Memorandum From the President on the Domestic Copper Industry

Memorandum for the Special Representative for Trade Negotiations

Subject: Determination Under Section 202(b) of the Trade Act, Unwrought Unalloyed Copper

Pursuant to section 202(b)(1) of the Trade Act of 1974 (P.L. 93-618, 88 Stat. 1978), 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 August 23, 1978, concerning the results of its investigation of a petition for import relief. This petition was filed by the Anaconda Co., Asarco, Inc., Cities Service Co. (Minerals Group), Copper Range Co., Cyprus Mines Corp., Duval Corp., Hecla Mining Co., Inspiration Consolidated Copper Co., Kennecott Copper Corp., Magma Copper Co., Phelps Dodge Corp., and Ranchers Exploration and Development Corp., on behalf of the domestic industry producing unwrought, unalloyed copper, provided for in item 612.06 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 import relief is not in the national economic interest for the following masons:

1. Import relief would impose significant costs on U.S. consumers of unwrought, unalloyed copper (refined copper). The increases in refined copper prices resulting from provision of relief could create incentives for circumvention of relief through increased imports of other copper products such as scrap, blister, and fabricated items. This would effectively reduce the level of protection provided to the domestic copper industry. Moreover, domestic copper fabricators would be faced with higher refined copper input costs and, at the same time, possible increased import competition in fabricated products.

2. Domestic copper market conditions have improved during 1978 and there is an improving outlook over the next several years for both the U.S. and world copper markets. U.S. and world copper prices have risen markedly during 1978 and the world inventory overhang has declined. Domestic refined copper production was up slightly during the first part of 1978; and imports have begun to decline from the high levels prevailing during the first part of the year.

3. Provision of import relief would subject U.S. jobs in other industries to possible foreign retaliation against U.S. exports or compensation by the United States in the form of reducing import restrictions on other products.

4. Import relief would adversely affect U.S. international economic interests. It would be contrary to our efforts to reduce trade barriers in the MTN and to develop cooperative international solutions to the world copper industry's problems in the context of discussions in the UNCTAD Integrated Program for Commodities. Import relief would also affect our bilateral relations with Canada and with LDC copper producers, such as Chile, Zambia, and Peru, who are heavily dependent on copper exports as a source of foreign exchange earnings.

5. Trade adjustment assistance benefits have been and will continue to be available to copper mine, smelter, and refinery workers.

This determination is to be published in the FEDERAL REGISTER.

JIMMY CARTER

[Filed with the Office of the Federal Register, 4:46 p.m., October 90, 1978]