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Records of the Office of Counsel to the President (Reagan Administration)
John Roberts' Subject Files
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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: JGR/Textiles (5 of 6)
Box: 55
To see more digitized collections visit:
https://reaganlibrary.gov/archives/digital-library
To see all Ronald Reagan Presidential Library inventories visit:
https://reaganlibrary.gov/document-collection
Contact a reference archivist at: [email protected]
Citation Guidelines: https://reaganlibrary.gov/citing
National Archives Catalogue: https://catalog.archives.gov/
Textile imports
interin automatic ? make = tolaterols 27 have]
30/20 can -> no what damage
unthorization of chipmter
Look at other fators ster insuring all.
min
level: sp to x,
lawnit caplication
x+1 often asking
- antiste 3: name nt and MFA
(ant anthoription system
(Greese until realized)
[by 3]
THE WHITE HOUSE
WASHINGTON
Pursuant to Sect
MEMORANDUM TO: THE SECRETARY OF STATE
THE SECRETARY OF TREASURY
THE SECRETARY OF COMMERCE
THE SECRETARY OF LABOR
THE U.S. TRADE REPRESENTATIVE
I have determined that the actions directed to be taken by the
Committee for the Implementation of Textile Agreements (CITA),
in this memorandum are necessary to implement U.S. rights under
the Multifiber Arrangement (MFA) and related bilateral trade
agreements. I am, therefore, authorizing CITA, under Section 1 (c)
of Executive Order 11652 of March 3, 1972 as amended, to take such
actions. These actions will be taken pursuant to Section 204 of
the Agricultural Act of 1956 which provides authority to implement
textile agreements, and Executive Order 11651 in which authority
to perform certain actions with respect to these agreements has
been delegated to CITA.
Under the MFA and our bilateral textile agreements, the United
States is authorized to take action affecting imports in cases
of market disruption or the threat of market disruption.
As a consequence of increasing imports of textile and textile
products from low-wage countries, there has been increasing
disruption and threat of disruption to the U.S. textile and
apparel industry. As provided in Section 204 and our interna-
tional agreements, and in order to avoid further disruption
to the U.S. textile and apparel industry which is damaged or
threatened with damage from imports coming from these low-wage
countries, I am directing CITA to take the following actions:
(1) CITA will issue calls, which limit imports,
on growing low-wage suppliers in any product
or category when total growth in imports in
that product or category is more than 30
or spring controls
for specific predent
percent in the most recent year ending or the
total growth in imports would lead to an
import to domestic production ratio of 20
percent or more. These calls will be made only
on any growing low-wage supplier when
imports from any such supplier reach the
greater of 1 percent of total imports or
the minimum consultation level in that
product or category.
i
(2) The Government will issue calls, which limit
imports, on growing low-wage suppliers in any
product or category already import impacted,
that is, in which imports exceed 20 percent of
U.S. production in that category. In taking
these actions, the Government will call all
growing low-wage suppliers that have greater
than the higher of the minimum consultation
level or 1 percent of total imports in any
category.
(3) With respect to Hong Kong, Taiwan and Korea,
E-system calls on each supplier will be made on
any product or category when E's issued in that
particular product or category reaches 65 percent
of the Maximum Formula Level [MFL], and in the
opinion of the Chairman of CITA would exceed the
MFL if not called, and is in a category with an
import to production (I/P) ratio of 20 percent
or more, OT total imports or anticipated total
imports would increase the I/P.
(4) Once any category is restricted after consulta-
tions under the textile import program, CITA
shall take action to onsure that it shall remain
under control for the life of the bilatera
agreement that governt our textile relations
with the called count V.
Market disruption cr the threat thereof may occur under circum-
stances other than those referred to above. CITA will continue
to carefully monitor all textile and apparel imports and their
impact on the U.S. textile and apparel industry, and where market
disruption or threat occurs under such other circumstances, will
take appropriate actions to limit imports.
Ronald Reagan
12/8
USTR
Testile Industry/Labs proposal
6: me try to megotiste guotan
for like of againment.
1,2: indiction for domestic
unit. but must of with
7: Boldribe reservation will
would be work anyway who
commit to study, house. the +
within in 3,4, 5.
labor have not come back.
3: trisser
3,4: call at min level, not hold.
And/labor above this in
4: criting pusblems tripper
[Dossit limit our vesotition
or retting limits, int timing
triper commetation, not
of holds]
outan Doesn't tell for how
to act, int to art [is
last sentences of 3,4: hisk
this view shared by ind +
out new
laba ?]
1,2: ogain girt tagger coultation
5. time of request rets minimum
of smultation part
limit
formula tripped
90 day
Pending litigation: sut against
35%
1
whole program : due process,
of can't
APA, 5204 (no market dringtion)
with
in
resent year +
of not in paper, Division being
made what writing for
wind
I
]
forth, to shily Doc
will provid in at. Would
laterals.
meth ond meant.
[would est 1,2 when witern]
4 of atynic
form: pudeterming mine. could
PIRST
be put it wike in would
but mould prem
1981: like Ray
Dry book [mant + mounted
MFA: m standard for mik of
dams a that of mht
Can drop calls. Industry
doesn't share view.
annex A: no me portor. Family:
6: DOC always this # get
are an this factors.
mumt for life 1 bilaterol.
Shiley: its want look at MFA.
Not leyal layure. No cause
level of formality ? Industry
of action donatically But
wants E,O. on formular.
intl legal begistins covern.
PRC not MFA maker
MFA distingivides donose/ment
desiration.
12/12 9:30
S: formula has engh of the
elemets in it to motest
in under MFA.
THE WALL STREET JOURNAL
WED. DEC. 14,1983
Imports
Of Some Nations
At Certain Trade Level. Curbs
Would Apply to China.
Others With Low Wages
Ey ART PINE
Staff Reporte of THE STREET JOURNAL
WASHINGTON-T- Reagan administra-
The pla: Was presented 10 10] adminis-
000 15 considering a D.OVE 1( hal: textile im-
tration policy DIRETS S-N-TE days age. but
ports from secalied low-wage countries. in
Was registed (- 11.6 was 100
cluding China Whenever total textile im
Nestercay USSITNS between
parts here react c certair 1-vel.
President
Textil- nun countries with
1-10
1:
1:-
ORDER
wages that are relatively emparable 1.
= 11 11:- U.S.. such as France and Bri:
21.
wouldn't DE afferred
partners
Ti- DEL crafted JUN by the U.S tex-
u.a. the Chines-
Iff incustry anc th. Commerce Depart-
CUSTON has CRED were antually :
1 ment. IS being discussed n. to: administra-
mests textiles makers. v: ar- C
DOT policy makers as a trade-off under
tiven well this year However 11+
which domestic textile producers would drop
inoustry reportedly feels The E
an unfair trade practices petition agains:
hasn't taken full account of a recent surge II.
textile imports from China. U.S. officials
textile imports.
fear prosecution of the complaint against
If the industry and the administration
China could jeopardize U.S.-Cninese rela-
can't agree on a conpromise. ther the White
tions and may prompt China to refuse to buy
House will be faced with a major trade deci-
U.S. grain.
sion that could have serious implications for
-The proposal was discussed at a meeting
imports from other state-run economies as
vesterday between President Reagan and a
well. The U.S industry has raised two points
group of lawmakers from textile-producing
in its complaint: Chinese textile production
states. including Sen. Strom Thurmond and
was being subsidized because the factories
Rep. Carroll Campbell. both South Carolina
are owned and run by the state, and that
Republicans. Mr. Reagan reportedly didn't
Chines exporters benefit unfairly from a
make a decision on the specifics 0. the plan.
multitiered exchange rate system that gives
but the lawmakers said he promised the ID:
exports a price advantage.
dustry that the administration would act by
Friday.
The government and industry representa-
tives are expected to try to work out some
agreement in time to meet a Friday dead-
line for reaching an informal settlement of
the industry's complaint. Industry leaders
agreed to suspend their petition during nego-
tiations here.
Sen. Thurmond said later that he had
urged Mr. Reagan to adopt a three-part pro-
posal. It would include overall limits on tex-
tile imports from low-wage countries, enact-
ment of new presidential power to block
surges of textile imports even in the face of
a multilateral trade agreement and a plan
to require import licenses for all textile im-
ports. However. it wasn't clear yesterday
whether any of Sen. Thurmond's proposals
would be adopted.
The plan. being proffered within the ad-
ministration by Commerce Secretary Mal-
colm Baldrige, would set up a maximum im-
port-penetration level for textile products
that would be acceptable to both parties.
Whenever total textile imports exceeded
that level, the U.S. would halt imports from
so-called low-wage textile-producing coun-
tries, also including South Korea, Hong
Kong and Taiwan. and begin proceedings
leading to imposition of numerical quotas on
these imports. on a product-by-product
THE SECRETARY OF COMMERCE
Washington, D.C. 20230
UNITED STATES OF AMERICA
MEMORANDUM FOR THE PRESIDENT
Subject:
Memorandum Setting Rules for the Establishment
of the New Textile Quotas
BACKGROUND
You have pledged to Senator Thurmond and others to relate the growth of textile
imports to growth in the domestic market. However, import growth continues at
unprecedented levels. Since the beginning of your Administration, imports have
grown by 49 percent while domestic production has grown only 1 percent. While
domestic production has rebounded in 1983, imports continue to grow at twice
the level of domestic production, resulting in further erosion of industry's
domestic market share.
Dissatisfied with the operation of the textile quota program and the recently
concluded Chinese textile agreement, the domestic textile and apparel industry
and unions filed a countervailing duty petition to obtain relief from alleged
Chinese subsidies on textile and apparel exports. The textile coalition has
proposed withdrawing its petition in return for establishment of Administration
rules for taking action to restrain disruptive imports from low wage countries
and for Admministration agreement to make calls on certain products where there
is damagetor risk of damage to the U.S. industry. The industry proposal,
embodied in the attached memorandum, would ensure that the interagency
committee responsible for setting new quotas has rules for timely action. The
textile coalition believes that too often action has been unnecessarily delayed
due to lack of clear guidelines and interagency indecision.
Justice and Commerce Department counsel believe the proposal is consistent with
our international obligations. The propcsal does not alter current procedures
for consultation with the exporting countries' governments. Nor does it
dictate how or at what levels quotas are negotiated.
OPTION 1: Reject the industry proposal and allow the countervailing duty case
to proceed.
PROS:
Would allow the CVD case to proceed to conclusion, thereby emphasizing
our determination to objectively enforce our trade laws.
Would underscore our willingness to resist industry desires for
protection.
- 2 -
CONS:
A finding in favor of the industry would badly damage our bilateral
relations with China and put at risk $5 billion in bilateral trade and
the overall positive gain which have been made in recent months.
A finding against the industry, particularly when coupled with a
negative decision on the industry proposal, would reinforce its view
that the Administration is not prepared to implement your commitment.
This, in turn, could lead to further problems with the domestic industry
if the industry were, as it has in the past, to attempt to block
Administration legislative proposals or to propose its own even more
protectionist legislation.
OPTION II: Accept the industry proposal and sign the attached memorandum.
PROS:
Would avoid the necessity of choosing between our relations with China
and our domestic industry interests.
Would demonstrate that the Administration is prepared to implement your
pledge to Strom Thurmond and Members of Congress.
Would allow us to better control imports while still allowing for
reasonable import growth.
Would promote investor confidence, leading to expanded investment.
The proposal is consistent with our MFA obligations.
CON:
Could lead to anxiety on the part of some trading partners that the
United States is taking a more protectionist path and lead to
accusations in the Multifiber arrangement that the United States is
abusing its international responsibilities (although senior officials of
the European Commission have indicated that it uses a similar system and
that appropriately implemented it would not be seen as protectionist).
Secretary of Commerce
Attachment
NAME
AGENCY
Room
PHONE
Mike Hathaway
USTR
221
395-3432
-
John Murphy
Stuart chemit
Treasury
2013
566-3401
Justice
7116
633-3718
CARRY Tu
State
6420
632-3970
Horold Koh
Justice/oic
5245
633--3713
BOB SHANICS
Justice/OLC
5233
633-3657
WHITE HOUSE
JOHN ROBERTS
COUNSEL OFFICE
112
456-7953
JOHN GARSON
LABOR
N-2700
523-8627
395 395-3150 3150
Claud General
ustn
223
Chip Roh
USTR
217
395-3432
w Lenaha
DOG
3001
377 3737
Shirley (offield
DOC/6S
3327
377-4845
THE WHITE HOUSE
WASHINGTON
December 9, 1983
MEMORANDUM FOR FRED F. FIELDING
FROM:
JOHN G. ROBERTS
SUBJECT:
Textile Proposals
To recap the events of last evening: I received at
approximately 8:00 p.m. a call from Shirley Coffield, an
attorney in the General Counsel's office at the Department
of Commerce, advising that Commerce Undersecretary Lionel
Ohlmer had telephoned Commerce General Counsel Irving
Margulies from Brussels to obtain our opinion on the
legality of Commerce's proposed settlement of the Chinese
countervailing duty case. According to Ohlmer, Baldrige had
received a commitment from you to provide such an opinion
within 24 hours. The opinion was needed in order that
Secretaries Baldrige, Brock, Block, and Schultz could
discuss the policy question at a meeting in Brussels at
7:00 a.m. December 9 (EST). After putting a call in to you,
I telephoned Margulies, who conceded that it had not been
his understanding that you were expected to deliver such an
instantaneous opinion, but that it was the Secretary's
understanding and that the Secretary now required that your
views be obtained that evening.
After our first telephone discussion, I telephoned Bob
Shanks, Deputy Assistant Attorney General, OLC, and reviewed
the matter with him. Shanks expressed his opinion that we
would be on "solid ground" if it were clear that the
formulae in the industry/labor proposal triggered only a
"call," and did not speak to the level of limits ultimately
imposed. In Shanks' view, a commitment by the Government to
the formulae could be defended if CITA retained complete
discretion after the triggering of a call in setting actual
limits and, in an unusual case, even withdrawing the call.
The theory underlying this view is that the factors that
must be considered under the MFA or pertinent bilateral
agreement that are not embraced by the formula can be
considered prior to setting the ultimate limits. Shanks
also recommended that the personal involvement of the
President be kept at a minimum. He indicated that there was
no legal necessity for the President to be involved at all,
although he recognized that this was a condition insisted
upon by industry and labor before they would drop the
countervailing duty case.
We then had our second telephone conversation, and I
telephoned Margulies to give him our advice. I told
Margulies that it must be made clear to the Secretary that
our office was expressing no view on the policy question,
about which we had very serious concerns. I then told him
that it was our view, based on the Commerce legal opinion
and our necessarily brief review of the matter and
consultations with the Department of Justice, that the
Commerce proposal was defensible if and only if it were made
explicit that the formulae triggered only a "call," and did
not speak to the level of limits, if any, ultimately imposed
by CITA. It must be made explicit and understood that CITA
retains complete discretion in setting ultimate limits, and,
in an unusual case, pulling a "call." I pointed out to
Margulies that this course of action had its risks,
primarily making the pending litigation by importers against
the entire program more problematic, and making the defense
before TSB of any limits ultimately imposed more difficult.
Finally, I advised Margulies that it was our view that the
direct involvement of the President should be kept at the
absolute minimum necessary to secure the agreement of
industry and labor, if it is determined to pursue this
course. In no event would an Executive Order be issued, and
the President's involvement should be as informal and
nonsubstantive as possible. I then called you for the third
time and repeated to you the advice I had given to
Margulies.
Shirley Coffield telephoned me this morning to confirm that
Margulies had conveyed our views to the Secretary last
evening. I reiterated those views to her to ensure that
there was no misunderstanding. Bob Shanks also called and
we confirmed our mutual understanding of the advice to
Margulies, as outlined above.
MEMORANDUM FOR:
IRVING P. MARGULIES
Acting General Counsel
DRAFT
Department of Commerce
FROM:
Fred F. Fielding
Counsel to the President
The White House
I have considered the opinion expressed in your letter
concerning the consistency of changes in the textile import
have constind
contemplated
program with the Multifiber Arrangement, and agree with the
charges
conclusion that the proposals are not inconsistent with that
Arrangement or related textile bilaterals.
defensible
under
This welmin in contribut sepon it bring make explinit
+ understand these proposals to mean that the criteria proposed
at must
would merely trigger the "call" mechanisms in our bilateral agreements
be made
in the absence of
clear
or, lacking such an agreement, the provisions of Article 3 of the
that
that
MFA.
The level of import restraint which may be agreed as a result
of any consultations under those provisions would continue to be at
the discretion of the U.S. Government. In addition I understand
should
provide
these proposals to provide that if, after the call is made,
further information shows the call to have been inappropriate,
that the call could be discontinued and any import restrictions
that
might have been imposed would be removed. Implementation
could be defended
of the program in this way would not be inconsistent with our
commitments under the MFA. given the nature of the recommended
criteria themselves. which provided that action only be taken in
instances when there are growing imports from low wage suppliers.
But emplish Dear lit + TSB. The propend
changes in the tentile import program may make
the defene of the orwynn in dontic citization more
publentic, ol my ink the life of as Lit and
before the TIB me difficult, - them whites the realing
quation whall h amount of there comeror.
2
This view does not address the policy implications of any
decision to agree to these proposals.
It would be my recommendation that the President's direction
should
to implement these proposals L be by some means other than an
Executive Order, as the Presidential action is consistent with the
provisions of the current CITA Executive Order and does not
involve its amendment. In addition, a less formal directive would
minimize direct Presidential involvement in the actual implementation
of the proposals.
N. action by the pridet in receiving to
noticent The and class in the A.i.g.
of Pm with is to he them, it what
be
DRAFT
MEMORANDUM TO: THE SECRETARY OF STATE
THE SECRETARY OF TREASURY
THE SECRETARY OF COMMERCE
THE SECRETARY OF LABOR
THE U.S. TRADE REPRESENTATIVE
am directing
I have determined that the actions directed to be taken by
the Committee for the Implementation of Textile Agreements (CITA),
in this memorandum are necessary to implement U.S. rights under
the Multifiber Arrangement (MFA) and related bilateral
trade agreements. I am, therefore, authorizing CITA, under
Section (c) of Executive Order 11652 of March 3, 1972 as amended,
to take such actions. These actions will be taken pursuant to
Section 204 of the Agricultural Act of 1956 which provides
authority to implement textile agreements, and Executive Order
11651 in which authority to perform certain actions with respect
to these agreements has been delegated to CITA.
Under the MFA and our bilateral textile agreements, the U.S.
is authorized to take action affecting imports in cases of market
disruption or the threat of market disruption.
As a consequence of increasing imports of textile and textile
products from low-wage countries, there has been increasing
disruption and threat of disruption to the U.S. textile and
apparel industry. As provided in Section 204 and our
international agreements, and in order to avoid further disruption
to the U.S. textile and apparel industry which is damaged or
threatened with damage from imports coming from these low-wage
2
countries, I am directing CITA to take the following actions:
(1) CITA [will act to limit imports from] [will issue calls,
which limit imports, on] growing low-wage suppliers in any
product/category when total growth in imports in that
product/category is more than 30 percent in the most recent
year ending or the total growth in imports would lead to an
import to domestic production ratio of 20 percent or more.
These [limits will be established] [calls will be made] on
only
any growing low-wage supplier/wher imports from any such
supplier reach [the greater of 1 percent of total imports or]
the minimum consultation level in that product/category.
(2) The Government [will act to limit imports from] [will issue
calls, which limit imports, on] growing low-wage suppliers in
any product/category already import impacted, [that is, ] in
which imports exceed 20 percent of U.S. production in that
category. In taking [these] actions [to limit imports, the
Government will [limit] [call] all growing low-wage suppliers
that have greater than the higher of the minimum consultation
level or 1 percent of total imports in any category.
(3) With respect to Hong Kong, Taiwan and Korea, E-system calls
on each supplier will be made on any product/category when
E's issued in that particular product/category reaches 65
percent of the Maximum Formula Level [MFL] [and in the
opinion of the Chairman of CITA would exceed the MFL if not
3
called] and is in a category with an I/P ratio of 20 percent
or more, or total imports or anticipated total imports would
increase the I/P.
(4) Once any category is restricted after consultations under the
textile import program, [CITA shall take action to insure
that] it shall remain under control for the life of the
bilateral agreement that governs our textile relations with
the called country.
Market disruption or the threat thereof may occur under
circumstances other than those referred to above. CITA will
continue to carefully monitor all textile and apparel imports and
their impact on the U.S. textile and apparel industry, and where
market disruption or threat occurs under such other circumstances,
will take appropriate actions to limit imports.
Ronald Reagan
and
NMERCE
THE SECRETARY OF COMMERCE
Washington, D.C. 20230
UNITED STATES OF AMERICA
MEMORANDUM FOR THE PRESIDENT
Subject:
Memorandum Setting Rules for the Establishment
of the New Textile Quotas
BACKGROUND
You have pledged to Senator Thurmond and others to relate the growth of textile
imports to growth in the domestic market. However, import growth continues at
unprecedented levels. Since the beginning of your Administration, imports have
grown by 49 percent while domestic production has grown only 1 percent. While
domestic production has rebounded in 1983, imports continue to grow at twice
the level of domestic production, resulting in further erosion of industry's
domestic market share.
Dissatisfied with the operation of the textile quota program and the recently
concluded Chinese textile agreement, the domestic textile and apparel industry
and unions filed a countervailing duty petition to obtain relief from alleged
Chinese subsidies on textile and apparel exports. The textile coalition has
proposed withdrawing its petition in return for establishment of Administration
rules for taking action to restrain disruptive imports from low wage countries
and for Admministration agreement to make calls on certain products where there
is damage or risk of damage to the U.S. industry. The industry proposal,
embodied in the attached memorandum, would ensure that the interagency
committee responsible for setting new quotas has rules for timely action. The
textile coalition believes that too often action has been unnecessarily delayed
due to lack of clear guidelines and interagency indecision.
Justice and Commerce Department counsel believe the proposal is consistent with
our international obligations. The proposal does not alter current procedures
for consultation with the exporting countries' governments. Nor does it
dictate how or at what levels quotas are negotiated.
OPTION 1: Reject the industry proposal and allow the countervailing duty case
to proceed.
PROS:
Would allow the CVD case to proceed to conclusion, thereby emphasizing
our determination to objectively enforce our trade laws.
Would underscore our willingness to resist industry desires for
protection.
- 2 -
CONS:
A finding in favor of the industry would badly damage our bilateral
relations with China and put at risk $5 billion in bilateral trade and
the overall positive gain which have been made in recent months.
A finding against the industry, particularly when coupled with a
negative decision on the industry proposal, would reinforce its view
that the Administration is not prepared to implement your commitment.
This, in turn, could lead to further problems with the domestic industry
if the industry were, as it has in the past, to attempt to block
Administration legislative proposals or to propose its own even more
protectionist legislation.
OPTION II: Accept the industry proposal and sign the attached memorandum.
PROS:
Would avoid the necessity of choosing between our relations with China
and our domestic industry interests.
Would demonstrate that the Administration is prepared to implement your
pledge to Strom Thurmond and Members of Congress.
Would allow us to better control imports while still allowing for
reasonable import growth.
Would promote investor confidence, leading to expanded investment.
The proposal is consistent with our MFA obligations.
CON:
Could lead to anxiety on the part of some trading partners that the
United States is taking a more protectionist path and lead to
accusations in the Multifiber arrangement that the United States is
abusing its international responsibilities (although senior officials of
the European Commission have indicated that it uses a similar system and
that appropriately implemented it would not be seen as protectionist).
Secretary of Commerce
Attachment
DEPARTMENT OF COMMERCE
GENERAL COUNSEL OF THE
UNITED STATES DEPARTMENT OF COMMERCE
UNITED STATES OF
Washington, D.C. 20230
December 7, 1983
Honorable Fred F. Fielding
Counsel to the President
The White House
Washington, D.C.
20500
Dear Mr. Fielding:
Enclosed is another copy of the MFA paper and also a
copy of the Preamble. Page 4 of the MFA paper was
accidentally omitted with the letter sent to you from
Irving Margulies dated December 6, 1983.
Sincerely,
Hruley Shirley Coffield Coffield
Attorney-Advisor
Office of the General Counsel
Enclosures
1633 DEC in IS 5a
Requirements for Market Disruption under the MFA
Both Articles 3 and 4 of the MFA refer to "Market
Disruption;" in Article 3 as the justification for
action and in Article 4, "preventing the real risk of
market disruption" as a basis for bilateral agreements.
In both articles, reference is made to the definition
of Market Disruption in Annex A.
Annex A Paragraph I, does not, however, contain any
quantifiable definition of Market Disruption, but rather
refers to it as "serious damage" or the "actual threat
thereof." "Appropriate factors" must be examined in
determining damage, an illustrative list of which is
given. No mention is made of threat of damage. The
definitiveness of the list of factors is further clouded
by the last sentence of Paragraph I which comments that,
"No one or several of these factors can necessarily give
decisive guidance."
The ambiguities of Paragraph I, when seen in
conjunction with the Article 3(3) provision which
leaves the decision as to when Market Disruption exists
to the "opinion" of the importing country (in terms of
the Annex A definition) further dilutes the
"definition" as it exists in Annex A Paragraph I.
2
Clearly, to have Market Disruption there must be
serious damage or the actual threat of serious damage.
In order to make a determination as to whether or not
damage exists, participating countries must look at
factors determined to have a bearing on the state of
the domestic industry. An illustrative list of factors
which may have such a bearing are:
- turnover
- market share
- profits
- export performance
- employment
- volume of disruptive and other imports
- production
- utilization of capacity
- productivity
- investments
The illustrative nature of the list, together with
the caveat that "No one or several of these factors can
necessarily give decisive guidance" would seem to leave
to the country making the determination (under Article
3) considerable flexibility as to which factors, listed
or otherwise, should be considered most important in
determining whether or not damage exists.
3
While there is no discussion in Annex A as to what
factors one should look at to determine actual threat of
damage, it seems reasonable to expect that a country
would look at similar factors as when determining damage
but may, of course, consider some factors more important
than others or look at different factors when determining
if an actual threat exists.
Paragraph II which lists the factors, generally
appearing in combination, which cause Market Disruption
gives a more quantifiable basis for a Market Disruption
determination. If those factors exist;
(i) a sharp and substantial increase or imminent
increase of imports of particular products from
particular sources;
(ii) those products are offered at prices which
are substantially below those of similar goods in
the importing market,
then it would not, in my view, be inconsistent
with Annex A to presume Market Disruption. The
presumption could be refuted if it was determined that
no damage or threat of the damage was present after
looking at factors bearing on the domestic industry's
condition in accordance with Paragraph I.
4
With respect to agreements under Article 4 of the
MFA, the standard is that the agreements should
eliminate the "real risk of Market Disruption," a term
translated into most U.S. bilaterals as providing for
exporter and U.S. action when the "threat of Market
Disruption" exists. (As contrasted to the threat of
damage which can be Market Disruption in Annex A). The
standard is still Annex A under the terms of Article 4,
but the justification for action under an agreement is
pushed back one step from Market Disruption (Article 3)
to threat of Market Disruption (U.S. bilaterals).
With respect to countries not a party to the MFA,
there is no requirement that Market Disruption exist.
Article 8 of the MFA gives rights to MFA signatories
that an importing country not allow non-participant to
frustrate the operation of the MFA. It additionally
provides that participants not be restrained greater than
non-participants causing or threatening Market Disruption.
DRAFT PREAMBLE
I have determined that the actions set forth in this order
are necessary to implement U.S. rights under the Multilateral
Textile Agreement (MFA) and related bilateral trade agreements.
These actions are taken pursuant to Section 204 of the
Agricultural Act of 1956 which provides authority to implement
these agreements, and Executive Order 11651 of March 3, 1972 as
amended, in which authority to perform certain actions with
respect to these agreements has been delegated to the Committee
for the Implementation of Textile Agreements (CITA).
Under the MFA and our bilateral textile agreements, the U.S.
is authorized to take action affecting imports in cases of market
disruption or the threat of market disruption.
As a consequence of increasing imports of textile and textile
products from low wage countries, there has been increasing
disruption and threat of disruption to the U.S. textile and
apparel industry. As provided in Section 204 and our
international agreements, and in order to avoid further disruption
to the U.S. textile and apparel industry which is damaged or
threatened with damage from imports coming from these low wage
countries, I am directing CITA to take the following actions:
2
Market disruption or the threat thereof may occur under
circumstances other than those referred to above. CITA will
continue to carefully monitor all textile and apparel imports and
their impact on the U.S. textile and apparel industry, and
where market disruption or threat occurs under such other circum-
stances, will take appropriate actions to limit imports.