114. Memorandum From the President’s Special Assistant (Paarlberg) to President Eisenhower0
The Secretary of Agriculture recommends that you ask the Tariff Commission to undertake a Section 22 action with respect to imports of cotton textiles.
The situation is this:
The Commodity Credit Corporation is required by law to export cotton in such quantities as to obtain our “fair share” of the world market.
To get the cotton into the market takes, currently, a subsidy of eight cents a pound. (The domestic support price is thirty cents a pound.)
Foreign textile operators buy this cotton at eight cents a pound less than our own textile trade is required to pay. Foreign mills make this subsidized cotton into cloth and ship it into the United States. Here it competes with cotton textiles from our own mills, which paid the full support price.
The Secretary of Agriculture indicates that there is reason to believe that this situation interferes with the cotton programs which Section 22 is intended to protect. He therefore asks you to request the Tariff Commission to determine whether a fee should be assessed against incoming cotton textiles, equal to the subsidy rate. This would, in effect, equalize the raw material cost for United States and foreign textile mills.
The action recommended by the Secretary of Agriculture has in it much equity and logic. To avert Tariff Commission consideration of this problem would be interpreted as harsh and a failure to understand an industry problem.
The domestic textile people have strongly urged this action. In fact, they want to go much further and have proposed that the remedy to be considered be quotas instead of a fee. The Secretary, however, indicates that the limited protection of a fee is all that should be considered by the Tariff Commission.
There is some hazard in that the Japanese might use any action of ours as an excuse for abandoning their voluntary quotas. Such does not seem, however, to be a strong possibility.
The State Department interposes no objection to a Tariff Commission investigation, having been given assurance that they will have a chance to express their views before final action is taken by the President on whatever recommendation comes from the Commission. Other Departments favor the step.
[Page 242]The Tariff Commission finding would not, of course, be binding upon the President.
I recommend that you institute the Tariff Commission proceedings recommended by the Secretary of Agriculture. If you concur, your signature on the attached letter to the Chairman of the Tariff Commission will accomplish this purpose.1
- Source: Eisenhower Library, Areeda Papers, Cotton Textiles, Section 22. No classification marking. Drafted by Paarlberg.↩
- The White House announced on November 10 that the President had requested the investigation. For texts of the announcement and Eisenhower’s November 10 letter to the Chairman of the Tariff Commission, see Department of State Bulletin, November 30, 1959, pp. 803–804.↩
- Printed from a copy that bears this typed signature.↩