American Mushroom Industry Message to the Congress Transmitting a Report.

To the Congress of the United States:

In accordance with Section 203 (b) (2) of the Trade Act of 1974, enclosed is a report to the Congress setting forth my determination that import relief for the U.S. canned mushroom industry is not in the national economic interest, and explaining the reasons for my decision.

JIMMY CARTER

The White House,

March 10, 1977.

IMPORT RELIEF ACTION MUSHROOMS

As required under Section 203(h)(2) of the Trade Act of 1974, I am transmitting this report to the Congress setting forth the actions I will take with respect to mushrooms covered 'by the affirmative finding on January 10, 1977, of the United States International Trade Commission (USITC) under Section 201(d) (1) of the Trade Act. As my action differs from that recommended by the USITC, I have included the reasons for my decision:

I have determined that import relief for canned mushrooms is not in the national economic interest. As indicated below, the principal reasons for that determination include: (1) recent improvements in the domestic mushroom industry; (2) the high cost to U.S. consumers of the import relief recommended by the USITC and the relatively limited number of additional jobs such relief might create; (3) the existing availability of expedited adjustment assistance for workers and firms in the industry; (4) the potential retaliation against our own exports which import relief might engender, as well as the adverse foreign policy repercussions; (5) the existing voluntary export restraints agreed to by the principal foreign suppliers of canned mushrooms (the Republics of China and Korea); and (6) my intention to monitor canned mushroom imports and consult with the principal exporters, with a view toward avoiding disruptive impacts on the U.S. market.

The USITC reported that domestic conditions for both mushroom canners and growers have improved recently; fresh and canned mushroom prices as well as production, sales, and profits have increased in response to growing U.S. demand for mushrooms. The fresh mushroom segment of the industry has benefitted from these higher mushroom prices and there is no evidence of significant unemployment or idling of productive facilities in this area. Employment in mushroom canning plants has declined in recent years but it is estimated that the import relief recommended by the USITC would create or save something less than 100 jobs and at an extremely high cost to U.S. consumers.

U.S. demand for canned mushrooms has increased and inventories are currently drawn down. Were the USITC recommended tariff rate-quota system to be implemented, consumers could be faced with further large price increases in both canned and fresh mushrooms.

The European Economic Community has recently relaxed its import restrictions on mushrooms. Since its market can now absorb a larger share of world mushroom exports, import pressures on the U.S. market should be reduced.

Voluntary export restraints by the Republic of China (Taiwan) and the Republic of Korea will remain in effect until their scheduled expiration on June 30, 1977. In addition, I intend to continue to monitor mushroom imports and domestic market conditions. Should exports of mushrooms become a disruptive factor in the U.S. market, I will request consultations with the exporting government(s) involved.