Charles A. Vanik to postpone indefinitely consideration of House Resolution 653, which would have disapproved the recommendation of President Carter to extend the authority for most-favored-nation treatment of imported items from Romania under the waiver provisions of title IV of the Trade Act of 1974. Continuation of the President's authority for such a waiver, which is permitted by the Trade Act of 1974 for any nonmarket economy country which, inter alia, "denies its citizens the right or opportunity to emigrate." section 402(a) (1), was required for the continuation of the Agreement between the United States and Romania on Trade Relations signed April 2, 1975 (TIAS 8159; 26 UST 2305; entered into force August 3. 1975). Representative Vanik's statement in support of his preferential motion outlined the respective responsibilities of the President and of the Congress concerning such a waiver and President Carter's intention to monitor Romania's compliance with the emigration objectives specified in the Trade Act of 1974:

[O]n July 18, 1977, the Subcommittee on Trade ordered that House Resolution 653 be reported unfavorably to the full Committee on Ways and Means. House Resolution 653 provides for congressional disapproval of the recommendation of the President to extend the waiver authority in section 402 (c) of the Trade Act of 1974 with respect to the Socialist Republic of Romania for an additional 12 months, until July 3, 1978.

As you know, the United States-Romanian trade agreement took effect in August 1975 following passage by both Houses of Congress of concurrent resolutions approving the extension of nondiscriminatory-MFN-treatment to imported products from Romania under the waiver provisions of title IV of the Trade Act of 1974. Section 402 of the act prohibits the granting of MFN treatment, Government credits or investment guarantees, or the negotiation of a commercial agreement with any Communist country if that country does not allow its citizens the freedom to emigrate. Section 402 also permits the President to waive this prohibition for a limited period of time-subject to renewal-if he determines that doing so will promote freedom of emigration.

The first renewal of the President's waiver authority took place by operation of law last fall. Since Congress did not act to negate the President's recommendation within the statutory time period, the authority automatically extended until July 3, 1977. The Subcommittee on Trade held a hearing on September 14, 1976, on the President's request for renewal of the waiver authority, but took no further action.

On June 3, 1977, President Carter recommended to the Congress a further extension for 1 year of the Trade Act authority to waive the freedom of emigration requirement and its extension to Romania. On June 22, House Resolution 653, disapproving extension of the waiver authority to Romania, was introduced. Under the spe

cial expedited procedures of section 152 (d) of the Trade Act, a motion to proceed to House consideration of the resolution is highly privileged and not debatable. The statutory 60-day period for House consideration of House Resolution 653 expires on September 1, 1977.

The Subcommittee on Trade held a public hearing on July 18, receiving testimony from the administration, Members of Congress, trade councils, the business community, and private citizens. The testimony was heavily in favor of continuation of MFN to Romania.

In reporting House Resolution 653 unfavorably by a voice vote, the Committee on Ways and Means gave full consideration to the moderately increasing trend of Romanian emigration to the United States and the declining emigration rate to Israel.

The committee concluded that the Government of Romania had made a sincere effort to live up to its human rights obligations and that extension of MFN treatment for another year is crucial to the continued development and improvement of U.S. economic and political relations with Romania. At the same time, the committee expects that the intention expressed by President Carter to monitor more closely Romania's compliance with the Trade Act emigration objectives will be implemented through a formalized monitoring system which includes periodic reporting to and consultation with Trade Subcommittee members and staff. The committee also expects the President to bring to the attention of the Romanian Government any actions or emigration trends which do not appear to conform to the assurances they have provided in the past to treat emigration matters in a humanitarian manner.

*

123 Cong. Rec. H 8470-H 8471 (daily ed. Aug. 3, 1977).

Representative William A. Steiger also spoke in opposition to House Resolution 653 but voiced his concern for improvement in Romania's emigration policies:

The Trade Subcommittee, in its oversight responsibility, has carefully monitored the emigration situation in Romania since that country was granted MFN status in August of 1975. Investigations have shown that, on the whole, Romania is meeting its humanitarian responsibilities and is allowing an increasing number of its citizens. to move out of the country.

I want to point out to my colleagues, however, that there also is need for improvement. Statistics show that emigration from Romania rises significantly during the time period surrounding consideration by the Congress of waiver extensions. The President should make clear to the Romanians that these cyclical trends are not acceptable, and this Government should continually press for a more consistent commitment to human rights.

Portions of President Carter's recommendation for extension of waiver authority, which is dated June 2, 1977, follow:

RECOMMENDATION FOR EXTENSION OF WAIVER AUTHORITY

Pursuant to section 402(d) (5) of the Trade Act of 1974, (hereinafter referred to as "the Act") I have today determined that further extension of the waiver authority granted by section 402(c) of the Act, and continuation of the waiver extended by Executive Order 11854 of April 24, 1975, currently applicable to the Socialist Republic of Romania pursuant to section 402 (c) (1) of the Act, will substantially promote the objectives of section 402 of the Act. Further extension of the waiver authority conferred by section 402 (c) of the Act will enable us to continue to expand and improve bilateral relations with countries subject to subsection 402(b) of the Act, which I believe to be in the national interest. In the case of Romania, the extension would permit continuation of the U.S.-Romanian Trade Agreement of 1975.

I am convinced that continuation of the U.S.-Romanian Trade Agreement will serve to further promote mutually beneficial growth in two-way trade between the United States and Romania and will buttress the favorable political relations between our countries.

The reasons for retaining good commercial and political relations with Romania remain as valid as in the past. Such relations have contributed to a continuation and strengthening of Romania's independent policies, many of which have proven beneficial to U.S. foreign policy interests. Romania has continued to pursue friendly relations with countries of differing political and economic systems with the United States, the People's Republic of China, the developing world, and with Israel as well as Arab countries. Romania's participation in international organizations, including the IMF and World Bank, shows a high degree of independence in economic matters that parallels its relative political independence. More than half of Romania's trade is with noncommunist countries, and it is taking part in the Multilateral Trade Negotiations as a GATT Contracting Party.

I believe that a further expansion of U.S.-Romanian economic relations can help to promote a continuation of such independent policies and that the Trade Agreement, nondiscriminatory tariff treatment and authority to extend Commodity Credit Corporation and Export-Import Bank credits are essential to maintain and expand our present overall bilateral relationship with Romania.

Such an expanded bilateral relationship will also improve the prospects for continued American access to Romanian leaders and will enhance our ability to discuss frankly and, judging from past contacts, fruitfully, such important and sensitive subjects as emigration, divided families and marriage cases. Emigration from Romania to the U.S. has kept up this past year at about the same pace as during the preceeding year on which the previous favorable Presidential recommendation was based. Romanian performance with regard to emigration to Israel has been somewhat inconsistent and uneven, but overall emigration has risen markedly since implementation of the U.S.-Romanian Trade Agreement. Extending the waiver authority for Romania should provide an incentive to bring about a more consistent and forthcoming performance on emigration by Romania. For my Administration's part, we intend to monitor closely compliance with the objectives of section 402, and should performance not accord with the intent of this provision, I would want to reconsider my recommendation; moreover, we will bring to the attention of the Romanian Government any actions or emigration trends which do not seem to conform to the assurances which they have provided in the past to treat emigration matters in a humanitarian manner.

Taking account of all factors, however, I recommend to the Congress, pursuant to subsection 402(d) (5) of the Act, that the waiver authority granted by subsection (c) of section 402 of the Act be further extended for a period of twelve months.

13 Weekly Comp. of Pres. Doc. 842-843 (June 6, 1977).

President Carter's determination of June 2, 1977, under sec. 402(d) (1) of the Trade Act of 1974 concerning Romania appears at 13 Weekly Comp. of Pres. Doc. 843 (June 6. 1977).

For further information concerning the U.S.-Romanian Trade Agreement of 1975, see the 1975 Digest, Ch. 11, § 2, pp. 545–547.

U.S.-Mexico

On December 2, 1977, Ambassador Robert S. Strauss, U.S. Special Representative for Trade Negotiations, and Fernando Solana, Mexican Minister of Commerce, together with Hugo Margain, Mexican Ambassador to the United States, signed the first bilateral trade agreement between the United States and Mexico since 1942. It was also the first agreement to be negotiated between an industrialized nation and a developing country under the aegis of the "Tokyo Round" of Multilateral Trade Negotiations (MTN) underway in Geneva, Switzerland. This round, mandated by the "Tokyo Declaration," which was agreed to by ministers of 105 countries, including the European Community, in September of 1973, calls for participating developed nations to reach agreements covering exports of special interest and value to developing countries. These so-called "Tropical Product" negotiations have been in progress in Geneva since February 1975, shortly after U.S. participation in the Tokyo Round was authorized under the U.S. Trade Act of 1974.

Although the new U.S.-Mexican Agreement on Trade Matters, with schedules and related letters was developed from requests and offers in the "Tropical Product" area of the MTN, its final form encompassed a broader spectrum of trade. The Agreement provides for tariff concessions in the form of import duty reductions on Mexican exports to the United States of products valued at approximately $63 million. The Mexican exports include fruits and vegetables, other agricultural products and handicrafts. The Agreement further provides, in return, for trade concessions on $36 million worth of U.S. exports to Mexico composed primarily of agricultural products and certain tools and motors. The Mexican concessions consist of liberalized import licenses and tariff "bindings," which are tariff levels which may not be raised without compensatory reductions in other trade barriers.

The U.S. and Mexican concessions granted under the Agreement are to be extended automatically to all other nations whose exports receive reciprocal "most-favored-nation" equal trade treatment by the United States and Mexico. Although Mexico is not a signatory of the General Agreement on Tariffs and Trade (GATT), with annexes and schedules, and protocol of provisional application concluded on October 30, 1947 (TIAS 1700; 61 Stat. (5) (6); 4 Bevans 639; 55-61 UNTS; entered into force for the United States on January 1, 1948), the Agreement preserves U.S. rights under the GATT.

The Agreement is expected to take effect prior to March 1, 1978, after approval by the Government of Mexico and the issuance of a U.S. Presidential Proclamation under the Trade Act.

Office of the Special Representative for Trade Negotiations Press Release No. 258 (Dec. 2, 1977).

For further information concerning the Tokyo Declaration, see the 1973 Digest, Ch. 10, § 2, pp. 364–367.

For further information concerning the Trade Act of 1974, see the 1974 Digest, Ch. 10, § 2, pp. 442-460; the 1975 Digest, Ch. 10, § 2, pp. 507-514; and the 1976 Digest, Ch. 10, § 2, pp. 487-488.

Commodities Agreements

Conference on International Economic Cooperation (CIEC)

On June 21, 1977, Richard N. Cooper, Under Secretary for Economic Affairs, Department of State, testified before the Congressional Joint Economic Committee concerning the results of the Conference on International Economic Cooperation (CIEC), concluded in Paris on June 3, 1977. Under Secretary Cooper described the work of the conference concerning commodity trade in raw materials as follows:

U.S. objectives in the Raw Materials Commission consisted essentially of insuring a pragmatic, objective airing of the various problems in commodity trade, as well as possible solutions to these problems. Group of 19 participation in the discussions consisted largely of laying out the full range of demands emanating from the Manila declaration of early 1976 and seeking to gain the greatest possible number of Group of 8 concessions in response to these demands.

The debates revealed some general areas of agreement, but even greater areas of disagreement, particularly on such traditional LDC objectives as "preservation of LDC purchasing power in real terms" and measures to harmonize the production of synthetics with that of natural products. On other issues, such as compensatory financing to cover shortfalls in LDC earnings from exports of primary products, a Group of 8 proposed study of the issue in the IMFIBRD Development Committee foundered over Group of 19 insistence on UNCTAD [United Nations Conference on Trade and Development] participation in the study.

In the wake of the decision of participants in the London economic summit that there should be a common fund and that CIEC should seek to give impetus to resumed negotiations on this issue in November, CIEC participants reached agreement in principle on the "establisment of a common fund with purposes, objectives and other constituent elements to be further negotiated in UNCTAD." As the language implies, the Group of 8 has not accepted the UNCTAD conception of a common fund. By the same token, the Group of 19 has not abandoned this conception.

Aside from the political decision on the common fund issue, the discussion of raw materials issues in CIEC-despite the lack of agreement on many issues-was probably salutary in that the industrialized countries were firm, for the most part, in rejecting those LDC proposals aimed at market intervention that are impractical and unrealistic. Although we may expect the LDC's to renew their