American Non-Rubber Footwear Industry Message to the Congress Transmitting a Report.

To the Congress of the United States:

In accordance with Section 203 (b) (1) of the Trade Act of 1974, enclosed is a report to the Congress setting forth the action that I am taking pursuant to that section with respect to import relief for the U.S. non-rubber footwear industry, and explaining the reasons for my decision.

JIMMY CARTER

The White House,

April 1, 1977.

IMPORT RELIEF--NONRUBBER FOOTWEAR

As required under section 203(b)(1) of the Trade Act of 1974, I am transmitting this report to Congress setting forth the actions I will take with respect to nonrubber footwear covered by the affirmative finding on February 8, 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 decisions:

I have determined that the import relief recommended by the Commission does not represent an appropriate balance among the industry, labor, consumer, and international interest involved:

1. The remedy would be highly inflationary and add substantially to consumer costs, particularly those of low and middle income purchasers of footwear.

2. While some jobs would be saved and some new jobs generated, the consumer cost per job would be excessive under the Commission remedy.

3. Imposition of a remedy as restrictive as that of the USITC would weaken U.S. leadership in international efforts to reduce trade barriers and would make it more difficult for other governments to deny increased protection to their industries that face increased import competition.

4. The Commission's allocation of its tariff rate quota among supplying countries is inequitable and would be particularly burdensome on developing countries.

5. Adversely affected countries would have the right to impose retaliatory restrictions against U.S. exports. Retaliation is normally avoided by granting compensatory U.S. tariff cuts on products of trade interest to the countries affected. But this means that other domestic industries and workers would pay a large bill for the high level of relief given to the shoe industry.

6. The USITC remedy would generate additional domestic production and jobs but special adjustment programs would also be required to help the weaker firms to become competitive in the long run. The breathing spell needed before the results of such a special program could be realized need not be as long as the five years recommended by the Commission.

In order to provide a better balance among the various elements of the national economic interest I have directed the Special Trade Representative to seek the necessary agreements with the appropriate foreign exporting countries to moderate the problems caused to our industry by rapid shifts in trade. This program is designed to allow the domestic industry to become more competitive. I have asked the Secretaries of Commerce and Labor to work closely with the Special Trade Representative to ensure effective use of the resources available under existing law for the benefit of the shoe industry and the communities in which shoe plants are located.

In addition, I am ordering a full review of the Government's trade adjustment assistance programs, and will recommend to the Congress within the next 90 days any legislation which may be warranted. This will coincide with the Special Trade Representative's negotiating effort, and in accordance with the law, we will present a detailed program of relief no later than 90 days from today.