Memorandum on Determination Under Secion 301 of the Trade Act of 1974

Memorandum for the Secretary of Commerce

Under Section 301(a)(1)(A) of the Trade Act of 1974, as amended (19 U.S.C. 2411(a)(1)(A)), I have determined that action is feasible and appropriate to enforce rights of the United States of America under the Memorandum of Understanding on trade in softwood lumber products, which was signed today by the Government of Canada and the Government of the United States of America. Fulfillment of the objectives and commitments in the Memorandum of Understanding is of critical importance. Therefore, I direct the Secretary of Commerce to determine periodically whether the Government of Canada and the Canadian provincial governments are fully imposing the export charge and any replacement measures therefor, as specifically agreed to in advance by the U.S. pursuant to the Understanding on softwood lumber products. If the Secretary of Commerce determiens that such exports charges are not being fully imposed, I will take action (includung the imposition of an increase in the tariff on softwood lumber imported from Canada) to offset any shortfall in the full imposition of the export charge or of the replacement measures therefor.

This agreement with the Government of Canada will enhance the ability of our softwood lumber industry to compete by negating the impact of Canadian provincial practices which the U.S. Department of Commerce preliminarily determined to confer subsidies.

This agreement successfully addresses the problems that led the U.S. softwood lumber industry to file a petition under the countervailing duty law with the Department of Commerce. As a result, the U.S. industry is withdrasing its petition and the Department of Commerce will terminate its investigation.

Under the Memorandum of Understanding, the Government of Canada will impose a 15 percent tax on exports of softwood lumber to the United States. This tax may be phased out proportionately as the Canadian provinces increase the charges imposed on softwood lumber production.

This memorandum shall be published in the Federal Register.

RONALD REAGAN

THE WHITE HOUSE

Washington, December 30, 1986.