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Chapter 1

United States Trade Agreements

Legislation

During the period covered by this report,' the United States conducted its trade agreements program under the Trade Agreements Act of 1934, as amended, the Trade Agreements Extension Act of 1951, as amended, and the Trade Agreements Extension Act of 1955.*

House bill 6630, which proposed to authorize the President to accept membership for the United States in the proposed Organization for Trade Cooperation, was introduced in the House of Representatives on April 4, 1957, and was referred to the Committee on Ways and Means. By June 30, 1957, the end of the period covered by this report, the committee had not reported on the proposed legislation.

PRINCIPAL PROVISIONS OF THE TRADE AGREEMENTS EXTENSION ACT OF 1955

The Trade Agreements Extension Act of 1955 (sec. 2) extends from June 12, 1955, until the close of June 30, 1958, the period during which the President is authorized to enter into trade agreements with foreign countries. In extending the President's authority, the Congress reiterated the caveat it included in every previous extension act since 1951 that enactment of the act "shall not be construed to determine or indicate

1 The first report in this series was U. S. Tariff Commission, Operation of the Trade Agreements Program, June 1934 to April 1948, Rept. No. 160, 2d ser., 1949. Hereafter that report will be cited as Operation of the Trade Agreements Program (first report). The second, third, and succeeding reports of the Tariff Commission on the operation of the trade agreements program will hereafter be cited in a similar short form. Copies of the Commission's earlier reports on the operation of the trade agreements program may be purchased from the Superintendent of Documents, United States Government Printing Office, Washington 25, D. C.

248 Stat. 943.

* 65 Stat. 72.

69 Stat. 162.

For the provisions and legislative history of the Trade Agreements Act of 1934 and the subsequent extension acts, see Operation of the Trade Agreements Program: First report, pt. II, ch. 2; second report, ch. 2; third report, ch. 2; fourth report, ch. 2; sixth report, ch. 2; seventh report, ch. 2; and eighth report, ch. 1.

the approval or disapproval by the Congress of the executive agreement known as the General Agreement on Tariffs and Trade" (sec. 3).

Section 3 of the extension act of 1955 amends section 350 of the Tariff Act of 1930 (sec. 1 of the Trade Agreements Act of 1934, as amended). As so amended, section 350 increases the President's authority to reduce United States import duties pursuant to trade-agreement negotiations by alternative methods. The first method permits reductions in import duties of not more than 15 percent of the rates existing on January 1, 1955. Under this provision, the amount of reduction that may become initially effective at one time may not exceed 5 percent of the rate that existed on January 1, 1955. No part of any such reduction after the first part may become initially effective until the immediately previous part has been in effect for not less than 1 year, and no part of any reduction may become initially effective after the expiration of the 3-year period which began on July 1, 1955. In effect, this method authorizes the President to reduce United States rates of duty by a maximum of 5 percent of the rates that existed on January 1, 1955, in each of 3 consecutive 12-month periods, the first such period beginning on July 1, 1955. The President's authority to make such reductions is not cumulative from period to period. Because the rates of duty that were reduced pursuant to the trade-agreement negotiations with Japan and other countries in 1955 became effective after the base date of January 1, 1955, rates of duty reduced by 15 percent or more in those negotiations may not be further reduced under the authority granted to the President by the first method. The second method permits the reduction of import duties that are higher than 50 percent ad valorem (or the equivalent thereof) to a rate of 50 percent ad valorem (or the equivalent thereof). Under this provision also, not more than one-third of the reduction in rates of duty may become initially effective at one time, and no part of any reduction after the first part may become initially effective until the immediately previous part has been in effect for not less than 1 year. In contrast to the first method, however, section 3 of the act does not prohibit reductions in rates of duty under the second method from becoming effective after the expiration of the 3-year period beginning July 1, 1955. The President may, therefore, reduce rates of duty under the second method after June 30, 1958, if such reduction is required to carry out a trade-agreement commitment entered into on or before that date.

Section 3 of the Trade Agreements Extension Act of 1955 also amends section 350 of the Tariff Act of 1930 to provide that the President maywithin carefully specified limits-exceed the duty-reduction limitations

'The Trade Agreements Act of 1934 originally authorized the President to reduce import duties, pursuant to trade-agreement negotiations, by not more than 50 percent of the "existing" rates. The Trade Agreements Extension Act of 1945 authorized the President to reduce import duties by not more than 50 percent of the rates in effect on January 1, 1945.

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