[Weekly Compilation of Presidential Documents Volume 34, Number 23 (Monday, June 8, 1998)]
[Pages 1007-1009]
[Online from the Government Publishing Office, www.gpo.gov]

<R04>
Memorandum on Adjustment to Competition From Imports of Wheat Gluten

May 30, 1998

Memorandum for the Secretary of the Treasury, the Secretary of 
Agriculture, the United States Trade Representative

Subject: Action Under Section 203 of the Trade Act of 1974 Concerning 
Wheat Gluten

    On March 18, 1998, the United States International Trade Commission 
(USITC) submitted to me a report that contained: (1) a determination 
pursuant to section 202 of the Trade Act of 1974 (19 U.S.C. 2252) (the 
``Trade Act'') that imports of wheat gluten

[[Page 1008]]

are being imported into the United States in such increased quantities 
as to be a substantial cause of serious injury to the domestic industry; 
and (2) negative findings made pursuant to section 311(a) of the North 
American Free Trade Agreement Implementation Act (the ``NAFTA 
Implementation Act'') (19 U.S.C. 3371(a)) with respect to imports of 
wheat gluten from Canada and Mexico.
    After considering all relevant aspects of the investigation, 
including the factors set forth in section 203(a)(2) of the Trade Act 
(19 U.S.C. 2253), I have implemented actions of a type described in 
section 203(a)(3). Specifically, I have determined that the most 
appropriate action is a quantitative limitation on imports of wheat 
gluten. I have proclaimed such action for a period of approximately 3 
years in order to provide time for the domestic industry to implement an 
adjustment plan that will facilitate its positive adjustment to import 
competition. I have set the quantitative limitation at an amount equal 
to 126.812 million pounds in the first year, an amount which represents 
total average imports in the crop years ending June 30, 1993, through 
June 30, 1995. This amount will increase by six percent annually for the 
duration of the relief period. I believe that this amount is the relief 
necessary to remedy the serious injury and to promote positive 
adjustment. The quota is allocated based on average import shares in the 
period covered by the crop years ending June 30, 1993, through June 30, 
1995. Shares of countries excluded from the quota are assigned on a pro 
rata basis to

countries subject to the quota. To ensure that the quota is substantially 
filled, I have authorized the United States Trade Representative to 
reallocate any significant unused quota allocations. I considered taking 
other forms of action, such as increasing tariffs on imports of wheat 
gluten, and have determined that action in such forms would not, in light 
of the nature of trade in wheat gluten, meet the goals of remedying serious 
injury and facilitating industry adjustment.

    I agree with the USITC's findings under section 311(a) of the NAFTA 
Implementation Act, and therefore determine, pursuant to section 312(a) 
of the NAFTA Implementation Act, that imports of wheat gluten produced 
in Canada do not contribute importantly to the serious injury caused by 
imports and that imports of wheat gluten produced in Mexico do not 
account for a substantial share of total imports of such wheat gluten. 
Therefore, pursuant to section 312(b) of the NAFTA Implementation Act, 
the quantitative limitation will not apply to imports of wheat gluten 
from Canada or Mexico. Similarly, the limitation will not apply to 
imports of wheat gluten from Israel, and beneficiary countries under the 
Caribbean Basin Economic Recovery Act (CBERA) and the Andean Trade 
Preference Act (ATPA), in light of the USITC's statement that its 
recommendation does not apply to imports from those countries. Moreover, 
other developing countries that have accounted for a minor share of 
wheat gluten imports are excluded from the quantitative limitation.
    As an additional means of arriving at a long-term solution to this 
trade issue, I have directed the United States Trade Representative, 
with the assistance of the Secretary of Agriculture, to seek to initiate 
international negotiations to address the underlying cause of the 
increase in imports of the article or otherwise to alleviate the injury 
found to exist.
    I have determined that the actions described above will facilitate 
efforts by the domestic industry to make a positive adjustment to import 
competition and provide greater economic and social benefits than costs. 
This action provides the domestic industry with necessary temporary 
relief from increased import competition, while also assuring our 
trading partners significant continued access to the United States 
market.
    I also note that, pursuant to section 204 of the Trade Act, the 
USITC will monitor developments with respect to the domestic industry, 
including progress and specific efforts made by workers and firms in the 
domestic industry to make a positive adjustment to import competition, 
and will provide to me and to the Congress a report of its monitoring no 
later than the date that is the midpoint of the period the action is in 
effect.

[[Page 1009]]

    The United States Trade Representative is authorized and directed to 
publish this determination in the Federal Register.
                                            William J. Clinton

Note: This memorandum was released by the Office of the Press Secretary 
on June 1.