Executive Order 12661 -- Implementing the Omnibus Trade and Competitiveness Act of 1988 and Related International Trade Matters

 

December 27, 1988

 

By virtue of the authority vested in me as President by the Constitution and laws of the United States of America, including the Omnibus Trade and Competitiveness Act of 1988 (P.L. 100 - 418, 102 Stat. 1107) (``Omnibus Trade Act''), the Tariff Act of 1930 (Chapter 497, 46 Stat. 590, June 17, 1930), as amended (``Tariff Act''), the National Defense Authorization Act, Fiscal Year 1989 (P.L. 100 - 456, 102 Stat. 1918) (``Defense Authorization Act''), section 301 of Title 3 of the United States Code, and, in general, to ensure that the international trade policy of the United States shall be conducted and administered in a way that achieves the economic, foreign policy, and national security objectives of the United States and in a coordinated manner under the direction of the President, it is hereby ordered as follows:

 

Part I -- Trade, Customs, and Tariff Laws

 

Section 1 - 101. Accession of State Trading Regimes to the General Agreement on Tariffs and Trade. The functions vested in the President by sections 1106(a), (b) and (d) of the Omnibus Trade Act, regarding the accession of state trading regimes to the General Agreement on Tariffs and Trade, are delegated to the United States Trade Representative.

 

Sec. 1 - 201. Wine Barriers. The functions vested in the President by section 1125 of the Omnibus Trade Act, regarding the updated report on barriers to wine trade, are delegated to the United States Trade Representative.

 

Sec. 1 - 301. Steel Imports. The functions vested in the President by section 805(d)(1) and (2) of the Trade and Tariff Act of 1984 (19 U.S.C. 2253, note), as amended by section 1322 of the Omnibus Trade Act, are delegated to the United States Trade Representative.

 

Sec. 1 - 401. Telecommunications Trade. The functions vested in the President by sections 1375 and 1376(e) of the Omnibus Trade Act, regarding certain telecommunications negotiations as may be ordered by the President and reports thereon to Congressional Committees, are delegated to the United States Trade Representative.

 

Sec. 1 - 501. Uniform Fee on Imports. The functions vested in the President by section 1428 of the Omnibus Trade Act, regarding negotiations to obtain authority under the General Agreement on Tariffs and Trade to impose a small uniform fee on imports, are delegated to the United States Trade Representative.

 

Part II -- Export Enhancement

 

Sec. 2 - 101. Countertrade and Barter.

 

(1) Establishment. There is established an Interagency Group on Countertrade, which shall be composed of the Secretaries of Commerce, State, Defense, Treasury, Labor, Agriculture, and Energy, the Attorney General, the Administrator of the Agency for International Development, the Director of the Federal Emergency Management Agency, the United States Trade Representative and the Director of the Office of Management and Budget, or their respective representatives. The Secretary of Commerce or his representative shall be the Chairman of the interagency group.

 

(2) Functions. The interagency group shall carry out the functions and duties set out in section 2205(a) of the Omnibus Trade Act.

 

Sec. 2 - 201. Sanctions Against Toshiba and Kongsberg.

 

(1) Procurement Sanctions. Pursuant to section 2443 of the Omnibus Trade Act and subject to the exceptions referred to in paragraph (3), departments, agencies and instrumentalities of the United States Government shall not for the three-year period beginning on the date this Order takes effect, contract with or procure products and services from Toshiba Machine Company, Kongsberg Trading Company, Toshiba Corporation or Kongsberg Vaapenfabrikk. The head of each department, agency or instrumentality is hereby directed and authorized to implement this procurement sanction in accordance with paragraph (3).

 

(2) Import Sanctions. Pursuant to section 2443 of the Omnibus Trade Act and subject to the exceptions referred to in paragraph (3), importation into the United States, its territories and possessions, of products produced by Toshiba Machine Company or Kongsberg Trading Company is prohibited for three years from the effective date of this Order. The Secretary of the Treasury is hereby directed and authorized to implement this import sanction in accordance with paragraph (3).

 

(3) Exceptions. Authority to make determinations as to exceptions to sanctions and to implement exceptions by regulation or otherwise is delegated (i) to the Secretary of Defense with respect to determinations under section 2443(c)(1) regarding the procurement of defense articles or defense services, (ii) to the Secretary of the Treasury with respect to exceptions under section 2443(c)(2) regarding importation prohibited by section 2443(a)(2), and (iii) to the head of each Federal department, agency or instrumentality with respect to exceptions under section 2443(c)(2) affecting their respective contracting and procurement. All regulations implementing these exceptions provisions shall be consistent with any guidelines provided by the Office of Federal Procurement Policy, Office of Management and Budget.

 

(4) Annual Report. The annual report required by section 2445, concerning estimated increases in defense expenditures arising from illegal technology transfers, shall be prepared by the Secretary of Defense, in consultation with the Secretaries of State and Commerce, for submission to the Congress by the President.

 

Part III -- Foreign Corrupt Practices Amendments; Investment; and Technology

 

Sec. 3 - 101. Foreign Corrupt Practices Act Amendments. The functions conferred upon the President by section 5003(d)(1) (``International Agreement'') of the Omnibus Trade Act are delegated to the Secretary of State, who in performing such functions shall act in consultation with the Attorney General, the United States Trade Representative, the Chairman of the Securities and Exchange Commission, the Secretary of Commerce, the Secretary of the Treasury and the Director of the Office of Management and Budget.

 

Sec. 3 - 201. Authority to Review Certain Mergers, Acquisitions, and Takeovers.

 

(1) Executive Order No. 11858, as amended, regarding the Committee on Foreign Investment in the United States (the ``Committee'') is further amended as follows:

 

(A) By adding new Sections 7 and 8 as follows:

 

``Sec. 7. (1) Investigations. (a) The Committee is designated to receive notices and other information, to determine whether investigations should be undertaken, and to make investigations, pursuant to Section 721(a) of the Defense Production Act. (b) If the Committee determines that an investigation should be undertaken, such investigation shall commence no later than 30 days after receipt by the Committee of written notification of the proposed or pending merger, acquisition, or takeover. Such investigation shall be completed no later than 45 days after such determination. (c) If one or more Committee members differ with a Committee decision not to undertake an investigation, the Chairman shall submit a report of the Committee to the President setting forth the differing views and presenting the issues for his decision within 25 days after receipt by the Committee of written notification of the proposed or pending merger, acquisition, or takeover. (d) A unanimous decision by the Committee not to undertake an investigation with regard to a notice shall conclude action under this section on such notice. The Chairman shall advise the President of said decision.

 

``(2) Report to the President. Upon completion or termination of any investigation, the Committee shall report to the President and present a recommendation. Any such report shall include information relevant to subparagraphs (1) and (2) of Section 721(d) of the Defense Production Act. If the Committee is unable to reach a unanimous recommendation, the Chairman shall submit a report of the Committee to the President setting forth the differing views and presenting the issues for his decision.

 

``Sec. 8. The Chairman of the Committee, in consultation with other members of the Committee, is hereby delegated the authority to issue regulations to implement Section 721 of the Defense Production Act.''

 

(B) By deleting, from the second sentence in Section 1(a), the text beginning with ``a representative'' and ending with ``by each of''.

 

(C) By deleting, from the third sentence in Section 1(a), the phrase ``representative of the''.

 

(D) By deleting ``and'' at the end of subparagraph (3) of Section 1(b), by substituting ``; and'' for the period at the end of subparagraph (4) of that Section, and by adding a new subparagraph (5) as follows: ``(5) coordinate the views of the Executive Branch and discharge the responsibilities with respect to Section 721(a) and (e) of the Defense Production Act of 1950, as amended (50 U.S.C. App. 2061 et seq.) (``Defense Production Act'').''

 

(E) By adding the following sentence at the end of Section 5: ``Information or documentary material filed pursuant to Section 1(b)(5) or Section 7 of this Order shall be treated in accordance with paragraph (b) of Section 721 of the Defense Production Act.''

 

(F) By inserting in Section 1(a) the following additional Committee members: ``(7) The Attorney General.'' and ``(8) The Director of the Office of Management and Budget.''

 

(G) The Interim Presidential Directive to the Secretary of the Treasury of October 26, 1988, is hereby revoked, and any notices received or investigations pending as of the date this Order takes effect shall be referred to the Chairman of the Committee for action consistent with this Order.

 

Sec. 3 - 301. Reporting Requirement on Semiconductors, Fiber Optics and Superconducting Materials.

 

(1) The Secretary of Commerce, in consultation with the Director of the Office of Science and Technology Policy, the Secretary of Defense, and the Director of the Office of Management and Budget, shall prepare for the President to submit to the Congress with the Fiscal Year 1990 budget a report describing policies and budget proposals regarding:

 

(A) Federal research in semiconductors and semiconductor manufacturing technology, including a discussion of the respective roles of the various Federal departments and agencies in such research;

 

(B) Federal research and acquisition policies for fiber optics and optical-electronic technologies generally;

 

(C) Superconducting materials, including descriptions of research priorities, the scientific and technical barriers to commercialization which such research is designed to overcome, steps taken to ensure coordination among Federal agencies conducting research on superconducting materials, and steps taken to consult with private United States industry to ensure that no unnecessary duplication of research exists and that all important scientific and technical barriers to the commercialization of superconducting materials will be addressed; and

 

(D) Federal research to assist United States industry to develop and apply advanced manufacturing technologies for the production of durable and nondurable goods.

 

(2) The Department of Defense, the Department of Energy, the National Science Foundation, the National Aeronautics and Space Administration, the Department of State, the United States Trade Representative, and other Federal agencies deemed appropriate by the Secretary of Commerce shall provide the information described in section 5141 of the Omnibus Trade Act concerning their Fiscal Year 1989 program and proposed Fiscal Year 1990 program to the Secretary of Commerce in sufficient time to permit preparation of the report.

 

(3) The Office of Management and Budget shall provide to the Secretary of Commerce, in sufficient time to permit preparation of the report, a summary of the Federal base program and Fiscal Year 1990 budget initiatives in each of the technical areas of the report.

 

(4) The Office of Science and Technology Policy (``OSTP'') shall provide the Secretary of Commerce with appropriate policy guidance in the technical areas of the report, including a summary of the criteria used to select research projects within an agency and among agencies, and the results of any studies conducted by OSTP, or by others if OSTP deems them to be relevant, which analyze the influence of the Federal research programs in the technical areas of the report.

 

Sec. 3 - 401. A National Commission on Superconductivity.

 

(1) Establishment. There is established a National Commission on Superconductivity (``Commission''). The Commission shall consider major policy issues regarding United States applications of recent research advances in superconductors including research and development priorities, the development of which will assure United States leadership in the development and application of superconducting technologies.

 

(2) Membership. The membership of the Commission shall be not more than 24 individuals appointed by the President and include representatives of:

 

(A) The National Critical Materials Council, the National Academy of Sciences, the National Academy of Engineering, the National Science Foundation, the National Aeronautics and Space Administration, the Department of Energy, the Department of Justice, the Department of Commerce (including the National Institute of Standards and Technology), the Department of Transportation, the Department of the Treasury, the Department of Defense, and the Office of Management and Budget;

 

(B) Organizations whose membership is comprised of physicists, engineers, chemical scientists, or material scientists; and

 

(C) Industries, universities, and national laboratories engaged in superconductivity research.

 

(3) Chairman. A representative of the private sector shall be designated by the President as Chairman of the Commission.

 

(4) Coordination. The National Critical Materials Council shall be the coordinating body of the Commission and shall provide staff support for the Commission.

 

(5) Report. By February 23, 1989, the Commission shall submit a report to the President and the Congress with recommendations regarding methods of enhancing the research, development, and implementation of improved superconductor technologies in all major applications.

 

(6) Scope of Review. In preparing the report required by subsection (5), the Commission shall consider addressing, but need not limit its review to:

 

(A) The state of the United States competitiveness in the development of improved superconductors;

 

(B) Methods to improve and coordinate the collection and dissemination of research data relating to superconductivity;

 

(C) Methods to improve and coordinate funding of research and development of improved superconductors;

 

(D) Methods to improve and coordinate the development of viable commercial and military applications of improved superconductors;

 

(E) Foreign government activities designed to promote research, development, and commercial application of improved superconductors;

 

(F) The need to provide increased Federal funding of research and development of improved superconductors;

 

(G) The impact on the United States national security if the United States must rely on foreign producers of superconductors;

 

(H) The benefit, if any, of granting private companies partial exemptions from United States antitrust laws to allow them to coordinate research, development, and products containing improved superconductors;

 

(I) Options for providing income tax incentives for encouraging research, development, and production in the United States of products containing improved superconductors; and

 

(J) Methods to strengthen domestic patent and trademark laws to ensure that qualified superconductivity discoveries receive the fullest protection from infringement.

 

(7) Termination. The Commission shall disband within a year of the date of this Order. Thereafter the National Critical Materials Council may review and update the report required by subsection (5) and make further recommendations as it deems appropriate.

 

Part IV -- Education and Training for American Competitiveness

 

Sec. 4 - 101. Buy American Act of 1988.

 

(1) The functions vested in the President by section 7002 of the Omnibus Trade Act, regarding section 4(d) of Title III of the Buy American Act of 1933, as amended (41 U.S.C. 10a - 10d), are delegated to the Secretary of Defense.

 

(2) The functions vested in the President by section 7003 of the Omnibus Trade Act, regarding the annual report required by subsection (d) of section 305 of the Trade Agreements Act of 1979, as amended (19 U.S.C. 2515), are delegated to the United States Trade Representative.

 

Part V -- Miscellaneous

 

Sec. 5 - 101. Executive Oversight. Any actions or determinations taken or made by an officer or agency under the Omnibus Trade Act or this Order shall be subject to the Executive oversight and direction of the President, and such actions or determinations shall be undertaken after appropriate inter-agency consultation as established by the President.

 

Sec. 5 - 102. Regulatory Review. Notwithstanding the provisions of section 1(a)(2) of Executive Order No. 12291 of February 17, 1981, the Director of the Office of Management and Budget shall, with regard to regulations, rules, or agency statements of general applicability and future effect designed to implement, interpret, or prescribe law or policy or describing the procedure or practice requirements of an agency relative to the administration of the Export Administration Act, determine whether such regulations, rules, or agency statements are exempted from review under that Order, pursuant to the provisions of section 8(b) thereof.

 

Sec. 5 - 201. Offsets. The negotiating functions under section 825(c) of the Defense Authorization Act, as may be ordered by the President, are hereby jointly delegated to the Secretary of Defense and the United States Trade Representative. These functions shall be coordinated with the Secretary of State and conducted in consultation with the Secretaries of Commerce, Labor and the Treasury.

 

Sec. 5 - 202. Reporting Functions. The reporting functions of the President under section 825(d) of the Defense Authorization Act are delegated to the Director of the Office of Management and Budget. The Director may further delegate to the heads of Executive departments and agencies responsibility for preparing particular sections of such reports. The heads of Executive departments and agencies shall, to the extent permitted by law, provide the Director with such information as may be necessary for the effective performance of these functions.

 

Sec. 5 - 301. International Trade Commission Report. The functions vested in the President by section 332(g) of the Tariff Act, regarding reports by the United States International Trade Commission to the President, are delegated to the United States Trade Representative.

 

Sec. 5 - 401. Strengthening International Institutions. To the extent possible, actions undertaken under this Order shall be conducted in a manner that strengthens international institutions that further United States objectives, such as opening foreign markets and preventing the export of strategic goods and technologies to proscribed destinations.

 

Sec. 5 - 501. Effective Date. This Order shall take effect at 12:01 a.m. on Wednesday, December 28, 1988.

 

Ronald Reagan

 

The White House,

 

December 27, 1988.

 

[Filed with the Office of the Federal Register, 10:33 a.m., January 6, 1989]

 

Note: The Executive order was released by the Office of the Press Secretary on December 28.