretariat, is leaking rapidly\nto the United States and foreign press. Accordingly, I\nbelieve that an announcement by the Administration is\nneeded urgently to correct public misimpressions and to\nallay business uncertainty about the effect of the findings\nupon the DISC legislation. Therefore, I propose that the\nAdministration take the steps described below in response\nto the GATT findings:\n1. My Office proposes to issue a press release\ntoday.\n2. At the meeting of the GATT Council on November 12,\nwe shall state that while we have not yet had time to study\nthe panel reports in detail or to prepare a full response\nto their substance, we note that longstanding tax practices\nof several contracting parties have been found to violate\nthe GATT, and that this fact underscores the importance\nof discussing multilaterally the possible revision of\ninternational rules as they pertain to national income tax\npractices that affect international trade. We also\nintend to ask the GATT Council to approve the public release\nof the panel reports, because those reports are certain to\nleak piecemeal in any event.\nFORD is GERALD LIBRARY\n- 2 -\n3. After preparing our position for the GATT Council,\nwe expect to analyze the reports in detail, and to conduct\nappropriate Congressional briefings.\n4. I expect to report on the panel findings, and the\npreliminary United States response thereto, at the upcoming\nmeetings of our private sector trade advisory committees.\nThe Industry Policy Advisory Committee meets November 10,\nthe Agricultural Policy Advisory Committee meets November 11,\nand the overall Advisory Committee for Trade Negotiations,\nNovember 16. In addition, we expect to report on the\npanel findings to the President's Export Council meeting on\nDecember 7.\n5. After analyzing the reports and conducting\nnecessary briefings, we propose that representatives of\nSTR and Treasury consult with representatives of Belgium,\nFrance and the Netherlands, and the EC Commission, in order\nto discuss our assessments of the panel findings and our\nintentions with respect to subsequent action. As an example\nof such subsequent action, we expect discusssions of the\nGATT subsidy rules, including national income tax practices\naffecting trade, to intensify in the context of the\nMultilateral Trade Negotiations.\n6. In each of these contexts, we would propose at\nthis stage to take the position that pending a satisfactory\ninternational resolution of this problem, no change in\nUnited States law or policy with respect to the DISC is\ncontemplated or expected by this Administration.\nFORD & LIBRARY\nEYES ONLY\nINFORMATION\nMINUTES OF THE\nECONOMIC POLICY BOARD\nEXECUTIVE COMMITTEE MEETING\nNovember 5, 1976\nAttendees: Simon, Seidman, Lynn, Greenspan, Usery, Dent\nMalkiel, MacAvoy, Darman, Porter, Penner\nPerritt, Hormats, Quern, Juntz\n1. World Economic Outlook\nThe Executive Committee reviewed a paper, prepared by\nthe CEA, on the current world economic situation. The\ndiscussion focused on the policies of recovery in the U.S.,\nFederal Republic of Germany, and Japan, the mix of fiscal\nand monetary adjustment policies in most industrialized\nnations and the inflationary and balance of payments\noutlook as well as the impact of an OPEC oil price\nincrease.\nThe Executive Committee agreed that a discussion of the\nworld economic outlook should be included in both the\nCEA annual report and the CIEP annual report.\n2. Trade Policy Status Report\nThe Executive Committee discussed the GATT finding on\nDISC and on several similar practices by EC countries as\noutlined in a memorandum from Ambassador Dent which is\nattached.\nThe Executive Committee also discussed the lack of a\nfavorable EC response on the poultry-cognac issue and\nalternative measures the Administration might take in\nresponse.\nDecision\nThe Executive Committee approved Ambassador Dent's recommen-\ndation to issue a press release today on the GATT finding on\nDISC.\n3. Other\nThe Executive Committee discussed the suggestion of preparing\na document on the unfinished business of the EPB.\nDecision\nExecutive Committee members were requested to provide\nMr. Seidman's office with their comments on what they viewed\nas the unfinished business of the EPB and policy issues which\nneeded to be addressed during the coming months.\nEYES ONLY\nRBP\n8LD R. FORD LIBR\nTHE SPECIAL REPRESENTATIVE FOR\nTRADE NEGOTIATIONS\nWASHINGTON\nMEMORANDUM\nTO:\nMembers of the Economic Policy Board\nFROM:\nAmbassador Frederick B. Dent\nSUBJECT: GATT Finding on the DISC\nWe have been informed by cable that the GATT panels\non DISC and related tax practices have issued their reports\ndeclaring DISC and the tax practices of France, Belgium,\nand the Netherlands all to be in violation of the GATT\nsubsidy rules. This information, although officially\n\"restricted\" by the GATT Secretariat, is leaking rapidly\nto the United States and foreign press. Accordingly, I\nbelieve that an announcement by the Administration is\nneeded urgently to correct public misimpressions and to\nallay business uncertainty about the effect of the findings\nupon the DISC legislation. Therefore, I propose that the\nAdministration take the steps described below in response\nto the GATT findings:\n1. My Office proposes to issue a press release\ntoday.\n2. At the meeting of the GATT Council on November 12,\nwe shall state that while we have not yet had time to study\nthe panel reports in detail or to prepare a full response\nto their substance, we note that longstanding tax practices\nof several contracting parties have been found to violate\nthe GATT, and that this fact underscores the importance\nof discussing multilaterally the possible revision of\ninternational rules as they pertain to national income tax\npractices that affect international trade. We also\nintend to ask the GATT Council to approve the public release\nof the panel reports, because those reports are certain to\nleak piecemeal in any event.\nLIBRAST GERALD R. FORD\n- 2 -\n3. After preparing our position for the GATT Council,\nwe expect to analyze the reports in detail, and to conduct\nappropriate Congressional briefings.\n4. I expect to report on the panel findings, and the\npreliminary United States response thereto, at the upcoming\nmeetings of our private sector trade advisory committees.\nThe Industry Policy Advisory Committee meets November 10,\nthe Agricultural Policy Advisory Committee meets November 11,\nand the overall Advisory Committee for Trade Negotiations,\nNovember 16. In addition, we expect to report on the\npanel findings to the President's Export Council meeting on\nDecember 7.\n5. After analyzing the reports and conducting\nnecessary briefings, we propose that representatives of\nSTR and Treasury consult with representatives of Belgium,\nFrance and the Netherlands, and the EC Commission, in order\nto discuss our assessments of the panel findings and our\nintentions with respect to subsequent action. As an example\nof such subsequent action, we expect discussions of the\nGATT subsidy rules, including national income tax practices\naffecting trade, to intensify in the context of the\nMultilateral Trade Negotiations.\n6. In each of these contexts, we would propose at\nthis stage to take the position that pending a satisfactory\ninternational resolution of this problem, no change in\nUnited States law or policy with respect to the DISC is\ncontemplated or expected by this Administration.\nLIBRARY GERALD R. FORD"
}