of a GATT working party to conduct a comprehensive study of conditions of world trade in textiles. The working group submitted its study to the GATT Council early in 1973. In the fall of that year, multilateral negotiations for a multifiber agreement began after passage of a 3-month extension of the LTA. The first Multifiber Arrangement (MFA I) was concluded on December 20, 1973, and came into force January 1, 1974.

MFA provisions

The MFA was modeled after the LTA and provides for bilateral agreements between textile importing and exporting nations (Article 4) and for unilateral actions following a finding of market disruption (Article 3).9 Quantitative restrictions are to be based on past volumes of trade, with the right, within certain limits, to transfer the quota amounts between products and between years. The MFA also provides generally for a minimum annual growth rate of 6 percent. 10 Quotas already in place had to be conformed to the MFA or abolished within a year. The products covered by MFA I, II, and III included all manufactured products whose chief value is represented by cotton, wool, man-made fibers or a blend thereof. Also included were products whose chief weight is represented by cotton, wool, man-made fibers or a blend thereof. MFA IV expanded product coverage to include products made of vegetable fibers such as linen and ramie, and silk blends as well.

A Textile Surveillance Body (TSB) was established to supervise the implementation of the MFA. The TSB is composed of a chairman and eight members from among the MFA signatories chosen by the GATT Textiles Committee. The TSB receives notification of all actions taken and agreements concluded under the MFA, examines them for conformity with the MFA, discusses those in dispute with the principals involved, and offers, where appropriate, nonbinding recommendations to the governments involved. It reports at least annually to the GATT Textiles Committee.

MFA I was in effect for 4 years, until the end of 1977. During MFA renewal negotiations in July 1977 the EC succeeded in putting in the renewal protocol a provision allowing jointly agreed "reasonable departures" from the MFA requirements in negotiating bilateral agreements. The MFA was then renewed for 4 more years. 11

MFA II was in effect through December 1981. On December 22, 1981, a protocol was initialed extending the MFA for an additional four and a half years, and providing a further interpretation of MFA requirements in light of 1981 conditions. 12 MFA III expired

• Market disruption exists when domestic producers are suffering "serious damage" or the threat thereof. Factors to be considered in determining whether the domestic producers are seriously damaged include: turnover, market share, profit, export performance, employment, volume of disruptive and other imports, production, utilization of capacity, productivity, and investments. Such damage must be caused by a sharp, substantial increase of particular products from particular sources which are offered at prices substantially below those prevailing in the importing country.

io The annual growth rate applies to overall levels of imports from a particular supplier country. Higher or lower growth rates can apply to particular products, as long as the overall growth rate with respect to that supplier country is 6 percent.

11 T.I.A.S. 8939 (1977).

12 T.I.A.S. 10323 (1981).

on July 31, 1986. MFA IV, currently in force, went into effect on August 1, 1986, and will expire on July 31, 1991.

BILATERAL TEXTILE AGREEMENTS

Under the authority of section 204 of the Agricultural Act of 1956, as amended, and in conformity with the MFA, the President has negotiated bilateral agreements restricting textile exports from various supplier countries. There are 38 such bilateral agreements currently in force.13 The agreements apply to textile products, covering not only fiber and fabric, but apparel as well.

The terms of each bilateral agreement are worked out through negotiation. The life of an agreement ranges from 3 to 6 years. Each agreement contains flexible, specific, and/or aggregate limits with respect to the type and volume of textile products that the supplier country can export to the United States. Limits are set in terms of square meter equivalents (SME's). The MFA allows, under certain conditions, for carryover (from the prior year to current year within the same product category), carryforward (from the subsequent year to the current year within the same product category), and swing (from one product category to another product category within the same year) of unused portions of quotas. These provisions may be applied only with respect to specific import limits set forth in the bilateral agreement. Each agreement also provides for adjustment of import levels in accordance with specified growth rates. Some of the bilaterals provide for an export control system to be administered by the exporting country to assure compliance with the terms of the agreement.

Consultation levels apply to categories which do not have specific limits. Once imports in a particular category reach the consultation level, the U.S. Government requests or "calls" for consultations to control imports in that product category. If consultations fail to produce an agreement on restrictive levels, and the United States is able to demonstrate that such imports are causing market disruption, then the United States may take unilateral action, such as an embargo, to restrict further imports in that product category. The Committee for Implementation of Textile Agreements (CITA) is responsible for administering the bilateral textile agreements program.14 CITA is composed of representatives from the Departments of Commerce, State, Labor, and Treasury, and the Office of the U.S. Trade Representative. The Commerce Department official is chair of the committee, and heads the Office of Textiles and Apparel (OTEXA) in the Department of Commerce which implements the terms of the agreements and decisions made by CITA. A primary function of CITA is to monitor imports and to determine when calls for consultations are to be made.

13 As of March 1, 1991.

14 Exec. Order 11651, 3 CFR 676 (1971-75 Comp.).

Fees and Quotas Under Section 22 of the Agricultural Adjustment Act of 1933

Section 22 of the Agricultural Adjustment Act of 1933, as amended, 15 authorizes the President to impose fees or quotas on imported products that undermine any U.S. Department of Agriculture (USDA) domestic commodity program. This authority, which has existed in some form since 1935,16 is designed to prevent imports from interfering with USDA efforts to stabilize or raise domestic agricultural commodity prices.

The protection of farm income has long been considered essential to assure the nation balanced and adequate supplies of food and fiber. A fundamental element of U.S. agricultural policy, therefore, has been the stabilization and support of farm prices. The Congress has mandated minimum support prices for some of the major storage farm commodities; discretionary support authority exists for other commodities; and in other cases, particularly for perishable products, growers are authorized to regulate marketing in their product sectors.

When world commodity prices are lower than domestic support prices, imports may enter the U.S. market in increasing quantities, and undercut domestic support prices. Consequently, either the USDA must remove larger quantities from the market or farmers must make sharper cuts in production. The negative effect that imports can have on the USDA's commodity price support programs provided the basis for enactment of import control authority in 1935. Section 31 of the Act of August 24, 1935 added section 22 to the Agricultural Adjustment Act of 1933. Since its enactment in 1935, section 22 has been amended several times.

Basic provisions

Under section 22, the Secretary of Agriculture is directed to advise the President when the Secretary has reason to believe that imports of any article "render or tend to render ineffective, or materially interfere with" any USDA price support or similar agricultural program, or "reduce substantially the amount of any product processed in the United States from any agricultural commodity or product thereof" which is the subject of an agricultural program. Such determination is usually based on USDA activities in monitoring imports, although private parties can request the Secretary to take action pursuant to this section.

If the President agrees that there is reason for such belief, he must order an investigation of the situation by the U.S. International Trade Commission (ITC). The ITC must give precedence to such investigation, and report its findings along with recommendations for action to the President.

Based on the ITC report, the President must determine whether the conditions specified in the statute exist. If the President makes an affirmative determination, he is required to impose, by proclamation, either import fees or import quotas sufficient to prevent

15 Act of May 12, 1933, ch. 25, title I, 48 Stat. 31, as amended by Public Law 74-320, section 31, 49 Stat. 773 and section 301 of Public Law 100-449, 102 Stat. 1851, 1865, 7 U.S.C. 624. 16 Section 22 was added by section 31 of the Act of August 24, 1935, Public Law 74-320, 49 Stat. 773.

imports of that product from harming or interfering with the relevant price support program. Any import fee imposed, however, may not exceed 50 percent ad valorem. Any import quota imposed may not exceed 50 percent of the quantity imported during a representative period, as determined by the President. These ceilings are statutorily set, and may not be exceeded even if, after imposition of fees or quotas, imports continue to enter the United States in such quantities as to interfere with any agricultural program. In designating the articles subject to such a fee or quota, the President may describe them by physical qualities, value, use, or any other basis.

If the Secretary of Agriculture determines and reports to the President that emergency action is needed, the President may take immediate interim action without awaiting a report by the ITC. Such interim action will continue in effect until the President acts on the ITC report.

Any decision of the President as to facts under section 22 is final. The President may modify, suspend, or terminate any fees or quotas imposed after an ITC investigation and report and a Presidential determination that changed circumstances require modification, suspension or termination.

Relationship to international agreements and other laws

The provisions of section 22 supersede any inconsistent provi sions of international agreements entered into by the United States. 17 The use of section 22 quotas is inconsistent with Articles II and XI of the General Agreement on Tariffs and Trade (GATT). (Article II prohibits unequal treatment of trading partners, and Article XI forbids the use of quantitative import restrictions). To remedy the inconsistency between section 22 and the GATT, the United States sought and received a waiver of the provisions of Articles II and XI in 1955.18

Fees and quotas established under section 22 are not affected by duty-free status granted under the Generalized System of Preferences or the Caribbean Basin Initiative. There are no provisions under section 22 for exclusion or preference of products from specific countries, except in accordance with the U.S.-Canada FreeTrade Agreement (FTA). Quotas imposed under the section are usually allocated among supplying countries in accordance with each. country's proportionate market share during a previous representative period.

In 1988, section 22 was amended to authorize the President to exempt certain products of Canada from any import restrictions imposed under that section. 19 This statutory amendment is limited to the provisions of articles 705 and 707 of the U.S.-Canada FTA, relating to import restrictions on grain and grain products and sugar-containing products. Under article 705 of the FTA, the United States and Canada reserved their rights to impose quantitative restrictions or import fees on imports of specified grains or

177 U.S.C. 624(f).

18 Decision of 5 March 1955 as reported in the Basic Instruments and Selected Documents, Third Supplement, General Agreement on Tariffs and Trade, Geneva, June 1955.

19 Section 301 of Public Law 101-449, approved September 28, 1988.

grain products when imports of the particular grain increase significantly as a result of a substantial change in the U.S. or Canadian support programs for that grain. Article 707 prohibits the United States from imposing import quotas or fees on Canadian products containing 10 percent or less sugar by dry weight for the purpose of restricting the sugar content of such products. Application

Since its enactment in 1935, section 22 has been used to impose import controls on 12 different commodities or groups of commodities: (1) wheat and wheat flour; (2) rye, rye flour, and rye meal; (3) barley, hulled or unhulled, including rolled, ground, and barley malt; (4) oats, hulled or unhulled, and unhulled ground oats; (5) cotton, certain cotton wastes, and cotton products; (6) certain dairy products; (7) shelled almonds; (8) shelled filberts; (9) peanuts and peanut oil; (10) tung nuts and tung oil; (11) flaxseed and linseed oil; and (12) sugars and sirups and sugar-containing products. Section 22 fees and quotas have since been terminated for most of these commodities. At the current time, however, import controls are in place to protect cotton, certain dairy products, peanuts and peanut products, refined sugar, and sugar-containing products. The fees and quotas applicable to imported products under section 22 are specified in section XXII of the Harmonized Tariff Schedule of the United States.

Meat Import Act of 1979

The Meat Import Act of 1979, as amended, 20 requires the President to impose quotas on imports of beef, veal, mutton, and goat meat when the aggregate quantity of such imports on an annual basis is expected to exceed a prescribed trigger level. The predecessor statute of the Meat Import Act of 1979 was the Meat Import Act of 1964,21 which provided similar authority to the President to impose quotas on meat imports, based on a different formula. Background

In 1964, the U.S. cattle industry was facing depressed economic conditions, and sought relief from increasing import competition. The Johnson Administration that year negotiated voluntary restraint agreements with Australia, New Zealand, Ireland and Mexico with respect to their exports of meat to the United States. Pressure for import quotas continued, however, and during the summer of 1964, the Meat Import Act of 1964 was passed by Congress and signed by President Johnson.

The Meat Import Act of 1964 required the President to impose quotas on imports of meat from cattle, goats and sheep whenever the Secretary of Agriculture determined that, without quotas, imports would equal or exceed a specified trigger level. The trigger was based on the average annual level of meat imports between 1959 and 1963, plus 10 percent, adjusted upward by the percentage increase, or downward by the percentage decrease, in domestic

20 Public Law 96-177, approved December 31, 1979, 93 Stat. 1291, as amended by section 301 of Public Law 100-449, approved September 28, 1988, 102 Stat. 1851, 1865, 19 U.S.C. 1202. 21 Public Law 88-482, approved August 22, 1964.