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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/Cabinet Council on Commerce and Trade (2 of 2) Box: 6 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/ CCCT MEMORANDUM THE WHITE HOUSE WASHINGTON February 17, 1983 MEMORANDUM FOR FRED F. FIELDING FROM: JOHN G. ROBERTS osk SUBJECT: Proposed Reorganization of Trade Policy Process Craig Fuller is considering options for a possible reorganiza- tion of the President's trade policy process. He has inquired if the Cabinet Council on Commerce and Trade (CCCT) could meet the requirements of 19 U.S.C. § 1872. That section requires the President to establish an interagency organization composed of the United States Trade Representa- tive (USTR) and the heads of other departments designated by the President. The duties of this organization include: O assisting the President in carrying out 19 U.S.C. §§ 2251, 2252, and 2253 (International Trade Commission investigations and subsequent Presiden- tial action); O making recommendations to the President on basic trade policy issues; O advising the President with respect to the results of 19 U.S.C. § 2412 (b) (2) hearings on petitions for Presidential action to enforce a trade agreement; O other functions with respect to the trade agreements program as the President may designate. The responsibilities of this statutorily mandated inter- agency organization have traditionally been discharged by the Trade Policy Committee, pursuant to Executive Order No. 11846, as amended. The CCCT as presently formed cannot assume the responsibil- ities of the interagency organization mandated by 19 U.S.C. § 1872. A separate provision, 19 U.S.C. § 2171 (c) (1) (E), specifies that the USTR shall "be chairman of the inter- agency trade organization established pursuant to [19 U.S.C. § 1872]. " The Secretary of Commerce, however, chairs the CCCT. The legislative history of 19 U.S.C. § 1872 indicates -2- that the specification that the USTR chair the statutorily mandated interagency trade organization is not a mere technicality. As it passed the House, what is now 19 U.S.C. $ 1872 provided that the President may designate the chair- man. The Senate altered this to provide that the Special Trade Representative, predecessor to the USTR, serve as chairman because it "felt that the Chairman, if he was chosen from one of the departments, would represent more the views of that department than the overall broader perspec- tive represented by the Special Representative." S. Rep. No. 2059 (Sept. 14, 1962). I have drafted a memorandum for your signature to Fuller indicating that the CCCT as presently constituted cannot meet the requirements of 19 U.S.C. $ 1872, due to the requirements of 19 U.S.C. $ 2171 (c) (1) (E). Attachment THE WHITE HOUSE WASHINGTON February 17, 1983 MEMORANDUM FOR CRAIG L. FULLER ASSISTANT TO THE PRESIDENT Orig. signed by FFF FROM: FRED F. FIELDING COUNSEL TO THE PRESIDENT SUBJECT: Trade Policy Process By memorandum dated February 10 you inquired whether the Cabinet Council on Commerce and Trade could satisfy the legislative requirement that the President establish an interagency organization to advise and assist him on trade policy issues. 19 U.S.C. § 1872. You noted that the Trade Policy Committee has traditionally fulfilled this legisla- tive mandate. The statutory provisions establishing the Office of the United States Trade Representative specify that the USTR shall "be chairman of the interagency trade organization established pursuant to [19 U.S.C. § 1872]." 19 U.S.C. § 2171 (c) (1) (E). Since the Secretary of Commerce chairs the Cabinet Council on Commerce and Trade, any effort to satisfy the requirements of 19 U.S.C. § 1872 through the Cabinet Council would conflict with 19 U.S.C. § 2171 (c) (1) (E). Our research indicates that when it mandated an interagency trade organization pursuant to 19 U.S.C. $ 1872, Congress specified that the chairman be the Special Trade Representa- tive, predecessor to the USTR, because it thought a chairman from one of the departments would not have as broad a perspective on the trade issues. This specification has been carried forward as 19 U.S.C. § 2171 (c) (1) (E). Accordingly, the Cabinet Council on Commerce and Trade as presently constituted cannot be considered the organization mandated by 19 U.S.C. § 1872, since that organization must be chaired by the USTR. FFF:JGR:aw 2/17/83 CC: FFFielding GRoberts Subj. Chron THE WHITE HOUSE WASHINGTON February 17, 1983 MEMORANDUM FOR CRAIG L. FULLER ASSISTANT TO THE PRESIDENT FROM: FRED F. FIELDING COUNSEL TO THE PRESIDENT SUBJECT: Trade Policy Process By memorandum dated February 10 you inquired whether the Cabinet Council on Commerce and Trade could satisfy the legislative requirement that the President establish an interagency organization to advise and assist him on trade policy issues. 19 U.S.C. § 1872. You noted that the Trade Policy Committee has traditionally fulfilled this legisla- tive mandate. The statutory provisions establishing the Office of the United States Trade Representative specify that the USTR shall "be chairman of the interagency trade organization established pursuant to [19 U.S.C. $ 1872]. 19 U.S.C. § 2171 (c) (1) (E). Since the Secretary of Commerce chairs the Cabinet Council on Commerce and Trade, any effort to satisfy the requirements of 19 U.S.C. $ 1872 through the Cabinet Council would conflict with 19 U.S.C. § 2171 (c) (1) (E). Our research indicates that when it mandated an interagency trade organization pursuant to 19 U.S.C. § 1872, Congress specified that the chairman be the Special Trade Representa- tive, predecessor to the USTR, because it thought a chairman from one of the departments would not have as broad a perspective on the trade issues. This specification has been carried forward as 19 U.S.C. § 2171 (c) (1) (E). Accordingly, the Cabinet Council on Commerce and Trade as presently constituted cannot be considered the organization mandated by 19 U.S.C. § 1872, since that organization must be chaired by the USTR. FFF:JGR:aw 2/17/83 CC: FFFielding JGRoberts Subj. Chron Ch. 7 Ch. 7 TRADE AGREEMENTS 19 § 1872 Texas Am. Asphalt D.C.Tex.1959, 177 F. PART V-ADMINISTRATIVE PROVISIONS § 1871. Repealed. Pub.L. 93-618, Title VI, § 602(d), Jan. Oil Import Appeals crude oil importation 3, 1975, 88 Stat. 2072 subsidiary was not en- mport regulation was Historical Note hardship or special hich denial of import Section, Pub.L 87-794. Title II, § 241, sentative for Trade Negotiations. See overturned was not Oct. 11, 1962, 76 Stat. 878, provided for section 2171 of this title. or an abuse of dis- the appointment of the Special Repre- Co. V. Russell, 1970, App.D.C. 180. § 1872. Interagency trade organization sident's judgment that Establishment: composition; meetings; participation by other agencies application of his to restrict oil imports (a) The President shall establish an interagency organization to judicial review. Tex- assist him in carrying out the functions vested in him by this sub- V. Walker, D.C. 315. chapter and sections 2251, 2252, and 2253 of this title. Such organi- terest zation shall, in addition to the United States Trade Representative, to invest oil im- be composed of the heads of such departments and of such other of- which are collected ficers as the President shall designate. It shall meet at such times determination of program in inter- and with respect to such matters as the President or the chairman notes does not vio- of the organization shall direct. The organization may invite the inst awards of pre- participation in its activities of any agency not represented in the gainst government in are not claims organization when matters of interest to such agency are under con- States but are being sideration. government against Oil Co. V. Zarb, Duties 1001. (b) In assisting the President, the organization shall- to Congress of (1) make recommendations to the President on basic policy issues arising in the administration of the trade agreements program, annual report on (2) make recommendations to the President as to what ac- takes any action tion, if any, he should take on reports submitted to him by the shall report to United States International Trade Commission under section 2251 (d) of this title, 993. (3) advise the President of the results of hearings held pur- suant to section 2412(b) (2) of this title, and recommend appro- priate action with respect thereto, and of 1962 hich com- (4) perform such other functions with respect to the trade For legislative agreements program as the President may from time to time Pub.L. 93-618, see designate. and Adm.News, p. Use of resources of agencies; procedures and committees (c) The organization shall, to the maximum extent practicable, draw upon the resources of the agencies represented in the organi- zation, as well as such other agencies as it may determine, including onal Defense I 200. the United States International Trade Commission. In addition, the 51 19 § 1872 TRADE EXPANSION PROGRAM Ch. 7 Ch. 7 President may establish by regulation such procedures and commit- tees as he may determine to be necessary to enable the organization Office of the to provide for the conduct of hearings pursuant to section 15 CFR ( 2412(b) (2) of this title, and for the carrying out of other functions assigned to the organization pursuant to this section. § 1873. Pub.L. 87-794, Title II, § 242, Oct. 11, 1962, 76 Stat. 878; Pub.L. 93-618, Title I, § 171(b), Title VI, § 602(b), Jan. 3, 1975, 88 Stat. 2009, 2072; Pub.L. 96-39, Title IX, § 902(c), July 26, 1979, 93 Stat. 300; 1979 Reorg.Plan No. 3, § 1(b) (1), eff. Jan. 2, 1980, 44 F.R. 69273, 93 Stat. 1381. Section, Pub Oct. 11, 1962, 7 Historical Note 1979 Amendment. Subsecs. (b) (3), (c). tive for Trade Negotiations" in subsec. Pub.L. 96-39 substituted "section (a), pursuant to Reorg. No. 3 of 2412(b)(2) of this title" for "section 1979, 1 1(b) (1), 44 F.R. 69273, 93 Stat. 1381, § 1881. 2411(c) and (d) of this title". eff. Jan. 2, 1980, as provided by section 1-107(a) of Ex.Ord.No.12188, Jan. 2, 1980, Except as 1975 Amendment. Subsec. (a). Pub.L. 45 F.R. 993, set out as notes under sec- 93-618, 8 602(b)(1), substituted reference of this title tion 2171 of this title. to sections 2251, 2252, and 2253 of this ti- 1962, any d tle for reference to sections 1981 and 1982 Transfer of Functions from East-West proclaimed of this title. Foreign Trade Board. The East-West Foreign Trade Board, which was estab- ter or section Subsec. (b) (2). Pub.L. 93-618, I lished by Pub.L. 93-618, title IV, I 411, 602(b) (2), (3), substitated "reports sub- countries, will Jan. 3, 1975, 88 Stat. 2065, and classified mitted by him" for "reports with respect to section 2441 of this title, was abolished Pub.L. 87-7 to tariff adjustment submitted by him" and "section 2251(d) of this title" for by Reorg Plan No. 3 of 1979, $ 6, 44 Stat. 69275, 93 Stat. 1381, eff. Jan. 2, 1980, as "section 1901(e) of this title". provided by section 1-107(a) of Ex.Ord. Subsec. (b) (3). Pub.L. 93-618, 1 No.12188, Jan. 2, 1980, 45 F.R. 993, set out References fill 602(b)(4), (5), substituted "hearings held as notes under section 2171 of this title, the Tariff Cla pursuant to" for "hearings concerning and the functions of the Board under referred to 1: foreign import restrictions held pursuant subsecs. (a) and (b) of section 411 of note under sect to" and "section 2411(c) and (d) of this Pub.L. 93-618 transferred to the intera- title" for "section 1882(d) of this title". gency organization established under this section by section 5(e) of Reorg. Plan No. Subsec. (c). Pub.L. 93-618, § 602(b) (5), 3 of 1979. See section 2441 of this title. substituted "section 2411(c) and (d) of Customs Dut this title" for "section 1882(d) of this ti- Trade Policy Committee. For provi- tle". sions relating to the establishment of the Trade Policy Committee, Bee section 8 of Effective Date of 1979 Amendment. Ex.Ord.No.11846, Mar. 27, 1975, 40 F.R. Amendment by Pub.L. 96-39 effective 14291, set out as a note under section Generally 1 July 26, 1979, see section 903 of Pub.L. 2111 of this title. Assessment on 96-39, set out as a note under section Countervailing 2411 of this title. Legislative History. For legislative Change of Name. The United States history and purpose of Pub.L. B7-794, see Tariff Commission was redesignated the 1962 U.S.Code Cong. and Adm.News, p. United States International Trade Com- 3110. See, also, Pub.L. 93-618, 1974 U.S. 1. Generally mission by Pub.L. 93-618, Title I, I Code Cong. and Adm.News, p. 7186; "Most-favore 171(a), Jan. 3, 1975, 88 Stat, 2009. See Pub.L. 96-39, 1979 U.S.Code Cong. and the United St section 2231 of this title. Adm.News, p. 381. ucts of all cor "United States Trade Representative" agreement an Kurt S. Adler was substituted for "Special Represents- Supp. 943, 68 firmed 496 F.2 Library References 2. Countervall Customs Duties @10. C.J.B. Customs Duties DOB 17. The imposit United States 31. C.J.S. United States I 31. does not V clause. Energ 52 19 § 2171 TRADE ACT OF 1974 Ch. 12 PART 4-OFFICE OF UNITED STATES TRADE REPRESENTATIVE § 2171. Structure, functions, powers, and personnel Establishment within Executive Office of President (a) There is established within the Executive Office of the Presi- dent the Office of the United States Trade Representative (herein- after in this section referred to as the "Office"). United States Trade Representative: Deputy United States Trade Representatives (b) (1) The Office shall be headed by the United States Trade Representative who shall be appointed by the President, by and with the advice and consent of the Senate. As an exercise of the rule- making power of the Senate, any nomination of the United States Trade Representative submitted to the Senate for confirmation, and referred to a committee, shall be referred to the Committee on Fi- nance. The United States Trade Representative shall hold office at the pleasure of the President, shall be entitled to receive the same allowances as a chief of mission, and shall have the rank of Ambas- sador Extraordinary and Plenipotentiary. (2) There shall be in the Office two Deputy United States Trade Representatives who shall be appointed by the President, by and with the advice and consent of the Senate. As an exercise of the rule- making power of the Senate, any nomination of a Deputy United States Trade Representative submitted to the Senate for confirma- tion, and referred to a committee, shall be referred to the Committee on Finance. Each Deputy United States Trade Representative shall hold office at the pleasure of the President and shall have the rank of Ambassador. Duties of United States Trade Representative and Deputy United States Trade Representatives (c) (1) The United States Trade Representative shall- (A) be the chief representative of the United States for each trade negotiation under this subchapter or section 2411 of this title; (B) report directly to the President and the Congress, and be responsible to the President and the Congress for the adminis- tration of trade agreements programs under this chapter, the Trade Expansion Act of 1962, and section 1351 of this title; (C) advise the President and Congress with respect to non- tariff barriers to international trade, international commodity agreements, and other matters which are related to the trade agreements programs; 144 Ch. 12 Ch. 12 NEGOTIATING & OTHER AUTHORITY 19 § 2171 (D) be responsible for making reports to Congress with re- spect to the matter set forth in subparagraphs (A) and (B); (E) be chairman of the interagency trade organization estab- Mined invenant to section 242(a) OFF the trade Expansion Act of of (F) be responsible for such other functions as the President may direct. Presi- (2) Each Deputy United States Trade Representative shall have (herein- as his principal function the conduct of trade negotiations under this chapter and shall have such other functions as the United States Trade Representative may direct. Powers of United States Trade Representative Trade (d) The United States Trade Representative may, for the purpose and with of carrying out his functions under this section- the rule- (1) subject to the civil service and classification laws, select, States appoint, employ, and fix the compensation of such officers and and employees as are necessary and prescribe their authority and on Fi- duties; office at the same (2) employ experts and consultants in accordance with sec- Ambas- tion 3109 of Title 5 and compensate individuals so employed for each day (including traveltime) at rates not in excess of the maximum rate of pay for grade GS-18 as provided in section Trade 5332 of Title 5, and while such experts and consultants are so and with serving away from their homes or regular place of business, to the rule- pay such employees travel expenses and per diem in lieu of sub- United sistence at rates authorized by section 5703 of Title 5 for per- onfirma- sons in Government service employed intermittently; ommittee shall (3) promulgate such rules and regulations as may be neces- the rank sary to carry out the functions vested in him; (4) utilize, with their consent, the services, personnel, and facilities of other Federal agencies; (5) enter into and perform such contracts, leases, cooperative agreements, or other transactions as may be necessary in the conduct of the work of the Office and on such terms as the for each United States Trade Representative may deem appropriate, with of this any agency or instrumentality of the United States, or with any public or private person, firm, association, corporation, or insti- and be tution; adminis- (6) accept voluntary and uncompensated services, notwith- the standing the provisions of section 665(b) of Title 31; and (7) adopt an official seal, which shall be judicially noticed. to non- mmodity Use of other Federal agencies he trade (e) The United States Trade Representative shall, to the extent he deems it necessary for the proper administration and execution of 145 ID #. CU WHITE HOUSE CORRESPONDENCE TRACKING WORKSHEET o # OUTGOING Roberts / rush H * INTERNAL I * INCOMING Date Correspondence Received (YY/MM/DD) / / Name of Correspondent: Craig L. Fuller MI Mail Report User Codes: (A) (B) (C) Subject: Trade Policy Process ROUTE TO: ACTION DISPOSITION Tracking Type Completion Action Date of Date Office/Agency (Staff Name) Code YY/MM/DD Response Code YY/MM/DD WHolland ORIGINATOR 83/02/15 / / CUAT18 Referral Note: D 83,02,15 583102118 Referral Note: / / / / - Referral Note: / / / / - Referral Note: / / / / I Referral Note: ACTION CODES: DISPOSITION CODES: A - Appropriate Action I Info Copy Only/No Action Necessary A Answered C Completed C Comment/Recommendation R Direct Reply w/Copy B Non-Special Referral S Suspended D Draft Response S For Signature F Furnish Fact Sheet X Interim Reply to be used as Enclosure FOR OUTGOING CORRESPONDENCE: Type of Response = Initials of Signer Code II "A" Completion Date = Date of Outgoing Comments: Keep this worksheet attached to the original incoming letter. Send all routing updates to Central Reference (Room 75, OEOB). Always return completed correspondence record to Central Files. Refer questions about the correspondence tracking system to Central Reference, ext. 2590. 5/81 12 THE WHITE HOUSE WASHINGTON February 10, 1983 MEMORANDUM FOR FRED FIELDING FROM: CRAIG L. FULLER 05 SUBJECT: Trade Policy Process I am putting together options for the possible reorganization of the President's trade policy process. Congress has stated, through legislation: "the President shall establish an interagency organization to assist him in carrying out the functions vested in him by this title (Trade Negotiations and Trade Policy Development). Such organization shall in addition to the Special Representative for Trade Negotiations be composed of the heads of such departments and of such other officers as the President shall designate In assisting the President, the organization shall make recommendations to the President on basic policy issues arising in the administration of the trade agreements " program Traditionally, the Trade Policy Committee has fulfilled this legislative mandate. In your view, could the Cabinet Council on Commerce and Trade meet the legislative requirements outlined above? Attached is the membership list of the Cabinet Council on Commerce and Trade. CABINET COUNCIL ON COMMERCE AND TRADE Secretary of Commerce, Chairman Pro Tempore Secretary of State Secretary of the Treasury Attorney General Secretary of Agriculture Secretary of Labor Secretary of Transportation Secretary of Energy U.S. Trade Representative Chairman, Council of Economic Advisers Ex Officio Members: The Vice President Counsellor to the President Chief of Staff Assistant to the President for Policy Development Wendell Gunn, Executive Secretary (6437) file- Cabret Count an MEMORANDUM Commerce for Trade THE WHITE HOUSE WASHINGTON March 17, 1983 MEMORANDUM FOR FRED F. FIELDING Lat's discus, ASAP FROM: JOHN G. ROBERTS esk SUBJECT: Draft Presidential Decision Memorandum Re: Commission on U.S. Trade Policy Richard Darman has requested comments by close of business March 17 on the above-referenced draft decision memorandum, prepared by USTR William E. Brock. The memorandum recommends the establishment of a "blue-ribbon Presidential Commission with membership drawn from industry, labor, agriculture, and academia" to analyze trade policy problems and recommend an appropriate trade policy for the 1980's. Brock states in his memorandum that such an initiative is needed to respond to growing protectionist sentiments both here and among our trading partners, and to review the possibly out-moded and inadequate GATT process. Brock specifically notes that the proposed Commission would have a long-term perspective and would not address organization of Executive Branch trade offices. The proposal calls for a Commission of up to twenty-five members (and includes a list of candidates) and a staff under the direction of retiring deputy USTR David R. Macdonald. I see no legal objections to the decision memorandum, but we should take this opportunity to remind those involved of some of the legal requirements that would accompany a decision to establish a Commission as recommended by Brock. The Commission would be subject to the Federal Advisory Committee Act (FACA), 5 U.S.C. App. I § 3 (2) (B), and accord- ingly must be established by executive order and operate under a charter, id. § 9 (a) (1), (c). Its meetings must also be conducted in compliance with FACA, id. § 10. The other question of particular concern to this office is the applicability of conflict of interest laws. Based on descriptions in the Brock memorandum, it appears that the Die members of the Commission would be Special Government Employees. Although the members are to be "drawn from" industry, labor, agriculture, and academia, the memorandum does not suggest that they are to represent the interests of their respective segments of the economy in such a fashion memo should allentics decumb -2- that they could be considered not to be government employees at all. The members of the Commission would thus be subject to 18 U.S.C. $ 208, which prohibits participation in any matter the outcome of which will have a direct and predict- able effect on financial interests covered by the section. The list of possible members contains many individuals with financial interests in international trade. The mandate of the Commission, however, concerns such broad policy issues that I do not think there will be any inherent section 208 problems. At this stage we should alert those concerned to the SGE status of Commission members and the need for consideration of conflicts questions once the Commission charter and list of proposed members become more definite. THE WHITE HOUSE WASHINGTON March 17, 1983 MEMORANDUM FOR RICHARD G. DARMAN ASSISTANT TO THE PRESIDENT FROM: FRED F. FIELDING Orig. signed by FFF COUNSEL TO THE PRESIDENT SUBJECT: Draft Presidential Decision Memorandum Re: Commission on U.S. Trade Policy Counsel's Office has reviewed the above-referenced draft decision memorandum, and finds no objection to it from a legal perspective. A commission of the sort proposed in the decision memorandum would be subject to the Federal Advisory Committee Act, 5 U.S.C. App. I, and accordingly must be established by executive order, operate pursuant to a charter, and otherwise conduct its business in compliance with the requirements of the Act. Members of the commission could be considered Special Government Employees, and it will be necessary to address potential conflict of interest questions once the mandate of the commission and the list of proposed members become more definite. In short, we need more time to review. FFF: JGR:dgh CC: FFFielding JGRoberts Subject Chron MEMORANDUM THE WHITE HOUSE WASHINGTON March 17, 1983 MEMORANDUM FOR FRED F. FIELDING FROM: JOHN G. ROBERTS SUBJECT: Draft Presidential Decision Memorandum Re: Commission on U.S. Trade Policy Richard Darman has requested comments by close of business March 17 on the above-referenced draft decision memorandum, prepared by USTR William E. Brock. The memorandum recommends the establishment of a "blue-ribbon Presidential Commission with membership drawn from industry, labor, agriculture, and academia" to analyze trade policy problems and recommend an appropriate trade policy for the 1980's. Brock states in his memorandum that such an initiative is needed to respond to growing protectionist sentiments both here and among our trading partners, and to review the possibly out-moded and inadequate GATT process. Brock specifically notes that the proposed Commission would have a long-term perspective and would not address organization of Executive Branch trade offices. The proposal calls for a Commission of up to twenty-five members (and includes a list of candidates) and a staff under the direction of retiring deputy USTR David R. Macdonald. I see no legal objections to the decision memorandum, but we should take this opportunity to remind those involved of some of the legal requirements that would accompany a decision to establish a Commission as recommended by Brock. The Commission would be subject to the Federal Advisory Committee Act (FACA), 5 U.S.C. App. I § 3 (2) (B), and accord- ingly must be established by executive order and operate under a charter, id. § 9 (a) (1), (c). Its meetings must also be conducted in compliance with FACA, id. § 10. The other question of particular concern to this office is the applicability of conflict of interest laws. Based on descriptions in the Brock memorandum, it appears that the members of the Commission would be Special Government Employees. Although the members are to be "drawn from" industry, labor, agriculture, and academia, the memorandum does not suggest that they are to represent the interests of their respective segments of the economy in such a fashion -2- that they could be considered not to be government employees at all. The members of the Commission would thus be subject to 18 U.S.C. § 208, which prohibits participation in any matter the outcome of which will have a direct and predict- able effect on financial interests covered by the section. The list of possible members contains many individuals with financial interests in international trade. The mandate of the Commission, however, concerns such broad policy issues that I do not think there will be any inherent section 208 problems. At this stage we should alert those concerned to the SGE status of Commission members and the need for consideration of conflicts questions once the Commission charter and list of proposed members become more definite. - THE WHITE HOUSE WASHINGTON March 17, 1983 MEMORANDUM FOR RICHARD G. DARMAN ASSISTANT TO THE PRESIDENT FROM: FRED F. FIELDING COUNSEL TO THE PRESIDENT SUBJECT: Draft Presidential Decision Memorandum Re: Commission on U.S. Trade Policy Counsel's Office has reviewed the above-referenced draft decision memorandum, and finds no objection to it from a legal perspective. A commission of the sort proposed in the decision memorandum would be subject to the Federal Advisory Committee Act, 5 U.S.C. App. I, and accordingly must be established by executive order, operate pursuant to a charter, and otherwise conduct its business in compliance with the requirements of the Act. Members of the commission would in all likelihood be considered Special Government Employees, and it will be necessary to address potential conflict of interest questions once the mandate of the commission and the list of proposed members become more definite. FFF:JGR:aw : 3/17/83 CC: FFFielding JGRoberts Subj. Chron ID # 118555 CU WHITE HOUSE CORRESPONDENCE TRACKING WORKSHEET O OUTGOING H INTERNAL I . INCOMING Date Correspondence Received (YY/MM/DD) / / Name of Correspondent: Richard G. Darman MI Mail Report User Codes: (A) (B) (C) Subject: Draft Presidential Desision Memorandum Me: Commission on U.S. Gade Policy ROUTE TO: ACTION DISPOSITION Tracking Type Completion Action Date of Date Office/Agency (Staff Name) Code YY/MM/DD Response Code YY/MM/DD CC Holland ORIGINATOR - 83,03,15 / / Referral Note: WAT18 W D 83,03,15 583,03,17 Referral Note: / / / / - Referral Note: / / / / Referral Note: / / / / Referral Note: ACTION CODES: DISPOSITION CODES: A Appropriate Action I . Info Copy Only/No Action Necessary A Answered C Completed C Comment/Recommendation R. Direct Reply w/Copy B - - Non-Special Referral S Suspended D Draft Response S For Signature F - Furnish Fact Sheet X Interim Reply to be used as Enclosure FOR OUTGOING CORRESPONDENCE: Type of Response = Initials of Signer Code = "A" Completion Date = Date of Outgoing Comments: Keep this worksheet attached to the original incoming letter. Send all routing updates to Central Reference (Room 75, OEOB). Always return completed correspondence record to Central Files. Refer questions about the correspondence tracking system to Central Reference, ext. 2590. 5/81 118555.CS Document No. WHITE HOUSE STAFFING MEMORANDUM DATE: 3/14/83 ACTION/CONCURRENCE/COMMENT DUE BY: 3/17/83 SUBJECT: DRAFT PRESIDENTIAL DECISION MEMORANDUM RE COMMISSION ON U.S. TRADE POLICY ACTION FYI ACTION FYI VICE PRESIDENT GERGEN MEESE HARPER BAKER JENKINS DEAVER MURPHY STOCKMAN ROLLINS CLARK WHITTLESEY DARMAN P ISS WILLIAMSON DUBERSTEIN VON DAMM FELDSTEIN BRADY/SPEAKES FIELDING ROGERS FULLER Remarks: May we have your comments on the attached memorandum by close of business Thursday, March 17. Thank you. Richard G. Darman Assistant to the President (x2702) Response: THE UNITED STATES TRADE REPRESENTATIVE WASHINGTON 20506 February 4, 1983 MEMORANDUM FOR THE PRESIDENT FROM: WILLIAM E. BROCK SUBJECT: Presidential Commission on U.S. Trade Policy This memorandum recommends that you establish a new Commission to examine the foundations for U.S. trade policy and to recommend a trade policy for the 1980's. PROBLEM Public support for an open trade policy is rapidly eroding because of a growing perception that our trade policy, our trade laws, and our inter- national trade agreements are not ensuring fair and equitable treatment for American firms engaged in international trade. This erosion of support for free and open trade has manifested itself in the form of intense political pressure for protectionist action. As a result, a national debate has evolved over the future direction of U.S. trade policy. Unless the Administration can initiate decisive action, this national debate could easily degenerate into partisan demagoguery ultimately resulting in protectionist solutions. BACKGROUND Previous Administrations have managed protectionist pressures by strength- ening the world trading system through multilateral trade negotiations. These negotiations were intended to liberalize world trade and to improve the trading rules. Unfortunately, in the current protectionist climate, our trading partners are simply unwilling to enter into multilateral negotiations today. This became abundantly clear during the GATT Ministerial when our trading partners only hesitantly accepted an obliga- tion not to adopt new protectionist measures and refused to expand the GATT's mandate to deal with the emerging trade problems. In light of our need to contain protectionist pressures and of the difficulty we will certainly encounter in seeking a multilateral solution to our current trade problems, I believe it is imperative for your Administration to initiate a new, activist -- but not protectionist -- open trade strategy. Such a strategy should ensure that international trade can continue its important role in disciplining our economy. -2- One element of this strategy is the formation of a Presidential Com- mission to make concrete recommendations for a trade policy designed to defend U.S. trade interests, thereby strengthening the consensus for free and open trade. The Commission would consist of leaders and trade experts from business, labor, agriculture, and academia, and would work toward re-establishing the bipartisan approach to trade policy that existed up until recent times. Consideration was given to Congressional representation on the Commission, but it was felt that such participation by the Congress would distort the objectivity of the Commission's findings. However, an informal liaison will be established between the Commission and all interested parties, including the Congress, private trade experts, and existing advisory committees (e.g., the Advisory Committee on Trade Negotiations). By engaging all interested parties in its work, the Commission will focus the debate on trade policy in a fashion so as to ensure that the Administration maintains the initiative on this issue. In addition to giving us a means for managing domestic protectionist pressures, the new Commission can also provide useful insight on how to approach emerging trade issues. The trading system has changed fundamentally since the GATT was first conceived in 1947. At that time, a homogenous group of 23 nations acceded to the GATT as a means for preserving inter- national competition by disciplining government intervention in the form of trade barriers. Today, the GATT has a heterogenous membership of 87 nations, some of which do not have market economies. Both developed and less developed members have adopted new, sophisticated nontariff barriers that are not directly addressed by the GATT. The replacement of fixed exchange rates with floating exchange rates in 1971 has dramatically heightened the impact of foreign exchange movements on trade flows. Because of these developments, the GATT framework may not be fully capable of dealing with the trade problems that we face today and will probably face tomorrow. And, since our domestic laws are designed around the GATT framework, they too may need review. The Presidential Commission on Trade Policy would analyze from a long-term perspective how U.S. trade interests have been and will be affected by the changing nature of the trading system, and may recommend a new international and domestic legal framework for addressing the emerging trade issues of the 1980's. The organization of the Executive Branch for trade administration and policy formation would not, however, be a part of the Commission's work program. RECOMMENDATION That you establish a blue-ribbon Presidential Commission with membership drawn from industry, labor, agriculture, and academia, to analyze the problems and challenges of U.S. trade policy, to assess the effectiveness of domestic and international discipline and procedures in dealing with these problems, and to recommend an appropriate trade policy for the 1980's. APPROVE DISAPPROVE Attachment PRESIDENTIAL COMMISSION ON U.S. TRADE POLICY Objective: To re-establish a bipartisan approach for an open U.S. trade policy designed to maintain trade as an effective discipline on the U.S. economy, and to establish a framework for addressing the emerging trade issues of the 1980's. Mandate: The Commission would be mandated to: 1) Study the factors and developments that have influenced the evolution of the world trading system and assess how international and domestic trade laws and institutions have adjusted to these developments. 2) Assess the effectiveness of existing international and domestic trade laws and institutions in: -- facilitating adjustment to changing world cost and price relationships; disciplining unfair government intervention which distorts trade patterns and undermines the efficient allocation of goods and services worldwide; and -- providing a framework for expeditiously resolving trade disputes. 3) Determine the extent to which government intervention in the international marketplace has artificially influenced the evolution of comparative advantage and international trade, thereby shifting the burden of unemployment. 4) Recommend a trade policy of the 1980's designed to deal with the new realities of international trade in a fashion so as to maintain international trade as a discipline on the U.S. economy. Budget: $1 million assuming most of the personnel can be detailed to work for the Commission from Executive agencies on a nonreimbursable basis. Staff: The staff would work under the direction of David R. Macdonald, retiring Deputy United States Trade Representative, as Executive Director, and would include eight professional staff members and six support staff. Membership: The Commission would consist of up to 25 members drawn from the following list: 2 Agriculture Robert Delano, President, American Farm Bureau Federation James Dutt, Chairman and CEO, Beatrice Foods Company James Ferguson, Chairman and CEO, General Foods Corporation William Pearce, Corporate Vice President, Cargill, Inc., and Former Deputy U.S. Trade Representative Claire Sandness, Chairman, Land O'Lakes, Inc. Robert Schaeberle, Chairman and CEO, Nabisco Brands, Inc. Clayton Yeutter, President, Chicago Mercantile Exchange, and Former Deputy U.S. Trade Representative Industry James Bere, Chairman and, CEO, Borg-Warner James Burke, Chairman and CEO, Johnson and Johnson Williard Butcher, Chairman, Chase Manhattan Corporation Joseph Flavin, Chairman and CEO, The Singer Company Robert Ingersoll, Former Ambassador to Japan, and Former CEO, Borg- Warner Reginald Jones, Former Chairman, General Electric Company Paul Lyet, Former Chairman and CEO, Sperry Corporation, and Chairman of the President's Export Council Robert Malott, Chairman and CEO, FMC Corporation James McKevitt, President, National Federation of Independent Businessmen Lee Morgan, Chairman and CEO, Caterpillar Tractor Company John Opel, Chairman and CEO, International Business Machines Corporation Edmund Pratt, Chairman and CEO, Pfizer, Inc., and member of the President's Export Council Donald Rumsfeld, President and CEO, G. D. Searle Irving Shapiro, Former Chairman, E. I. DuPont De Nemours Mark Shepherd, Jr., Chairman and CEO, Texas Instruments, Inc. Edson Spencer, Chairman and CEO, Honeywell Labor Murray Finley, President, Amalgamated Clothing and Textile Workers Union Douglas Fraser, President, United Automobile, Aerospace and Agricul- tural Implement Workers of America John Lyons, President, International Association of Bridge, Structural, and Iron Workers Charles Pillard, President, International Brotherhood of Electrical Workers Glenn Watts, President, Communications Workers of America Academia Robert Baldwin, Professor, University of Wisconsin Barbara Franklin, Senior Fellow in Public Management, Wharton School, University of Pennsylvania Robert Hudek, Professor of Law, University of Minnesota John Jackson, Professor of Law, University of Michigan, Former General Counsel of USTR D. Gale Johnson, Professor, University of Chicago Ray Vernon, Professor, Harvard University 3 Operation: The Commission would meet as necessary in Washington to review analyses of trade issues prepared by outside consultants under staff supervision. In addition, the Commission would solicit the views of all interested parties, and would establish informal liaison with existing advisory groups (i.e., the President's Export Council and the Advisory Committee on Trade Negotiations) as well as trade specialists and foreign governments. All input received by the Commission would provide a basis for its recommendations to the President. Timing: The Commission is expected to complete its work within nine to twelve months of the date of its establishment.