May 15, 1986
The President today proclaimed quotas on agriculture imports from the European Community in response to the EC's quotas on U.S. agricultural exports to Portugal. We have been assured by the EC that their quotas will have no immediate impact on our trade. As long as that remains the case, our quotas will be similarly nonrestrictive. However, should the EC's quantitative restrictions begin to restrict U.S. exports, the U.S. quotas will be adjusted to have a comparable effect or the President may substitute tariff increases for the quotas.
This action follows the President's announcement on March 31 that the U.S. would respond in kind to the EC's import restrictions on grains and oilseeds imposed in Portugal following that country's accession to the EC. The U.S. quotas will be effective May 19 on EC white wine with a value of more than $4 per gallon, chocolate, candy, apple or pear juice, and beer. The President indicated his willingness to suspend these measures and refer the matter to the General Agreement on Tariffs and Trade (GATT) if the EC will agree to do the same.
The President has also decided to suspend certain tariff concessions, effective in 30 days. The action will not increase tariffs, however, and the decision on any duty increases will be deferred until July to allow time for negotiation of compensation for EC tariff action affecting U.S. exports of feed grains to Spain.
This is a dispute the U.S. sought to avoid. But we cannot overlook the EC's unilateral actions which clearly violate GATT rules and affect some of our most sensitive exports. Our response is fair and measured. We hope the EC will respond in a way that will help us settle this disagreement without further damaging our trading relationship.