commercial production of these meats since the 1959-63 period. The President could suspend or raise the quotas, however, for overriding economic or national security interests, or for reasons of inadequate domestic supply.

The provisions of the 1964 law were expected to help raise domestic meat prices and thus help revive the domestic cattle industry. In the years following enactment, however, domestic cattle prices remained low.22 Moreover, until 1976 no quotas were imposed on meat imports. During many years the level of expected meat imports for that year fell below the trigger level. During other years, the Federal Government either negotiated voluntary restraint agreements with foreign suppliers, or suspended the required quotas due to "over-riding economic interests" simultaneously with their proclamation. In October of 1976 a quota was imposed on meat from Canada, but the quota was terminated at the end of that same year.

By the late 1970's U.S. livestock producers had stepped up efforts to strengthen the 1964 law. These efforts culminated in the passage of the Meat Import Act of 1979. Congress passed the Act on December 18, 1979, and December 31, 1979, President Carter signed it into law.

Basic provisions

The Meat Import Act of 1979 requires the President to impose a quota on imports of beef, veal, mutton, and goat meat when the aggregate quantity of such imports is expected to exceed an adjusted base quantity by 10 percent or more, on an annual basis. The trigger level, setting off quotas, is thus 110 percent of the adjusted base quantity.

From 1979 through March 1989, the base quantity has been statutorily set at 1,204,600,000 pounds. The base quantity is adjusted annually by a countercyclical formula which allows more imports when domestic supplies are low, and less imports when domestic supplies are abundant. The formula multiplies the base quantity by the ratio of average annual per capita production of domestic cow beef during the current and previous four calendar years to average annual per capita production of domestic cow beef in the current and immediately preceding year.

In the free trade agreement that the United States and Canada signed in January 1988, the two nations agreed to exempt each other from import quotas applied under their respective meat import laws.23 As a result, the base quantity set by the 1979 meat import law was reduced on April 1, 1989 to 1,147,600,000 pounds, to reflect the deletion of Canada's historic share of that figure.

Except for the change in the base quantity, the other provisions of the 1979 law remain the same. Estimates of the adjusted base

22 By the early 1970's farm prices for beef improved for a short time, but profits were again depressed after 1973 by overexpansion, rising production costs, and a decline in domestic consumption.

23 U.S. meat producers may still petition the U.S. International Trade Commission to impose countervailing duties on meat imports from Canada if they think that subsidized imports are injuring the U.S. industry.

quantity and expected imports are required on a quarterly basis. When expected annual imports reach the trigger level, the President is required to impose a quota set at 110 percent of the adjusted base quantity. However, the statute provides that import quotas may never be less than 1.193 billion pounds annually, or 1.25 billion pounds if an import limitation on Canadian products is in effect.

Any quota imposed must be allocated among supplying countries on the basis of their historic shares of the U.S. market, and would cover all articles included in the calculation of the adjusted base quantity.

A quota imposed under this Act may be suspended or raised by the President, if, after giving notice and providing opportunity for comment, he determines one of the following:

(1) suspension or increase is required by overriding economic or national security interests of the United States;

(2) domestic supply of such meat will be inadequate to meet domestic demand at reasonable prices; or

(3) trade agreements entered into force after date of enactment ensure that policy set forth will be carried out.

Additional conditions must be met prior to suspension or increase if the cattle cycle at that time is in the herd liquidation phase and domestic beef production is relatively high.

Reciprocal Meat Inspection Requirement

SECTION 20(h) OF THE FEDERAL MEAT INSPECTION ACT

Section 4604 of the Omnibus Trade and Competitiveness Act of 1988 24 amends section 20 of the Federal Meat Inspection Act (21 U.S.C. 620) to authorize strict enforcement of all standards which are applicable to meat articles in domestic commerce, for meat articles imported into the United States. If the Secretary of Agriculture determines that a foreign country applies meat inspection standards that are not related to public health concerns about endproduct quality which are substantiated by reliable analytical methods, the Secretary must consult with the United States Trade Representative and they shall make a recommendation to the President as to what action should be taken. The President may require that a meat article produced in a plant in such foreign country may not be permitted entry into the United States unless the Secretary determines that the meat article has met the standards applicable to meat articles in commerce within the United States. The annual report required generally under section 20 of the Federal Meat Inspection Act shall include the name of each foreign country that applies standards for the importation of meat articles from the United States that are not based on public health con

cerns.

Enactment of this provision resulted from congressional concern over the European Community's (EC) hormone ban, which effectively banned all meat exports from the United States to the EC that were treated with hormones, despite scientific evidence establishing the safety of U.S. production methods. At the time of enact

24 Public Law 100-418, approved August 23, 1988, 102 Stat. 1107, 1408, amending section 20 of Public Law 90-201, 21 U.S.C. 620.

ment, bilateral consultations with the EC were underway, and Congress wanted to strengthen the Administration's authority to respond to the EC action. The authority added by section 4604 was intended to be used either in addition to, or instead of, other authorities (such as section 301 of the Trade Act of 1974).

Sugar Tariff-Rate Quotas Under Harmonized Tariff Schedule Authorities

Additional U.S. Note 3 of Chapter 17 of the Harmonized Tariff Schedule of the United States (HTS) provides the authority to impose duties or quotas on imports of sugars, syrups and molasses described in HTS headings 1701.11, 1701.12, 1701.91, and 1701.99.25 This authority was created in 1967 26 to carry out a provision in the Geneva (1967) Protocol of the General Agreement on Tariffs and Trade (GATT) containing the results of the Kennedy Round of multilateral trade negotiations. 27

Background

The United States historically imported between 33 and 55 percent of its sugar needs, making it one of the world's largest sugar importers. At the same time, it has been this nation's policy to maintain its own sugar industry, even when world prices are substantially below production costs in the United States. A quota on sugar imports (including syrups and molasses) has been a common characteristic of U.S. sugar policy since 1934.

Sugar quota authority was first contained in sugar price support legislation in 1934. The Jones-Costigan Act of 1934 28 imposed a quota on sugar imports partly in response to the failure of high tariffs to solve a problem of low domestic sugar prices. The Sugar Act of 1937 29 renewed and revised the sugar program and this legislation continued to be extended until replaced by the Sugar Act of 1948.30 The 1948 legislation was amended and repeatedly extended until, failing renewal, it expired in 1973.

Authority to impose and to modify sugar quotas and duties was classified in the Tariff Schedule of the United States in 1967. Subsequently, the sugar quota headnote authority was incorporated into the Harmonized Tariff Schedule in 1989.

Application of headnote authority

A restrictive quota on sugar imports was imposed by President Reagan on May 5, 1982.31 The quota was allocated on a country-bycountry basis among supplying countries in accordance with their historic shares of the U.S. market.32 In order to facilitate the or

25 Sugar imported for refining and reexportation, or for use in the production of polyhydric alcohols, is exempt from the quota. Pres. Proc. 5002, Nov. 30, 1982, 47 Fed. Reg. 54269, 48 Fed. Reg. 29824.

26 Pres. Proc. 3822, Dec. 16, 1967, 82 Stat. 1455.

27 Note 1 of Unit A, Chapter 10, Part 1 of Schedule XX; 19 U.S.T., Part II, 1282.

28 Public Law 73-213, ch. 263, approved May 9, 1934, 7 U.S.C. 608-620.

29 Public Law 75-414, ch. 898, approved September 1, 1937, 7 U.S.C. 1100-1137.

30 Public Law 80-388, ch. 519, approved August 8, 1948, 7 U.S.C. 1100-1160.

31 Pres. Proc. 4941, May 5, 1982, 47 Fed. Reg. 34777.

32 The allocation is determined by taking the average of each country's sugar exports to the United States between 1975 and 1981, eliminating the highest and lowest levels, and computing this as a percent of the total quota.

derly importation of sugar during the quota year, a system was established that permits sugar from participating countries to enter the United States only if such imports are accompanied by certificates of eligibility. 33

From 1982 until 1990, the headnote authority was used to establish quantitative restrictions, in the form of an absolute quota, on imports of sugar. In 1988, the Government of Australia challenged the GATT legality of the U.S. import restrictions on sugar, and a dispute settlement proceeding was instituted pursuant to Article XXIII of the GATT. In May 1989 the GATT panel concluded its deliberations, finding that the U.S. sugar quotas were indeed inconsistent with Article XI of the GATT (which prohibits quantitative ⚫ restrictions). The panel report recommended either termination of the quotas, or action by the United States to bring the import restrictions into conformity with the GATT. The GATT panel report was adopted by the GATT Council in June 1989.

In response to the GATT panel report, the Bush Administration used the existing headnote authority to establish a scheme of tariffrate quotas for sugar imports, in lieu of the absolute quotas which had been found to be in violation of GATT. On September 13, 1990, President Bush signed Presidential Proclamation 6179 34 which provided for the establishment of tariff-rate quotas on sugar imports, beginning October 1, 1990. Under GATT rules, tariff-rate quotas are permitted if the tariffs are not above bound (trade agreement obligation) levels. In light of the fact that the U.S. sugar tariff is currently unbound, a tariff-rate quota system can be implemented in compliance with GATT rules.

Under the tariff-rate quota system, the Secretary of Agriculture announces a quantity of sugar that will be subject to current tariff rates (the "lower tier" tariff rate). This quantity is determined in a manner that takes into account expected domestic production, expected domestic consumption, and the legal requirement that the domestic sugar program be run at no net cost to the Federal Government. The quantity authorized at the lower tier rate is then allocated by the U.S. Trade Representative on a country-by-country basis to sugar-exporting countries according to historical trade. Any additional quantities of sugar imported above these allocated amounts are subject to a tariff rate of 16 cents per pound, raw value (the "upper tier" tariff rate). Countries eligible to receive duty-free treatment under the Generalized System of Preferences or the Caribbean Basin Initiative are eligible to receive duty-free treatment on the quantity of sugar permitted entry at the lower tier tariff rate.

Import Prohibitions on Certain Agricultural Commodities Under Marketing Orders

SECTION 8e OF THE AGRICULTURAL Adjustment Act, as ameNDED

Section 8e of the Agricultural Adjustment Act, as amended, 35 prohibits the importation of certain specified commodities which do

33 See Pres. Proc. 4941, May 5, 1982, 47 Fed. Reg. 34777.

34 55 Fed. Reg. 38293.

35 7 U.S.C. 608e-1

not meet relevant grade, size, quality or maturity requirements imposed under the marketing order in effect for such commodity. The specified commodities include tomatoes, raisins, olives, limes, grapefruit, green peppers, Irish potatoes, cucumbers, oranges, onions, walnuts, dates, filberts, table grapes, eggplants, kiwifruit, nectarines, plums, pistachios, and apples.

Any prohibition under this authority may not be made effective until after the Secretary of Agriculture gives reasonable notice (of not less than three days) and receives the concurrence of the U.S. Trade Representative. The Secretary of Agriculture may promulgate such rules and regulations as he deems necessary, to carry out the provision of this section.

Whenever the Secretary of Agriculture finds that the application of the restrictions under a marketing order to an imported commodity is not practicable because of variations in characteristics between the domestic and imported commmodity, he must establish with respect to the imported commodity such grade, size, quality, and maturity restrictions by varieties, types, or other classification as he finds will be equivalent or comparable to those imposed upon the domestic commodity under such order.

Section 4603 of the Omnibus Trade and Competitiveness Act of 1988 amended section 8e to provide additional authority for the Secretary to establish an additional period of time (not to exceed 35 days) for restrictions to apply to imported commodities, if the Secretary determines that such additional period of time is necessary to effectuate the purposes of the Act and to prevent the circumvention of the requirement of a seasonal marketing order. In making this determination, the Secretary must consider: (1) the extent to which imports during the previous year were marketed during the period of the marketing order and such imports did not meet the requirements of the marketing order; (2) if the importation into the United States of such commodity did, or was likely to, circumvent the grade, size, quality or maturity standards of a seasonal marketing order; and (3) the availability and price of commodities of the variety covered by the marketing order during any additional period the marketing order requirements are to be in effect.

Section 1308 of the Food, Agriculture, Conservation, and Trade Act of 1990 (the "1990 farm bill") amended section 8e to require the Secretary to consult with the U.S. Trade Representative prior to any import prohibition or regulation being made effective. The U.S. Trade Representative must advise the Secretary within 60 days of being notified, to ensure that the proposed grade size, quality, or maturity provisions are not inconsistent with U.S. international obligations. If the Secretary receives the concurrence of the U.S. Trade Representative, the proposed prohibition or regulation may proceed.