Findings 1/

On the basis of the investigation, the Commission finds:

1. That the articles described below are being, or are practical

ly certain to be, imported into the United States under such conditions
and in such quantities as to render or tend to render ineffective, or
materially interfere with, the price-support programs of the United
States Department of Agriculture for milk and butterfat, or to reduce
substantially the amount of products processed in the United States
from domestic milk and butterfat:

(a) Milk and cream, condensed or evaporated, provided
for in items 115.30, 115.35, and 115.40 of the
Tariff Schedules of the United States (TSUS);

(b) Natural Cheddar cheese made from unpasteurized
milk and aged not less than 9 months, which prior
to exportation has been certified to meet such
requirements by an official of a government agency
of the country where the cheese was produced;

(c) Cheese and substitutes for cheese containing,
or processed from, Edam and Gouda cheeses;

1

(d) Italian-type cheeses, made from cows' milk, not
in original loaves (Romano made from cows milk,
Reggiano, Parmesano, Provoloni, Provolette, and
Sbrinz), and cheese and substitutes for cheese
containing, or processed from, such Italian-type
cheeses, whether or not in original loaves;

(e) Cheese and substitutes for cheese provided for in
items 117.75 and 117.85 of the TSUS (except cheese
not containing cows' milk; cheese, except cottage.
cheese, containing no butterfat or not over 0.5
percent by weight of butterfat; and articles with-

1/ Commissioners Leonard and News om did not participate in this investigation. Commissioners Thunberg and Clubb are wholly in agreement with respect to findings and recommendations and therefore constitute a majority within the meaning of section 330(d) of the Tariff Act of 1930, as amended. The differences between them and Chairman Metzger and Vice Chairman Sutton on the findings are indicated in footnotes.

in the scope of other import quotas imposed under
section 22); 1/

(f) Swiss or Emmenthaler cheese with eye formation;
Gruyere-process cheese; and cheese and substitutes
for cheese containing, or processed from, such
cheeses;

(g) Chocolate provided for in item 156.30 of the TSUS,
if containing over 5.5 percent by weight of butter-
fat (except articles which are ready to eat and
are in retail packages of not over one pound each,
net weight); 2/

(h) Articles provided for in items 182.92 and 182.95
of the TSUS containing over 5.5 percent by weight
of butterfat, the butterfat of which is commer-
cially extractable, or which are capable of being
used for any edible purposes (except articles
which, as imported, are not suitable for use as
ingredients in the commercial production of edible
articles).

2.

That the articles specifically excepted above from findings 1(e), 1(g) and 1 (h) and the articles in items 156.20, 156.25, 156.40,

156.45, and 156.47 of the TSUS are not being and are not practically

·

certain to be, imported into the United States under such conditions and in such quantities as to render or tend to render ineffective, or materially interfere with, the price-support programs of the United States Department of Agriculture for milk and butterfat, or to reduce

1/ For the purposes of this finding, the emergency quota imposed by Proclamation 3870 is to be disregarded since it will be terminated when the President takes final action after receipt of the Commission's report.

2/ Vice Chairman Sutton, in addition to finding affirmatively with respect to the articles in item 156.30, also finds in the affirmative with respect to the articles in items 156.20, 156.25, 156.40, 156.45 and 156.47 of the TSUS, if containing over 5.5 percent by weight of butterfat, but subject to the exception above noted with respect to articles which are ready to eat and in retail packages of not over one pound each net weight.

substantially the amount of products processed in the United States from domestic milk and butterfat. 1/

3. That for the purposes of the 50-percent clause in the first proviso to section 22(b), the representative period for imports described in findings 1(a), 1(c), 1(d), 1(e), 1(f) and l(g) is the calendar years 1965 through 1967, inclusive. 2/

Recommendations 3/

The Commission recommends that the President issue a proclamation

pursuant to section 22(b)-

(a) establishing for each calendar year after 1968
quantitative limitations on the products covered
by finding 1, as follows:

Finding 1(a): 3,935,000 pounds
Finding 1(c): 2,907,000 pounds
Finding 1(d): 740,000 pounds
Finding 1(e): 17,606,000 pounds
Finding 1(f):

Natural -- 13,904,000 pounds
Other
8,528,000 pounds
Finding 1(g): Item 156.30: 10,436,000 pounds
Finding 1(h): Same quota quantities as at present
under items 950.12 and 950.13

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(b) allocating "aged" Cheddar (finding 1(b)) by country.

Chairman Metzger also finds in the negative with respect to--
(1) cheese and substitutes for cheese described in finding 1(e)
and the Swiss or Emmenthaler cheese with eye formation described
in finding 1(f) if having a purchase price (as defined in Presi-
dential Proclamation 3870 of September 24, 1968) of 37 cents or
more per pound.

(2) Gruyere process cheese in individually wrapped pieces weighing not over 3 ounces each (finding 1(f)); and

(3) chocolate in item 156.30 (finding 1(g)).

2/ Chairman Metzger finds that the representative period is the calendar year 1967. Vice Chairman Sutton finds that the representative period is the calendar years 1963 through 1965, inclusive.

3/ See footnote 1/, page 11. The differences between Commissioners Thunberg and Clubb and Chairman Metzger and Vice Chairman Sutton on the recommendations are fully explained in the individual statements of each Commissioner.

The Commission recommends that the proposed quotas be administered by means of a licensing system to assure an equitable distribution of the quotas among importers, users, and supplying countries. Such licensing procedures, to be administered by the U.S. Department of Agriculture, would be in keeping with the administration of nearly all other quantitative restrictions on U.S. imports of dairy products. To be equitable, the allocation of the quotas among supplying countries, while based upon the shares they supplied during a representative period, must reflect any special factors that have affected or may currently be affecting trade in the articles concerned. The principles set forth in Article XIII of the General Agreement on Tariffs and Trade (GATT) should be fully observed in the administration of the quotas. This article provides rules for the administration of quantitative restrictions to which the United States and the other GATT members have agreed.

Statement of Commissioner Thunberg
in which Commissioner Clubb Concurs

Mounting agricultural surpluses--including surpluses of dairy products--which are presently inundating the European Economic Community (EEC), buttressed by the Community's policy of subsidizing exports, make it clear that milk products from Europe can be landed in the United States at price levels substantially below those which have prevailed in this country in recent years. Pressures to minimize the costs of the Community's Common Agricultural Policy will, moreover, encourage the conversion of milk into any product which can be sold abroad for more than the cost of delivering it. In addition, excess dairy product output in the EEC has caused the accumulation of surpluses in other dairy-producing countries which formerly had exported sizable quantities to members of the Common Market. Exports of these third countries (primarily Denmark, Switzerland, Finland, and Austria), having been replaced by domestic output in the EEC, are increasingly seeking outlets in the high-priced U.S. market. The existence of this surplus milk production in Europe makes practically certain mounting imports of virtually all dairy products whose entry into the United States is not

subject to quantitative restrictions.