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2. That it reaffirms its commitment to implement the provisions of the "Tokyo Declaration,” particularly with regard to the special benefits for developing countries. Thus, the “Tokyo Declaration" is an additional commitment among those constituting the inter-American system,
3. That pursuant to the provisions of Article XXXVI.8 of the General Agreement on Tariffs and Trade, “reciprocity" will not be expected of the developing countries for concessions that may be made during the Multilateral Trade Negotiations.
4. That its consultations with Latin America are to be continued within the framework and in accordance with the procedures of the Special Committee for Consultation and Negotiation (CECON), and will be held before measures are adopted that might adversely affect the countries.
5. That in all cases of the Act's application, the President will interpret its provisions in light of the interests of the countries of Latin America.
6. That it reiterates its readiness to hold consultations within the Special Committee for Consultation and Negotiation in order to coordinate its positions with those of the Latin American countries during the Multilateral Trade Negotiations, as well as any bilateral consultations that might be desirable.
7. That the President will shortly make known the list of countries eligible as beneficiaries of the generalized system of preferences and the list of products proposed for inclusion in the system.
8. That under the provisions of the Act, the Administration must submit to the Congress a report on the operation of the generalized system of preferences and that the experience obtained in its application will contribute toward its improvement.
For the U.S. Memorandum of Mar. 10, 1975, the report of Committee I summarizing the comments of various states, including the U.S., on the agenda item, and the report approved at the fifth plenary session of the CIES on the Trade Act of 1974, see Final Report of the Tenth Annual Meeting of CIES, Doc. OEA/Ser.H/X.24, CIES/3116, May 13, 1975. For the full text of Deputy Secretary Ingersoll's statement of Mar. 12, 1975, see Dept. of State Bulletin, Vol. LXXII, No. 1869, Apr. 21, 1975, pp. 504–506.
The General Assembly of the OAS, at its fifth regular session, held at Washington May 8–19, 1975, approved a resolution, AG/RES.199(V-0/75), on May 19, 1975, entitled "The Trade Act of 1974 of the United States and the Principles of the Inter-American System,” in which it noted the United States statements at the Tenth Annual Meeting of CIES regarding its concerns at the possible exclusion of Venezuela and Ecuador from GSP and its hopes to achieve a speedy and favorable solution for the Latin American countries before the system enters into effect. It also took note of the speech of President Ford to the joint session of Congress on Apr. 10, 1975, urging the legislative branch to reconsider the provisions in question.
The operative paragraphs of the resolution of May 19, 1975, concerning the Trade Act and the principles of the inter-American system follow:
THE GENERAL ASSEMBLY
is taking on amending the Trade Act of 1974 to eliminate the exclusion
system for the United States of America to amend the provisions of the Act that the Latin American countries consider discriminatory and coercive, most of which were the object of the Latin American Declara
tion of CECON of December 12, 1974; and b. Urge the Government of the United States of America to continue and
complete the process of its amendment of the Trade Act of 1974, in conformity with the principles and standards of the Charter of the
OAS. 2. To have the Permanent Council submit to the sixth regular session of the General Assembly a report on the progress made in amending that Act.
The OAS General Assembly also adopted, on May 19, 1975, a resolution, AG/ RES. 201 (V–0/75), entitled "Multilateral Trade Negotiations in View of the Provisions of the Trade Act of the United States of America."
The operative paragraphs of that resolution read as follows:
THE GENERAL ASSEMBLY,
1. To accept the report of the Permanent Council on the Trade Act of 1974 of the United States of America (AG/doc.544/75) and the report of the InterAmerican Economic and Social Council to the General Assembly of the OAS on that Act (AG/doc.543/75);
2. To take note of the often-repeated concern of the Latin American countries about the rigidities, restrictions, capacity for retaliation, and the discretionary provisions contained in titles I, II, III, and V of the Trade Act of the United States of America, with particular regard to:
a. Countervailing duties; b. Sensitive imports;
Safeguard clauses; d. Retaliatory measures;
Adjustment measures in relation to the developing countries; f. Failure to include products of special interest to Latin America in the
generalized system of preferences of the United States; g. The limitations deriving from application of the formula on competi
tion; h. The provisions on standards of origin; i. Associations of developing countries that produce and export raw
materials; j. The use of export incentives by developing countries; and k. Possible erosion of the generalized system of preferences of the United
States as a result of the Multilateral Trade Negotiations. 3. To express the political will of the member states to make operative in the Multilateral Trade Negotiations the principles of the Declaration of Tokyo, termed by the United States a commitment additional to those which make up the inter-American system, as they pertain to the Multilateral Trade Negotiations of Geneva, including, among other things, the following objectives as set forth in the aforesaid declaration:
Additional benefits for the foreign trade of the developing countries; b. An increase in their foreign exchange earnings;
Diversification of their exports; d. An accelerated growth rate for their trade, bearing in mind their
trade; f. The adoption, wherever appropriate, of measures for achieving stable,
equitable, and remunerative prices for their products; g. No expectation of reciprocity for the concessions that the developed
countries, including the United States of America grant in negotiations on lowering or eliminating tariff and other types of restrictions on the trade of the developing countries; that is to say, the developed countries, the United States of America included, do not expect the developing countries in the course of the trade negotiations to make contributions which are inconsistent with their individual development, financial, and trade needs;
h. The adoption during the negotiations of special measures to help
developing countries in their efforts to increase their export earnings
and promote their economic development; and i. Giving priority attention, wherever appropriate, to products or sectors
of interest to the developing countries, using approaches that give them special and more favorable treatment in the negotiation sectors,
wherever possible and appropriate. 4. To note with satisfaction the stated intentions of the United States to reaffirm its recognition of the importance of maintaining and improving the generalized system of preferences, as expressed in the Declaration of Tokyo; to seek to implement the system as soon as possible; and once it is put into practice, to use the experience gained from its application to improve the system, paying particular attention to the interests of Latin America.
5. To reaffirm the willingness of the member states to intensify their consultations through all present channels in the inter-American area so that: a. The Trade Act of the United States and especially its discretionary
powers will be applied by the United States in conformity with the provisions of the Charter of the OAS and the other commitments already assumed by the United States under the inter-American system, and taking into account the pertinent articles of the Charter of Economic Rights and Duties of States, so that real benefits are obtained from the foreign trade of the developing countries in general
and of the Latin American countries in particular; b. The Latin American countries do not suffer adverse effects from the
application of the Trade Act of the United States of America; and c. Information is exchanged and joint analysis is made of the proposals of
the member countries of the system during the Multilateral Trade Negotiations pertaining to matters such as nontariff questions, includ. ing the concept of differentiation in favor of the developing countries with respect to export subsidies, the characterization of incentive policies, countervailing duties, sanitation, packaging and labeling regulations, other nontariff restrictions, and the structuring of an inter: national system of safeguards, so that the Government of the United States will be aware of the proposals of the developing countries of the region and therefore have ample authority to include these interests in the positions it takes during the course of the Multilateral Trade
Negotiations. 6. To reiterate, with respect to the provisions of the Trade Act of the United States, the importance of the prior consultation procedures and the need to comply with the provisions of resolution CIES-REM 1/70 and the rules of procedure for the Meetings of Consultation of CECON.
7. To ratify the mandates of the Inter-American Economic and Social Council (CIES) to the Special Committee for Consultation and Negotiation (CECON).
8. To recommend to the General Secretariat that it make use of the flexibility provided by the present rules of procedures for allocation of all the resources that CECON needs to carry out the mandates assigned to it. Also, to instruct the General Secretariat to prepare, as support for the work of CECON, a program for the next budgetary biennium so that it will be able to attend efficiently to the needs of the member governments of the system.
For the full texts of the OAS resolutions of May 19, 1975, see Proceedings of the Fifth Regular Session, May 8-May 19, 1975, Vol. 1, OEA/Ser.PNV-0.2, June 11, 1975, Vol. 1, pp. 38-39, and 43-46.
On March 24, 1975, President Ford issued Executive Order 11844, designating 89 countries and 43 dependent territories as beneficiary developing countries for the purpose of participation in the new U.S. system of generalized tariff preferences under the Trade Act of 1974 (P.L. 93-618; 88 Stat. 1978), approved January 3, 1975. Title V of that Act authorizes the President to join with 18 other developed countries in implementing a generalized system of preferences (GSP). The U.S. system provides duty-free treatment, within certain specified limits, for imports of a broad range of manufactures and semi-manufactures and of selected agricultural and primary industrial products from developing countries for a period of up to ten years, for the purpose of stimulating their economic development and improving U.S. economic relationships with them.
To implement the GSP, the Trade Act requires (1) designation of beneficiary developing countries, (2) publication and transmission to the International Trade Commission (ITC—formerly the Tariff Commission of the list of articles which will be considered for designation as eligible articles for purposes of generalized preferences, and (3) submission by the International Trade Commission of its advice within six months as to the probable economic effect on domestic producers and consumers of implementing generalized preferences for those listed articles.
In addition to designating beneficiary countries, the Executive order listed 24 other countries whose eligibility was under active consideration, and requested ITC consideration of the impact of duty-free import of articles under consideration from those countries as well. The list included all members of the Organization of Petroleum Exporting Countries (OPEC) and several other countries that could be affected by the eligibility provisions of the Trade Act (Section 502; 19 U.S.C. 2462).
Sec. 502(b) of the Trade Act denies participation in the U.S. preference system to countries that engage in such actions as expropriation of U.S. property without adequate compensation in violation of international law, or that grant preferential treatment to imports from other developed countries with a resulting significant adverse effect on U.S. commerce. Communist countries are also ineligible under Sec. 502 unless they receive most-favored-nation tariff treatment in the U.S. market, are members of the General Agreement on Tariffs and Trade and the International Monetary Fund, and are not "dominated or controlled by international communism.”
Fed. Reg., Vol. 40, No. 59, Mar. 26, 1975, pp. 13295–13299. See also H. Doc. 94–85, 94th Cong., 1st Sess.; Dept. of State Bulletin, Vol. LXXII, No. 1869, Apr. 21, 1975, pp. 506_507.
Eighteen of the countries designated as eligible beneficiary countries had investment disputes with the United States but were determined by the President, under Sec. 502(b)(4)(D)(ii) of the Trade Act of 1974, to have entered into good-faith negotiations for prompt, adequate, and effective compensation, or otherwise to have taken steps to discharge their obligations under international law. Presidential Determination No. 75–11, Mar. 24, 1975; Fed. Reg., Vol. 40, No. 67, Apr. 7, 1975. See ante, Ch. 9, § 2, p. 486.
President Ford, on Mar. 24, 1975, also issued a list of products as to which the Administration proposed, subject to public hearings and ITC advice, to eliminate import duties for the beneficiary developing countries for a period of ten years. Fed. Reg., Vol. 40, No. 59, Mar. 26, 1975, pp. 13456–13457.
On November 10, 1975, President Ford sent a letter to the Speaker of the House and to the President of the Senate announcing his intention to designate additional beneficiary countries and territories for purposes of GSP. This was to be done by amending Executive Order 11844 of March 24, 1975. The President stated that the exclusionary provisions of the Trade Act would apply to some of the countries to be designated except for the factors described below:
The tariff preferences that Cyprus extends to the products of member countries of the European Economic Community ("E.E.C.") and the Commonwealth countries do not have, and are not likely to have, significant adverse effects upon United States commerce. Accordingly, the exclusionary provisions of section 502(bX3) of the Trade Act do not apply to Cyprus. Israel
I have received satisfactory assurances that Israel will take action prior to January 1, 1976, to assure that, although Israel affords preferential treatment to products of other developed countries (those of the E.E.C.), there will be no significant adverse effect on United States commerce resulting from such preferential treatment.
In particular, the Government of Israel has provided satisfactory assurances that, for specified U.S. exports to Israel worth some $92 million (1974 data), Israel will reduce the applicable most-favored-nation (MFN) duty rates so as to eliminate, or in some cases virtually eliminate, the margin between such MFN rates and the preferential tariff rates being applied to the same products from E.E.C. countries. In addition, Israel will eliminate, at least during the life of the U.S. GSP, margins between the E.E.C. preferential tariff rates and the MFN rates whenever specified conditions are met for certain products. These products have been identified by the United States as important exports for which the U.S. and the E.E.C. countries are serious commercial competitors and for which tariff preferences, if applied, would be likely to affect adversely U.S. commercial interests. Israel will eliminate preferential tariff margins on these products whenever specific statistical criteria are met. Israel also will consult with the United States, at our request, concerning any other U.S. exports which may be affected adversely by its tariff preferences for products of E.E.C. countries.
For these reasons, Israel qualifies for the GSP under the terms of section 502(b)(3) of the Trade Act of 1974.