Chapter 3 Actions of the United States Relating to Its Trade Agreements Program UNITED STATES TRADE-AGREEMENT OBLIGATIONS On June 30, 1958, the United States was a party to trade agreements with 43 countries, which agreements it had negotiated under the authority of the Trade Agreements Act, as amended and extended.1 These countries may be considered in two groups. 2 1. The first group consists of 35 countries that were contracting parties to the General Agreement on Tariffs and Trade on the aforementioned date. These countries, together with the dates on which the United States gave effect to the tariff concessions that it had initially negotiated with them, are listed below: Denmark... Dominican Republic.. Finland1. France1 July 30, 1948 Mar. 16, 1949 Luxembourg Japan. Sept. 10, 1955 Jan. 1, 1948 Jan. 1, 1948 Malaya1.. Do. Do. July 31, 1948 May 28, 1950 July 11, 1948 July 31, 1948 May 28, 1950 Netherlands1 Germany (Federal Republic). Oct. 1, 1951 Pakistan. See footnotes at end of tabulation. 1 For more detailed data on the trade agreements that the United States has concluded with foreign countries, see U.S. Tariff Commission, Trade Agreements Manual: A Summary of Selected Data Relating to Trade Agreements That the United States Has Negotiated Since 1934, 2d ed., 1957 [processed]. Four countries withdrew from the General Agreement between Oct. 30, 1947, and June 30, 1958-the Republic of China, Lebanon, Liberia, and Syria. On June 30, 1958, a total of 37 countries, including the United States, were contracting parties to the General Agreement. Although Czechoslovakia was a contracting party to the agreement on that date, neither Czechoslovakia nor the United States had any obligations to the other under the agreement. On Sept. 29, 1951, the United States, with the permission of the Contracting Parties, suspended all its obligations to Czechoslovakia under the General Agreement. Subsequently, effective Nov. 2, 1951, the United States suspended the application of tradeagreement concessions to imports from Czechoslovakia. 1 The bilateral trade agreements that the United States had previously concluded with these countries have been either suspended or terminated. 2 Ghana (formerly the British territories of the Gold Coast and Togoland) attained independence and became a member of the British Commonwealth of Nations on Mar. 6, 1957. On Oct. 17, 1957, it became a contracting party to the General Agreement in its own right. The agreement had previously applied to the Gold Coast as an area for which the United Kingdom had international responsibility. The Netherlands negotiated concessions on behalf of the Netherlands Indies at Geneva in 1947. On Feb. 24, 1950, the Contracting Parties recognized the United States of Indonesia (now the Republic of Indonesia) as a contracting party to the General Agreement in its own right. The Federation of Malaya attained independence and became a member of the British Commonwealth of Nations on Aug. 31, 1957. On Oct. 24, 1957, it became a contracting party to the General Agreement in its own right. The agreement previously had applied to Malaya as an area for which the United Kingdom had international responsibility. The Federation of Rhodesia and Nyasaland, composed of Southern Rhodesia, Northern Rhodesia, and Nyasaland, formally came into existence on Sept. 3, 1953. On Oct. 30, 1953, it succeeded to the status of Southern Rhodesia as a contracting party to the General Agreement, and to the interests of Northern Rhodesia and Nyasaland, to which the agreement previously had applied as areas for which the United Kingdom had international responsibility. 2. The second group consists of those eight countries that had trade agreements with the United States but were not contracting parties to the General Agreement. These countries, together with the effective dates of the respective bilateral trade agreements, are as follows: 1 A supplementary trade agreement between the United States and Switzerland became effective July 11, 1955. A supplementary trade agreement between the United States and Venezuela became effective Oct. 11, 1952. During the period covered by this report the United States invoked the provisions of the bilateral trade agreements with Argentina and with Iran to overcome restrictions on United States trade with those countries. When pertinent provisions of the United States-Argentina bilateral trade agreement were called to Argentina's attention, that country exempted the United States motion-picture industry from a tax on the exhibition of its films. Iran agreed to accord to shipments of automobile parts from Puerto Rico the same concessions that it grants to such products imported from continental United States.3 During 1957-58 the United States continued-as required by section 5 of the Trade Agreements Extension Act of 1951-to suspend the application to imports from Communist-controlled countries or areas, of reduced rates of duty and import taxes established pursuant to any trade agreement. The United States also continued-pursuant to section 11 of the extension act of 1951-to prohibit the entry, or withdrawal from warehouse, for consumption, of specified furs that are the product of the Soviet Union or of Communist China.4 TRADE-AGREEMENT NEGOTIATIONS DURING 1957-58 During the period covered by this report the United States participated in trade-agreement negotiations under article XXV of the General Agreement on Tariffs and Trade with Brazil and under article XXVIII of the General Agreement, with Austria, Canada, Ceylon, Greece, and the Union of South Africa. The United States carried out its preparations for the tariff negotiations with these countries under the procedures specified in the Trade Agreements Act, as amended and extended, and in Executive Order 10082 of October 5, 1949. Brazil On October 31, 1957, the interdepartmental Committee for Reciprocity Information issued notice that it would hold a public hearing, beginning December 5, 1957, to obtain views and information in connection with the proposed United States participation in tariff negotiations with Brazil. Such tariff negotiations were provided for in a waiver of certain Brazilian obligations under the General Agreement that the Contracting Parties granted to Brazil on November 16, 1956. At the 10th Session of the Contracting Parties in 1955, Brazil advised the Contracting Parties that it intended to submit a draft of a new customs tariff to the Brazilian Congress; the draft tariff was submitted to the Congress in 1956. According to Brazil its old tariff did not provide sufficient revenue or protection and the nomenclature was obsolete and confusing. For these and other reasons, Brazil stated, it had been forced to impose quantitative restrictions on imports and to adopt exchange controls. At their 11th Session the Contracting Parties discussed the effect of the proposed new tariff on Brazil's obligations under article II of the General Agreement. The Brazilian representative stated that although 'The President of the United States (Eisenhower), Second Annual Report on the Trade Agreements Program, 1958, p. 11. 'For details of United States action under secs. 5 and 11 of the Trade Agreements Extension Act of 1951, see Operation of the Trade Agreements Program (6th report), pp. 77-78. exchange controls would still be necessary to maintain currency stability and to assist in his country's economic development, the new tariff would result in no change in the volume or composition of imports. According to him, the new tariff would merely entail the obtaining from import duties of revenue currently obtained under the auction system of exchange control. Because of the urgency and exceptional nature of the circumstances it felt applied to its case, Brazil requested the Contracting Parties to grant it a waiver under the provisions of article XXV rather than under the provisions of article XXVIII, which are applicable to a complete tariff revision. Under the general waiver power provided for in paragraph 5 of article XXV, the Contracting Parties granted Brazil a waiver from the provisions of paragraph 1 of article II. Under the terms of the waiver, Brazil was relieved of the obligation to renegotiate existing tariff concessions before making effective the higher rates of its new tariff. However, Brazil was required to conduct such renegotiations within 1 year from the time its new tariff entered into force. The new Brazilian tariff, which became effective on August 14, 1957, not only involved changes in nomenclature but also substituted a new schedule of ad valorem rates of duty for the former specific rates. The new rates of duty, many of which are substantially higher than the old rates, also reflect incorporation into the customs tariff of part of the burden on imports represented by the former foreign-exchange premiums (agios), as well as other taxes on imports. The rates of duty in the new tariff have the effect of substantially modifying the concessions that Brazil has granted in the General Agreement, including those it has granted to the United States. The tariff negotiations between Brazil and other contracting parties to the General Agreement were designed to provide compensatory adjustments for the increases in the import duties on commodities listed in Brazil's schedule of the General Agreement. By June 30, 1958, the close of the period covered by this report, the article XXV negotiations between Brazil and other contracting parties to the General Agreement had not been completed. Austria, Canada, Ceylon, Greece, and the Union of South Africa On September 16, 1957, the interdepartmental Committee for Reciprocity Information requested interested parties to submit-by October 7, 1957-their views on the proposed United States participation in tariff negotiations, under article XXVIII of the General Agreement, with Austria, Canada, Ceylon, Greece, and the Union of South Africa. These countries were among those that had expressed a desire to avail themselves of the opportunity, on January 1, 1958, of modifying or withdrawing certain concessions in their schedules of the General Agreement. Article XXVIII of the General Agreement originally provided that contracting parties might, after January 1, 1951, modify or withdraw any tariff concessions that they had granted, without joint action by the Contracting Parties. At Torquay, the Contracting Parties extended the assured life of the tariff concessions in the General Agreement to January 1, 1954, and at their Eighth Session in 1953, again extended it, to July 1, 1955. During the review of the General Agreement at their Ninth Session, the Contracting Parties further extended the assured life of the tariff concessions by changing-to December 31, 1957-the date after which modifications in concessions might be made under article XXVIII without joint action by the Contracting Parties.5 A contracting party that desires to modify or withdraw a concession under the provisions of article XXVIII is first required to negotiate with the contracting party with which it originally negotiated the concession, and to consult with other parties that have a substantial interest in it. In such negotiations, provision may be made for compensatory concessions with respect to other products. If, in the negotiations, agreement cannot be reached between the parties concerned, the concession in question may nevertheless be modified or withdrawn. However, the country with which the concession was initially negotiated and the countries that have a substantial interest in it may thereupon themselves withdraw concessions substantially equivalent to those that were withdrawn from them. Austria, Canada, Ceylon, Greece, and the Union of South Africa, simultaneously with the negotiations that they conducted with the United States, negotiated with certain other contracting parties to the General Agreement, looking toward the modification or withdrawal of certain concessions they had initially negotiated with those contracting parties. By June 30, 1958, the close of the period covered by this report, the article XXVIII negotiations by the five countries mentioned above had not been completed. ACTIONS RELATING TO TRADE-AGREEMENT Entry Into Force of Trade-Agreement Concessions On June 29, 1958, the United States placed in effect the second stage of the tariff concessions on cigar tobacco that it granted to Cuba in the limited trade-agreement negotiations conducted with that country In 1955 at their 9th Session, the Contracting Parties also drafted an amendment to art. XXVIII that provides except in special circumstances for automatic extensions of the assured life of the tariff concessions for successive 3-year periods. The amended art. XXVIII became effective with respect to 25 contracting parties including the United States-on Oct. 7, 1957, during the 12th Session. |