Memorandum From the President on the American Stainless Steel Table Flatware Industry

Memorandum for the Special Representative for Trade Negotiations

Subject: Determination Under Section 202(b) (1) of the Trade Act; Stainless Steel Table Flatware

Pursuant to section 202(b) (1) of the Trade Act of 1974 (19 U.S.C. 2252(b) ( 1 )), I have determined the action I will take with respect to the report of the United States International Trade Commission (USITC), transmitted to me on May 8, 1978, concerning the results of its, investigation of a petition for import relief filed by the Stainless Steel Flatware Manufacturers Association, Washington, D.C., on behalf of the domestic industry producing knives, forks, spoons, and ladles, with stainless steel handles, provided for in items 650.08, 650.09, 650.10, 650.12, 650.38, 650.39, 650.40, 650.42, 650.54, 650.55, and, if included in sets, 651.75 of the Tariff Schedules of the United States.

After considering all relevant aspects of the case, including those considerations set forth in section 202(c) of the Trade Act of 1974, I have determined that provision of import relief is not in the national economic interest.

The imposition of import relief would not be an effective means to promote adjustment in the industry. The dominant firm in the domestic industry currently utilizes the most advanced manufacturing equipment and, along with a number of smaller firms, should remain profitable. Most major domestic producers of flatware currently rely on imports in a substantial and increasing degree to supplement the particular product lines in which they specialize and this trend is expected to continue. Import relief in the form of a tariff rate quota has been in effect for 13 out of the past 20 years in order to facilitate adjustment in this industry and additional relief would be inappropriate. Providing import relief again would be inconsistent with the internationally accepted concept that import relief in escape clause cases should be of a temporary nature.

Import relief would substantially increase costs to consumers, have an adverse impact on consumer demand, and discriminate against low-income purchasers. Consumer costs may increase even further if the moderating influence that low price imports have on the prices of domestically produced flatware is eliminated. In a time when we are striving to control inflation, these added costs are unacceptable.

Employment losses since 1975 have been small and many of the unemployed workers are currently receiving trade adjustment assistance benefits. The USITC estimates that overall domestic production of flatware should gradually increase even in the absence of relief and this should have a stabilizing effect on the number of jobs in the industry. Further, expedited consideration of adjustment assistance petitions from workers, firms, and communities is still in effect as a result of the Presidential determination on the 1976 import relief case.

This determination is to be published in the FEDERAL REGISTER.

JIMMY CARTER