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Department of State bulletin (Volume v. 46, Jan- Mar 1962) online

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world exports. Tariff reductions or eliminations
under this authority may be made on agricultural
products whicli do not meet the SO percent "dom-
inant supplier" rule, provided the President finds
that such action will tend to assure the maintenance
or expansion of U.S. exports of such products.

(c) Special Authority for Tropical Agricul-
tural and Forest Commodities. Tlie President is
authorized to reduce or eliminate tariffs on any
tropical agricultural or forest commodity or pri-
mary products thereof if the EEC agrees to take
similar action on a nondiscriminatory basis and if
the commodity or product is not produced in sig-
nificant quantities in the U.S.

(d) Low-Duty Authority. The President is
authorized to eliminate tariffs on products which
are dutiable at a rate of 5 percent or less.

2. Prerequisites to Negotiations

(a) Tarijf Commission Advice Prior to Nego-
tiations. The President must furnish the Tariff
Commission with a list of the products or product
categories on which negotiations are proposed.
Within 6 months of receipt of the list, the Tariff
Commission is required to advise the President
as to the economic effect of reductions or elimina-
tions of duties. The Tariff Commission may hold
hearings in the course of its investigations. The
President may not enter into a trade agreement
until he has received the advice of the Tariff
Commission or until the expiration of the
G-month period, whicliever is the earlier.

(b) Reserve List. The President is required
to reserve from trade agreement negotiations any
product subject to an escape clause or national
security action taken under this or prior trade
agreement acts. He may also reserve such addi-
tional products as he deems appropriate.

(c) Notice. Tlie President is required to give
public notice of intention to enter into trade agree-
ments and provide opportunity for presentation
of public views, including views on tlie reservation
of any article from the negotiations.

(d) Transmission to Congress. The President
must transmit to the Congress any trade agree-
ment entered into under this act, stating in the
light of the advice received from the Tariff Com-
mission and other relevant considerations his
reasons for entering into the agreement.



3. National Security Provision

(a) Suspension of Benefits to Communist
Countries. Tlie bill continues the existing pro-
vision that the President shall deny the benefits
of trade agreement concessions to the U.S.S.R.
and to countries wliich are dominated or controlled
by international communism.

(b) Safeguarding National Security. The bill
repeats practically verbatim the present provision
of the trade agreements legislation relating to
national security. Under this provision the
President is required to restrict imports when he
determines that an article is being impoiled into
the United States in such quantities or under
such circumstances as to threaten to impair the
national security.

4. General Provisions

(a) Most-Favored-Nation Principle. All tar-
iff reductions made under this act will be gen-
eralized on a most- favored-nation basis except for
the discriminatory action specifically authorized
with respect to the Communist bloc. This MFN
principle applies not only to the general negoti-
ating authority but also to the special authority
for negotiations with the EEC, the tropical prod-
ucts authority, and the low-duty authority.

(b) Suspension of Benefits. As in present leg-
islation, the President is authorized to suspend
trade agreement benefits to any country which
discriminates against U.S. commerce or engages
in other actions which in the opinion of the Presi-
dent tend to defeat the purposes of this act.

(c) Staging Requirements. Tariff reductions
made under this trade agreements authority are
in general to take effect in not less than five equal
annual installments. They may take effect in un-
equal intervals and amounts provided the siun
of reductions at any one time does not exceed
what would occur under five equal installments.
No staging is required for reductions of not more
than 25 percent of the existing rate or actions
taken under the tropical products or low-duty
autliority.

(d) Status of Existing Escape Clause and Na-
tional Security Actions. Past actions taken to
grant relief under the escape clause and national
security provisions of prior legislation will con-
tinue in effect except that escape clause actions
taken more than 3 years before the effective date



344



Department of Sfafe Bullefin



of the new act will terminate 1 year thereaft«r
unless extended by the President.

Title III - Adjustment Assistance

1. Forms of Adjustment Assistance. The bill
provides the following forms of adjustment assist-
ance to meet difficulties due to increased imports
of like or directly competitive articles as a result
of tariff concessions :

(a) Asshtance to Firms. This includes: (1)
technical assistance, (2) various forms of finan-
cial assistance, and (3) tax relief in the form of
special carryback of operating losses.

(b) Assistance to Workers. This includes: (1)
readjustment allowances in the form of compensa-
tion for partial or complete unemployment, (2)
retraining of workers for other types of employ-
ment, and (3) relocation allowances to assist fam-
ilies in moving to an area where employment may
be available.

(c) Assistance to Industries. In extraordinary
cases where the foregoing types of assistance may
be inadequate to mitigate the difficulties involved,
the President is authorized to apply increased
duties or other import resti'ictions. Under this
authority, the President may increase the duty for
any article to a rate not more than 50 percent
above that existing on July 1, 1934, or may impose
a duty not to exceed 50 percent ad valorem on a
free-list item. Such extraordinary relief will ex-
pire at the end of 4 years unless the President
determines that the national interest requires its
extension for a longer period. This form of relief
may be provided in addition to or as a substitute
for other forms of adjustment assistance.

2. EligibiUty for Adjustment Assistance

(a) Procedures. Petitions for determination of
eligibility to apply for adjustment assistance for
firms and workers will be filed with the President.
Before making a determination as to eligibility,
the President must secure advice from the Tariff



Commission on the extent to which imports of
like or directly competitive articles have increased
as a result of a tariff change made in a trade agree-
ment. As regards extraordinary relief for indus-
tries, applications are to be filed with the Tariff
Commission, which will advise the President
whether the adverse conditions set forth below
exist. The President will make the ultimate deter-
mination as to the granting of extraordinary
relief.

(b) Standards. A firm will be eligible to apply
for adjustment assistance if increased imports re-
sulting from a trade agreement concession are
determined to be causing or threatening to cause
any one of the following three conditions: (1)
significant idling of the productive facilities of
the firm, (2) prolonged and persistent inability
of the firm to operate at a profit, or (3) unemploy-
ment or underemployment of a significant number
of the workers of the firm. Only the third stand-
ard as to unemployment or underemployment as
a result of increased imports due to a tariff conces-
sion is applicable to detemiination of the eligibil-
ity of workers of a firm or an appropriate
subdivision thereof to apply for adjustment
assistance. All three standards must be met to
determine eligibility of an industry to obtain
extraordinary relief.

3. Administration. Adjustment assistance will
be administered through existing agencies and pro-
grams of the executive branch. Matters relating
to assistance to firms will be referred to the De-
partment of Commerce and other interested agen-
cies, includmg the Small Business Administration.
Matters relating to assistance to workers will be
referred to the Department of Labor and other
interested agencies. An interagency Adjustment
Assistance Advisory Board chaired by the Secre-
tary of Commerce will be established to advise
the President and the administering agencies on
the development of programs for adjustment as-
sistance to firms and workers.



februaty 26, 1962



345



THE CONGRESS



Status of U.S. Trade Relations With Yugoslavia and Cuba

Statement by Secretary Rusk '



I am very pleased to have this opportunity to
discuss further with you our policies and prob-
lems in the field of export controls. In your letter
of January 18,^ Mr. Chairman [Kepresentative A.
Paul Kitchin], you raised two important general
questions. Several additional points were raised
by the committee staff. I would like to discuss
now those basic questions raised in your letter,
and I am prepared at your pleasure to respond to
the questions provided by the committee staff.

U.S. Policy Toward Yugoslavia

First, Mr. Chairman, with regard to your ques-
tion on the status of our relations with Yugo-
slavia: Last October, before this committee, I
indicated that our policy is similar to that toward
trade with any friendly European or neutralist
country and that Yugoslav requests for eco-
nomic and technical assistance are considered on
their merits. I also indicated that the develop-
ments within that country which are encouraged
and facilitated by our policy are definitely in the
interests of the United States and the free world.
The facts continue to bear out the usefulness of
that policy.

The decision, taken more than a decade ago, to
provide assistance and support to Yugoslavia, an
avowedly Communist counti-y which had broken
away from the Soviet bloc, was imaginative and
courageous. At that time it was recognized that
this decision involved the risk that our assistance
would ultimately strengthen the Soviet bloc, in
the event Yugoslavia, by desire or necessity, re-
turned to the bloc. It was also apparent, however,
that this decision provided an opportunity to de-
termine whether peaceful evolutionary changes
could occur in Communist countries, whether a
Communist country could break away fi-om Mos-



•Made before the House Select Committee on Export
Control on Feb. 5 (press release 80).
' Not printed.



cow's domination and establish its independence,
and whether the West could establish relations
with such a country more fruitful than those lim-
ited relations we had come to expect with the mem-
bers of the Soviet bloc. The results of our policy,
based on that decision and carried out over a
decade, have more than met our expectations.

The independence of Yugoslavia has been fii-mly
established. Yugoslav support was withdrawn
from the civil war in Greece. The Trieste ques-
tion was resolved. Border and minority issues
with Austria were shelved. Albania was geo-
grapliically isolated from the Soviet bloc, thus
permitting its ultimate defiance of Moscow. And
finally, during the ensuing decade the Yugoslavs
developed a politicoeconomic system which differs
markedly from that of the Soviet Union. Yugo-
slavia remains the outstanding example of suc-
cessful defiance by a Communist country of Soviet
imperialism. It has shown the world that escape
from the Soviet system is possible and that devel-
opment in close cooperation with the West pro-
duces results superior to those possible under the
tutelage of the Soviet Union.

These developments have resulted in closer and
more constructive relations between Yugoslavia
and the West. These developments have also be-
come institutionalized in Yugoslavia and would be
difficult to reverse. We can confidently expect con-
tinuing benefit to the West from Yugoslavia's
position. We can also expect this important area
in the Balkans to continue to be denied to the
Soviet Union if our policy continues to acknowl-
edge, support, and respect the independence the
Yugoslavs are determined to maintain.

Yugoslavia Strengthening Ties With West

In explniiiing our policy toward Yugoslavia we
are frequently asked questions that i-eveal a con-
cern about its basic relationship to the United



346



Deparfmenf of State Bulletin



States. We are reminded that Yugoslavia is not
an ally, despite United States aid. We are asked
whether Yugoslavia is truly a friendly coimtry.
And we are reminded that Yugoslavia is, after all,
still a Commimist country. To this I would say
that we would make a mistake if we were to limit
our attention to those things which our policy is
not designed to achieve and wluch we have never
cont



Online LibraryUnited States. Dept. of State. Office of Public CoDepartment of State bulletin (Volume v. 46, Jan- Mar 1962) → online text (page 68 of 101)