Memorandum on the Restriction of Pasta Imports From the European Economic Community

September 30, 1987

Memorandum for the United States Trade Representative

Subject: Determination under Section 301 of the Trade Act of 1974

Pursuant to section 301 of the Trade Act of 1974, as amended (19 U.S.C. 2411), I have determined to take actions necessary to implement an agreement signed on September 15, 1987, with the European Community (EC) with respect to exports of certain pasta products to the United States. In accordance with the agreement, the U.S. Customs Service shall exclude from entry, or withdrawal from warehouse for consumption, into the customs territory of the United States all shipments the product of any member country of the EC, exported on or after October 1, 1987, of macaroni, noodles, vermicelli, and similar alimentary pastes composed primarily of wheat, provided for in items 182.35 and 182.36 part 15B, schedule 1 of the Tariff Schedules of the United States (TSUS) (19 U.S.C. 1202), unless such shipments are accompanied by appropriate documentation establishing that such imports are receiving reduced refund payments from the EC or are benefitting solely from Inward Processing Relief from the EC. The United States Trade Representative (USTR) shall determine what actions are necessary to enforce the agreement and shall notify the U.S. Customs Service of the documentary evidence necessary to permit entry of such pasta articles. The U.S. Customs Service will collect and assemble such data as are necessary to monitor the agreement. I have determined to take this action on my own motion on an expedited basis under the authority of section 301(d)(1) of the Trade Act of 1974 (19 U.S.C. 2411(d)(1)).

Statement of Reasons

The agreement implemented by this determination resolves a long-standing dispute over certain EC subsidy practices I previously determined to be unfair (47 FR 31841). On November 30, 1981, the USTR initiated an investigation of export subsidies on certain pasta products from the EC (46 FR 59675), on the basis of a petition filed by the National Pasta Association under section 301 of the Trade Act of 1974. The United States pursued this matter under the dispute resolution procedures of the Subsidies Code. In 1983, a Subsidies Code panel found, after lengthy and careful examination of the arguments of both sides, that EC export subsidies on pasta products are inconsistent with Article 9 of the Subsidies Code. The EC and certain other countries declined to permit adoption of the panel ruling. Subsequent efforts to achieve a settlement through bilateral negotiations were unsuccessful.

In the context of a separate dispute with the EC concerning tariff preferences granted by the EC on certain citrus products, I imposed increased duties on certain pasta products under Proclamation 5354 of June 21, 1985 (50 FR 26153), as modified by Proclamation 5363 of August 15, 1985 (50 FR 33711). These increased duties on pasta products were withdrawn, effective August 21, 1986, by action of the USTR under authority delegated by Proclamation 5363, as a result of the negotiation of a satisfactory settlement of the dispute concerning citrus preferences (51 FR 30146). One of the terms of that settlement with the EC was that the United States and the EC would negotiate a satisfactory settlement of the dispute over EC pasta subsidies.

The agreement implemented by this determination and accompanying Proclamation is the result of those negotiations. The agreement reasonably restricts the EC subsidies on pasta exported to the United States, and therefore is an appropriate and feasible response to enforce the rights of the United States under the trade agreements of the United States or to respond to EC acts, policies, and practices that are unjustifiable, unreasonable, or discriminatory and burden or restrict U.S. commerce.

This determination shall be published in the Federal Register.

Ronald Reagan

[Filed with the Office of the Federal Register, 8:51 a.m., October 1, 1987]

Note: The memorandum was printed in the ``Federal Register'' of October 2.