Foreign Relations of the United States, 1958–1960, Foreign Economic Policy, Volume IV

98. Circular Telegram From the Department of State to Certain Diplomatic Missions⁰

April 20, 1959, 9:47 p.m.

1206. White House announcing April 21 that President has determined application for 1959 wool fabrics tariff quota established by proclamation of September 28, 1956 which invoked so-called Geneva Wool Fabric Reservation. 1959 quota 13.5 million pounds. President also amended 1956 proclamation and established over-quota rate of duty of 30 percent ad valorem for up to 350,000 pounds over-quota imports certain high-priced, high-quality fabrics. (These described as fabrics wholly or chief value wool of sheep or hair of Angora goat, weighing over 6 ounces per square yard and having purchase price determined from invoice of $6.50 per pound, or weighing over 4 ounces, but not over 6 ounces, per per square yard and having purchase price determined from invoice of over $7.00 per pound.) This amendment similar President’s March 7, 1958 proclamation¹ which continues in force and which provided over-quota rate of 30 percent certain hand-woven and “religious” fabrics.

For 1959 imports up to 13.5 million pounds, rates of duty remain 30 cents or 37-½ cents per pound (depending upon nature fabric) plus 20 percent or 25 percent ad valorem (again depending upon nature fabric). Imports in excess 13.5 million pounds will, with exceptions mentioned above, be subject to full 45 percent ad valorem duty allowed by Geneva Reservation.

Geneva Reservation is right reserved by US in its schedule tariff concessions to General Agreement on Tariffs and Trade, negotiated 1947. Under reservation ad valorem rates applicable most woolen and worsted fabrics entering US may be increased when such imports, in any year, exceed amount determined by President be not less than 5 percent average annual US production similar fabrics three preceding calendar years. Reservation applies woolen and worsted fabrics provided for under paragraphs 1108 and 1109(a) of Tariff Act of 1930, as amended.

Last year, in announcing 1958 application of quota, President noted many problems arising under it and requested special review be undertaken.² While that review not yet developed permanent solution, better ways approaching this situation will continue be sought.

As background should be noted tariff quota smaller this year than either 1957 or 1958, only years in which quota in effect full year. Quota of 13.5 million pounds determined not less than 5 percent average annual domestic production 1956–58 calculated at 265.9 million pounds. Corresponding average 1955–57, as revised, was 281.3 million pounds. Most of decrease accounted for by substitution 1958 production figures for 1955. Small part of decrease accounted for by exclusion from production base some part-wool fabrics as being no longer chief value wool because of substantial decrease 1958 price raw wool and tops.

Should also be noted that Government agencies charged with review of problem gave careful consideration to possibility of allocating quota on country basis. Strong pressures for such allocations on part some countries and against by others. No formula for country allocations found acceptable to all major supplying countries and in accord with US commitments in GATT.

Embassies here informed April 20.

Substance this telegram unclassified after White House announcement released 9 a.m. April 21. Two background paragraphs may not be included White House release and should be used only in official contact.

This message for your information and use as required.³

Herter

0. Source: Department of State, Central Files, 411.004/4–2059. Confidential. Drafted by Brewster; cleared in substance with Elrod, Phelan, Areeda, NA, WE, EST, and S/S; and initialed for the Acting Secretary by Joe Robinson, Assistant Chief of the Trade Agreements Division of the Office of International Trade. Sent to London, Tokyo, Rome, Paris, The Hague, Brussels, Bern, Montevideo, Vienna, and Dublin.
1. Proclamation No. 3225; for text, see Department of State Bulletin, April 21, 1958, pp. 673–674.
2. Eisenhower’s March 7, 1958, letter to Weeks is ibid., p. 672.
3. Text of the White House press release is ibid., pp. 720–721. For texts of Proclamation No. 3285 and Eisenhower’s letter to Anderson, see American Foreign Policy: Current Documents, 1959, pp. 1462–1465.