March 31, 1986

Consistent with his announcement last fall of his belief in a ``free but fair'' trade policy, the President today announced three new trade policy actions aimed at eliminating foreign unfair trade practices and securing open markets for American exports.

In the most significant case, the President has decided that the United States will take action against new European Community (EC) agricultural restrictions, which could affect as much as $1 billion in U.S. farm exports. The new restrictions were recently imposed by the EC following Spain and Portugal's accession to the EC. Unless the Community rescinds its illegal quotas and promptly provides compensation for its increased tariffs, the United States will offset the new restrictions by establishing quotas and increasing tariffs on EC products entering our market.

In the first use of new authorities granted in the Trade and Tariff Act of 1984 to address restrictive investment practices, the President has also directed U.S. Trade Representative Clayton Yeutter to initiate an investigation of Taiwan's automotive export performance requirements, which distort trade by forcing manufacturers to move a certain percentage of their production into export markets. The President has further directed Ambassador Yeutter to make fact-finding inquiries to determine whether the European Community's Third Country Meat Directive may unfairly penalize American exports of as much as $125 million worth of meat.

The United States has been fully supportive of the enlargement of the European Community to include Spain and Portugal. We do not, however, believe that the EC should use this occasion to impose new trade barriers. Americans should not have to pay for the benefits which EC member States will enjoy.