Continued Application of Schedules. Under these procedures, a contracting party that proposes to modify a concession negotiates with the country of initial negotiation (and any other interested countries) regarding compensation. In these negotiations the country that proposes the modification may grant new concessions to the interested countries, or the interested countries may withdraw or adjust upward concessions of a value substantially equal to the one modified.

On February 4, 1957, the Committee for Reciprocity Information issued notice that it intended to hold a public hearing on United States participation in the proposed tariff renegotiations with Canada, In its notice the CRI invited interested persons to submit their views with respect to the anticipated effect on United States trade of the modification of the Canadian concession on potatoes, or with respect to products on which the United States might request new or further tariff concessions from Canada as compensation. It also invited views with respect to the possible upward modification, or withdrawal, of tariff concessions in the United States schedule of the General Agreement, including the concessions that the United States granted to Canada on potatoes in that agreement. Because no reductions in United States rates of duty were involved in the renegotiations, the Tariff Commission did not conduct a peril-point investigation. The CRI held its public hearing on March 6, 1957.

As a result of the renegotiations, which took place in Washington during March and April 1957, Canada modified its General Agreement concession on potatoes to provide for a year-round duty of 37-1/2 cents per 100 pounds on all imported potatoes except new potatoes,

which will continue to be accorded duty-free entry during the period January 1 to June 14, inclusive. The modified concession replaced one that provided for duty-free entry of all potatoes except those imported during the period June 15 to July 31, inclusive, when the rate of duty was 37-1/2 cents per 100 pounds.

In the renegotiations, the United States modified its General Agreement concession on potatoes by reducing the tariff quota on seed potatoes from 2.5 million bushels to 1.9 million bushels, and by reducing the tariff quota on table-stock potatoes from 1 million bushels to 600,000 bushels. Under the modified concession, the mostfavored-nation rate of duty remains at 37-1/2 cents per 100 pounds for imports of seed potatoes within the new tariff quota of 1.9 million bushels, and for imports of table-stock potatoes within the new tariff quota of 600,000 bushels. The United States did not change the "escalator" clause in its original concession, which provides that in any year the tariff quota on table-stock potatoes will be increased by the amount that estimated United States production of such potatoes is less than 350 million bushels.

ACTIONS RELATING TO TRADE-AGREEMENT CONCESSIONS

Entry Into Force of Trade-Agreement Concessions

On June 29, 1957, the United States placed in effect the first stage of the tariff concessions on 5 types of cigar tobacco that it granted to Cuba in the limited trade-agreement negotiations conducted with that country under the General Agreement on Tariffs and Trade during the first half of 1957.

1/

For a discussion of the concessions that the United States granted in these negotiations, see the section of this chapter on trade-agreement negotiations with Cuba.

On June 29, 1957, the United States placed in effect the first stage of the tariff concessions that it granted to the United Kingdom and Belgium in the limited trade-agreement negotiations with those countries under the General Agreement during the first half of 1957. The concessions, which were to compensate the United Kingdom and Belgium for the increase in 1956 by the United States of its rate of duty on certain linen toweling, were on certain textile machinery, tracing cloth, certain waterproof cloth, certain cotton rugs, certain 1/ artists' canvas, and books by American authors.

2

On June 30, 1957, the United States placed in effect the second stage of the tariff concessions that it granted in the 1956 multilateral tariff negotiations under the General Agreement at Geneva. The United States granted these concessions in negotiations with the following 21 contracting parties to the General Agreement: Australia, Austria, Belgium, Canada, Chile, Cuba, Denmark, the Dominican Republic, Finland, France, the Federal Republic of Germany, Haiti, Italy, Japan, Luxembourg, the Netherlands, Norway, Peru, Sweden, Turkey, and the United Kingdom.

On June 30, 1957, the end of the period covered by this report. 1 country with which the United States concluded negotiations for tariff concessions under the General Agreement at Torquay--Korea-had not yet signed the Torquay Protocol. The United States, therefore, had not placed in effect the concessions that it initially negotiated with that country.

1/ For a discussion of the concessions that the United States granted

in these negotiations, see the section of this chapter on trade-agreement negotiations with the United Kingdom and Belgium.

2 For a discussion of the concessions that the United States granted

in these negotiations, see Operation of the Trade Agreements Program (ninth report), ch. 3.

Withdrawal or Modification of Trade-Agreement Concessions

Potatoes

On May 16, 1957, the President issued a proclamation modifying

the concession that the United States had granted on potatoes under the General Agreement in 1947. The modification, which was to become effective on September 15, 1957, consisted of reductions in the quantities of potatoes dutiable at 37-1/2 cents per 100 pounds under the tariff quotas on seed and table-stock potatoes set forth in the United States schedule to the General Agreement. The United States modified its concession as a result of Canada's renegotiation of its trade-agreement concession on potatoes, under the procedures provided for in the March 10, 1955, Declaration on the Continued Application

of Schedules. 1/

The United States proclamation giving effect to the reductions in the tariff quotas on potatoes made two supplementary adjustments in the rates of duty on certain potatoes. To prevent an increase in the margin of preference accorded Cuban table-stock potatoes beyond that permitted by paragraph 4 of article I of the General Agreement, the proclamation established an appropriate rate for non-Cuban tablestock potatoes withdrawn from the previous tariff quota and imported during December, January, or February. The proclamation also established a preferential rate for table-stock potatoes withdrawn from the previous quota, if they are the product of Cuba and are imported from March through November. This preference is provided for in the exclusive bilateral agreement that the United States negotiated with Cuba at Geneva in 1947.

For details of the modification of the United States concession on potatoes, see the section of this chapter on trade-agreement negotiations with Canada.

Butter Substitutes

On April 15, 1957, the President issued a proclamation limiting to 1,800,000 pounds the aggregate quantity of butter substitutes, including butter oil, containing 45 percent or more of butterfat, that may be imported during the calendar year 1957, and limiting to 1,200,000 pounds the aggregate quantity of such products that may be imported during each subsequent calendar year. The President took this action after a report and recommendation to him by the Tariff Commission, which conducted an investigation of the specified butter substitutes under the provisions of section 22 of the Agricultural Adjustment Act, as amended.

The United States granted a concession on butter oil in the General Agreement on Tariffs and Trade in 1947. United States action in establishing a quota on such products, which constituted a modification of the trade-agreement concession, was in accordance with the provisions of a waiver that the Contracting Parties granted to the United States during their Ninth Session in 1954-55. At that session the Contracting Parties waived the commitments of the United States under the General Agreement, insofar as such commitments may be regarded as inconsistent with the action that the United States is required to take under the provisions of section 22 of its Agricultural Adjustment Act, as amended.

Invocation of Geneva Wool-Fabric Reservation

In a note attached to item 1108 of part I of the United States schedule of concessions in the General Agreement on Tariffs and Trade, the United States reserved the right to increase to 45 percent the