Multilateral Trade Negotiations Message to the Congress Transmitting Proposed Legislation.

To the Congress of the United States:

I am today submitting to the Congress a proposal for legislation to extend for a brief period the authority of the Secretary of the Treasury under Section 303(d) of the Tariff Act of 1930 to waive the application of countervailing duties. I hope that the Congress will be able to enact the necessary legislation before adjournment sine die.

If not extended, the waiver authority will expire on January 2, 1979. This would seriously jeopardize satisfactory conclusion of the Multilateral Trade Negotiations (MTN) underway in Geneva. Unless the waiver authority is extended to cover the period during which the results of the MTN will be under review by the Congress, our ability to press ahead with the negotiations would be sharply limited.

As stipulated by the Congress in the Trade Act of 1974, negotiation of a satisfactory code on subsidies and countervailing duties is a primary U.S. objective in the MTN. The United States is seeking through such a code improved discipline on the use of subsidies which adversely affect trade. In our view, a satisfactory subsidy/countervailing duty code must include (1) new substantive rules on the use of internal and export subsidies which adequately protect United States agricultural and industrial trading interests insofar as they are adversely affected by such subsidies, and (2) more effective provisions on notification, consultation and dispute settlement that will provide for timely resolution of disputes involving the use of subsidies in international trade.

My Special Representative for Trade Negotiations has informed me that the prospects for reaching agreement by year end on a subsidy/countervailing duty code which meets basic U.S. objectives are good—provided that the waiver authority can be extended until such a code has been submitted to, and acted upon, by the Congress under the procedures of the Trade Act of 1974. In this connection, the legislation I am proposing would provide that the countervailing duty waiver authority will expire as scheduled on January 2, 1979, unless we are able to report to the Congress before that date that a subsidy/countervailing duty code has been negotiated among the key countries participating in the MTN and that the MTN itself has been substantially concluded.

Under the countervailing duty waiver authority, the imposition of countervailing duties may be waived in a specific case only if "adequate steps have been taken to eliminate or substantially reduce the adverse effect" of the subsidy in question. This provision and the other limitations on the use of the waiver authority which are currently in the law would continue in effect if the waiver authority is extended. Thus, U.S. producers and workers will continue to be adequately protected from the adverse effects of subsidized competition.

A successful conclusion to the MTN is essential to U.S. economic policy. If the waiver authority is not extended, such a successful conclusion will, as I have noted, be seriously jeopardized. Accordingly, I urge the Congress to act positively upon this legislative proposal as quickly as possible.

JIMMY CARTER

The White House,

September 28, 1978.

PROPOSED LEGISLATION

Section 303 of the Tariff Act of 1930 (19 U.S.C. 1303) as amended, is further amended by adding the following new sentence at the end of Subsection (d) (2).

"The four-year period specified in the first sentence of this paragraph shall be extended until August 1, 1979, provided that before January 3, 1979, the President informs both Houses of Congress that agreement on a code governing the use of subsidies and countervailing duties has been reached and that the Multilateral Trade Negotiations as a whole have been substantially completed and provided further that any determination by the Secretary of the Treasury made pursuant to this section and in effect on January 2, 1979, shall, notwithstanding any expiration date set forth therein, remain in effect until August 1, 1979, unless prior thereto the Secretary has reason to, and does, revoke such determination."