ad valorem parts of the compound rates of duty applicable to any of the fabrics provided for in items 1108 or 1109 (a), on any of such fabrics that are entered in any calendar year in excess of an aggregate quantity (by weight) of 5 percent of the average annual production of similar fabrics in the United States during the three immediately preceding calendar years. By a proclamation of September 28, 1956, the President invoked this so-called Geneva wool-fabric reservation, to permit the estab lishment--effective January 1, 1957--of a tariff quota on imports of certain woolen and worsted fabrics. Under the proclamation, it is necessary for the President to inform the Secretary of the Treasury of the size of the quota for each year. On May 24, 1957, the President informed the Secretary of the Treasury that for the calendar year 1957 the tariff quota on woolen and worsted fabrics dutiable under tariff paragraphs 1108 and 1109 (a) would be 14 million pounds. The President found the figure of 14 million pounds to be not less than 5 percent of the average annual domestic production of similar fabrics in the years 1954, 1955, and 1956, which average had been calculated (on a weight basis) to be 277 million pounds. For the last 3 months of 1956, the tariff quota was established at 3.5 million pounds, and for 1957, at 14 million pounds. Before the United States invoked the Geneva wool-fabric reservation, the rates of duty on the woolen and worsted fabrics covered by the reservation were 30 cents or 37-1/2 cents per pound, depending on the nature of the fabric, plus 20 or 25 percent ad valorem, depending on the nature of the fabric. After the United States invoked the reservation, the rates of duty on imports of the specified woolen and worsted fabrics remained the same for a quantity up to 14 million pounds. Imports in excess of 14 million pounds will be subject to an ad valorem duty of 45 percent; the specific parts of the compound duties are not changed. ACTIVITIES UNDER THE PERIL-POINT PROVISION 1/ Sections 3 and 4 of the Trade Agreements Extension Act of 1951 set forth the statutory requirements for so-called peril-point determinations with respect to proposed trade-agreement negotiations. The peril-point provisions of the 1951 act require the President, before entering into any trade-agreement negotiation, to transmit to the Tariff Commission a list of the commodities that are to be considered for concessions. The Commission is then required to conduct an investigation, including the holding of a public hearing, and to report its findings to the President on (1) the maximum decrease in duty, if any, that can be made on each listed commodity without causing or threatening serious injury to the domestic industry producing like or directly competitive products, or (2) the minimum increase in duty or additional import restrictions that may be necessary on any of the listed products in order to avoid serious injury or the threat of serious injury to such domestic industry. The President may not conclude a trade agreement until the Commission has made its report to him, or until after the lapse of 120 days from the date he transmits the list of products to the Commis sion. If the President concludes a trade agreement that provides for 165 Stat. 72. greater reductions in duty than the Commission specified in its report, or that fails to provide for the additional import restrictions specified, he must transmit to the Congress a copy of the trade agreement in question, identifying the articles concerned and stating his reasons for not carrying out the Commission's recommendations. Promptly thereafter, the Commission must deposit with the Senate Committee on Finance and the House Committee on Ways and Means a copy of the portions of its report to the President that deal with the articles with respect to which the President did not follow the Commission's recommendations. During the period covered by this report, the Tariff Commission completed two peril-point investigations under the provisions of section 3 of the Trade Agreements Extension Act of 1951. On October 8, 1956, the Interdepartmental Committee on Trade Agreements issued public notice that the United States intended to engage in limited tariff negotiations during 1957 with Cuba under the General Agreement on Tariffs and Trade. On the same day, the President transmitted to the Tariff Commission a list of the commodities that were to be The considered for concessions in the proposed negotiations. President's list involved 2 tariff paragraphs and covered 5 statistical (schedule A) 1/classifications. The Commission instituted the required peril-point investigation on October 8, 1956, and held its public hearing on November 14 and 15, 1956. The Commission submitted its report to the President on December 7, 1956. 1/ U. S. Department of Commerce, Schedule A. Statistical Classification of Commodities Imported Into the United States. On March 18, 1957, the Trade Agreements Committee issued public notice that the United States intended to engage in limited trade agreement negotiations during 1957 with the United Kingdom and Belgium under the General Agreement on Tariffs and Trade. 1/ On the same day the President transmitted to the Tariff Commission a list of the commodities that were to be considered for concessions in the proposed negotiations. The President's list involved 11 tariff paragraphs and covered 14 statistical (schedule A) classifications. The Commission instituted the required peril-point investigation on March 18, 1957. and held its public hearing on April 24, 1957. The Commission submitted its report to the President on May 2, 1957. ACTIVITIES UNDER THE ESCAPE CLAUSE OF Since 1943 all trade agreements that the United States has concluded have contained a safeguarding clause, commonly known as the standard escape clause. The clause provides, in essence, that either party to the agreement may withdraw or modify any concession made therein if, after a concession, imports of the particular commodity enter in such increased quantities, either actual or relative, as to cause or threaten serious injury to the domestic industry producing like or directly competitive articles. The Trade Agreements Extension Act of 1951 makes it mandatory for an escape clause to be included in all trade agreements that the United States concludes in the future, and, as soon as practicable, 1/ The negotiations were held in connection with requests by these countries for compensatory tariff concessions on the basis of the 1956 increase in the United States rate of duty on certain linen toweling. in all trade agreements currently in force. The clause must conform to the policy set forth in section 6 (a) of the act. That section provides that no trade-agreement concession made by the United States shall be permitted to continue in effect when the product involved is, as a result, in whole or in part, of the duty or other customs treatment reflecting such concession, being imported into the United States in such increased quantities, either actual or relative, as to cause or threaten serious injury to the domestic industry producing like or directly competitive products. During the period covered by this report, the procedure for administering the escape clause was prescribed by section 7 of the Trade Agreements Extension Act of 1951, as amended, and by Executive Order 10401 of October 14, 1952. Section 7 of the Trade Agreements Extension Act of 1951, as amended, provides that the Tariff Commission, upon the request of the President, upon resolution of either House of Congress, upon resolution of either the Senate Committee on Finance or the House Committee on Ways and Means, upon its own motion, or upon application by any interested party, must promptly conduct an escape-clause investigation. The Commission must complete its investigation and make a report thereon within 9 months of the date it receives the application. As a part of each investigation, the Commission generally holds a public hearing at which interested parties are afforded an opportunity to be heard. Section 7 (a) of the Trade Agreements Extension Act of 1951. as amended, requires the Commission to hold such a hearing whenever it finds evidence of serious injury or threat of serious injury, or |