USA Protection of Its Lamb Industry

*EPF403 07/08/99
TEXT:
U.S. RESTRICTS IMPORTS OF AUSTRALIA, NEW ZEALAND LAMB
(New schedule of tariffs, quotas applicable for three years) (1520)

Washington -- The White House announced July 7 that it is imposing penalty tariffs and quotas in order to protect the U.S. lamb meat industry from the threat posed by increased imports from countries such as New Zealand and Australia. 

The White House has set a three-year schedule of new tariffs and quotas to go into effect starting July 22, 1999: for the first year, the first 31,851,151 kilograms (kg) of lamb will be subjected to a 9 percent tariff; for the second year, the quota will be raised to 32,708,493 kg of lamb and the tariff reduced to 6 percent; for the third year, the quota will be raised to 33,565,835 kg of lamb and the tariff reduced to 3 percent. 

Above-quota imports will be subjected to tariffs of 40 percent in the first year, 32 percent in the second year, and 24 percent in the third year. 

Imports of lamb meat from New Zealand and Australia are the primary targets of the new schedule. The White House announcement specifically excludes lamb imports from Canada, Mexico, Israel, beneficiary countries under the Caribbean Basin Economic Recovery Act, beneficiary countries under the Andean Trade Preference Act, and other developing countries that have accounted for a minor share of lamb meat imports to the U.S. 

The President has taken this action under section 203 of the Trade Act of 1974. The Trade Act of 1974, enacted by the U.S. Congress in late 1974 and signed into law on January 3, 1975, granted the President broad authority to protect American industry and workers against unfair or injurious import competition; and to provide "adjustment assistance" to industries, workers and communities injured or threatened by increased imports. 

Criteria for import relief, found under sections 201-204 of the act, are based on those in article XIX of the General Agreement on Tariffs and Trade (GATT), as further defined in the World Trade Organization (WTO) Agreement on Safeguards. Article XIX of the GATT is sometimes referred to as the "escape clause" because it permits a country to "escape" temporarily from its obligations under the GATT (and WTO) with respect to a particular product when increased imports of that product are causing or are threatening to cause serious injury to domestic producers. Section 201 provides the legal framework under U.S. law for the President to invoke U.S. rights under article XIX. 

Sections 201-204 of the act do not require a finding of an unfair trade practice, as do U.S. antidumping and countervailing duty laws. However, the injury test under sections 201-204 is considered to be more difficult than those of the unfair trade statutes. Sections 201-204 require the U.S. International Trade Commission (USITC) to investigate whether an article is being imported into the United States in such increased quantities, absolute or relative to domestic production, as to be a substantial cause of serious injury, or threat thereof, to a domestic industry. The President has discretion to follow the USITC's recommendation on relief, which cannot exceed a total period of eight years, including extensions. Relief normally takes the form of temporary import restrictions (tariffs, quotas, or tariff-rate quotas) or trade adjustment assistance. During the relief period, USITC will continue to advise the President on the effects of reducing, modifying or terminating the relief actions. 

Following is the official text of the White House statement: 

(begin text) 

THE WHITE HOUSE 
Office of the Press Secretary 
(Rapid City, South Dakota) 

July 7, 1999 

MEMORANDUM FOR THE SECRETARY OF THE TREASURY THE SECRETARY OF AGRICULTURE THE UNITED STATES TRADE REPRESENTATIVE THE DIRECTOR OF THE OFFICE OF MANAGEMENT AND BUDGET THE DIRECTOR OF THE NATIONAL ECONOMIC COUNCIL 

SUBJECT: Action Under Section 203 of the Trade Act of 1974 Concerning Lamb Meat 

On April 5, 1999, the United States International Trade Commission (USITC) submitted a report to me that contained: (1) a determination pursuant to section 202 of the Trade Act of 1974, as amended (the "Trade Act"), that imports of lamb meat are being imported into the United States in such increased quantities as to be a substantial cause of threat of serious injury to the domestic lamb meat industry; and (2) negative findings made pursuant to section 311(a) of the North American Free Trade Agreement Implementation Act (the "NAFTA Implementation Act") with respect to imports of lamb meat from Canada and Mexico. 

After considering all relevant aspects of the investigation, including the factors set forth in section 203(a)(2) of the Trade Act, I have implemented actions of a type described in section 203(a)(3). I have determined that the most appropriate action is a tariff-rate quota on imports of lamb meat with an increase in currently scheduled rates of duties for imports within and above the tariff-rate quota level. I have proclaimed such action for a period of 3 years and 1 day in order to facilitate efforts by the domestic industry to make a positive adjustment to import competition. 

Specifically, I have established a tariff-rate quota for lamb meat in an amount equal to 31,851,151 kg. in the first year (July 22, 1999, through July 21, 2000), an amount that is equal to imports of lamb meat during calendar year 1998. The tariff-rate quota amount will increase by 857,342 kg. annually in the second and third years of relief. I have also established individual country allocations for product imported from Australia, New Zealand, and an "other country" category within the tariff-rate quota, which reflect the actual shares of each country in calendar year 1998. I have established increased rates of duty for imports within the tariff-rate quota amount: namely 9 percent ad valorem for imports in the first year of relief; 6 percent ad valorem for imports in the second year; and 3 percent ad valorem for imports in the third year. I have established increased rates of duty for imports above the tariff-rate quota levels: namely, 40 percent ad valorem in the first year of relief, 32 percent ad valorem in the second year, and 24 percent ad valorem in the third year. 

I have also determined that implementation of adjustment assistance measures based on authorized programs of the Department of Agriculture will facilitate efforts by the domestic lamb meat industry to make a positive adjustment to import competition. In this regard, I instruct the United States Trade Representative (the USTR), the Secretary of Agriculture (the Secretary), the Director of the Office of Management and Budget, and the Director of the National Economic Council, in consultation with the U.S. industry, to transmit to me a set of substantial adjustment assistance measures that would improve the competitiveness of the U.S. industry and facilitate efforts by the industry to adjust to import competition. 

I further determine, pursuant to section 312(a) of the NAFTA Implementation Act, that imports of lamb meat produced in Canada and Mexico do not account for a substantial share of total imports of lamb meat and are not contributing importantly to the threat of serious injury. Therefore, pursuant to section 312(b) of the NAFTA Implementation Act, the safeguard measure will not apply to imports of lamb meat, whether fresh/chilled or frozen, that are the product of Canada or Mexico. Similarly, the safeguard measure will not apply to imports of lamb meat that are the product of Israel, beneficiary countries under the Caribbean Basin Economic Recovery Act or the Andean Trade Preference Act, or other developing countries that have accounted for a minor share of lamb meat imports. 

I have determined that the actions described above will facilitate efforts by the domestic industry to make a positive adjustment to import competition and provide greater economic and social benefits than costs. These actions will provide the domestic industry with necessary temporary relief from increasing import competition as well as assistance from existing U.S. Government programs, while also assuring our trading partners continued access to the United States market. The over-quota tariff rates I have established will provide substantial certainty to the domestic lamb industry regarding import levels. 

Pursuant to section 204 of the Trade Act, the USITC will monitor developments with respect to the domestic industry, including the progress and specific efforts made by workers and firms to make a positive adjustment to import competition. The USITC will provide to me and to the Congress a report on the results of its monitoring no later than the date that is the mid-point of the period during which the action I have taken under section 203 of the Trade Act is in effect. In this regard, I instruct the USTR, in consultation with the Secretary, and the Director of the Office of Management and Budget to transmit to the USITC no later than 30 days from today a list of benchmarks that the USTR recommends that the USITC use in connection with its monitoring and in preparing its report. These benchmarks are to be focused on industry efforts to adjust to import competition and on price trends for domestic and imported lamb meat. 

The United States Trade Representative is authorized and directed to publish this memorandum in the Federal Register. 

WILLIAM J. CLINTON 

(end text)

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