MINUTES ECONOMIC POLICY COUNCIL SEPTEMBER 6, 1985 2:00 P.M. ROOSEVELT ROOM

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP87M00539R002303830007-3
• Release Decision: RIPPUB
• Original Classification: K
• Document Page Count: 24
• Document Creation Date: December 22, 2016
• Document Release Date: November 9, 2010
• Sequence Number: 7
• Publication Date: October 7, 1985
• Content Type: MEMO

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THE WHITE HOUSE
WASHINGTON
Date: 10/7/85 Number: ------------- Due By:
$Ubjed: Economic Policy Council Minutes:
Action FYI
ALL CABINET MEMBERS ^ ^
Vice President
State
Treasury ^ ~
Defense
Justice ^
Interior ^ ^ ~
Agriculture ^ ~
Commerce
labor ^ (~
HHS ^ ^
HUD ^ ^
Transportation ^
Energy ^ ^
Chief of Staff ^ (~
Education ^ ^ ~
_
UN ^
I ICTR n
Vmq
CIA
~j ^
GSA
EPA
NASA
OPM
VA
SBA
CEA
CEQ
OSTP
McFarlane
Svahn
Chew (for WH Staffing)
Executive Secretary for:
DPC
EPC
Attached for your information are the minutes of the
following Economic Policy-Council meetings:
S 5
Se
Alfred H. Kingan ^ Don Clarey
~ Cabinet Secretary ^ Rick Davis
~ 456-2823 ^ Ed Stucky
(Ground Floor, West Wing)
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MINUTES-
ECONOMIC POLICY COUNCIL
September 6, 1985
2:00 p.m.
Roosevelt Room
Attendees: Messrs. Baker, Block, Baldrige, Brock, Yeutter,
Sprinkel, Wright, Boggs, Burnley, Kingon; McFarlane,.
Oglesby, McAllister, Khedouri, Danzansky, Low,
Mulford, Smart, Smith, Stucky, and Wallis. ,
1. Trade Policy Strategy
Secretary Baker stated that the purpose of the meeting was to
Ambassador Yeutter reviewed the House Republican proposals noting -
that the Administration has already enacted many of them or is
including them in our trade statement. Strengthening the Foreign
Commercial Service, requiring ambassadors to provide annual
reports on their embassies' export expansion strategy, decontrol-
ling exports of technology already available overseas, and
improving cooperation on.international financial issues are
either a part of the Administration's trade strategy or consis-
tent with it.
Ambassador Yeutter pointed out that the House Republicans
proposed to amend the Export Administration Act to permit the
export of Alaskan oil. Mr.'Boggs noted that if Alaskan oil were
exported to Japan, our bilateral trade deficit with Japan would
be reduced by $15 billion, but our overall merchandise trade
deficit would remain the same because we would import oil from
Mexico and Venezuela to make up for the Alaskan oil that would be
going abroad. Secretary Baldrige stated that the Export Adminis-
tration Act ,requires the .Commerce Department to study the
feasibility,of exporting North Slope oil by April 1986.
Mr. Burnley stated that exporting Alaskan oil would be strongly
opposed by the maritime industry, raising both budgetary and
national security questions. Mr. Boggs also noted that sales of
oil may raise an anti-Japanese reaction in the. United States.
The Council noted that the Administration is studying several of
the proposals offered by the House Republicans, including improving
the effectiveness of policies designed to assist workers dis-
placed by imports and creating a broad based bipartisan
commission on trade. The Council alsd noted that the
Administration would oppose several of the House Republican
proposals, including requiring. the United States Trade
Representative ,to take actions against countries declining to
participate in a new round of multilateral negotiations;
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Minutes . -
Economic Policy Council
September: 6; 1985`
Page two ;; ..
delegating Presidential authority under Sections 201 and 301 to'
the United States Trade Representative; and changing Section 201
into an unfair trade remedy, which it is not now.
Ambassador Yeutter reviewed several legislative initiatives that
might be part of a possible Administration trade bill. These
included: seeking authority for a new round of trade negoti-
ations; extending our non-tariff barrier authority, seeking
authority to reduce tariffs, and seeking authority to offer
compensation to other countries when the U.S..increases tariffs.
Mr. Yeutter also stated that Administration legislation might
better protect intellectual property rights by protecting against
the patent term for agricultural chemicals, and eliminating
Freedom of Information Act abuses by giving affected companies
notice and an opportunity to.oppose release of their business
confidential information. '
Ambassador Yeutter stated that several other components of
possible legislation might be improving the antidumping and-
countervailing duty laws by substituting a predictable pricing
test for non-market economies, establishing a dispute settlement
deadline on Section 301 cases, and establishing a fast track
procedure for Section 201. cases on perishable agricultural items.,
The Councils discussion focused on the advisability of the
Administration proposing our own trade bill, likely Congressional
allies, and the possibility that the bill might be expanded .to
such a degree that the President would have to veto it.
The Council .also discussed the possibility of seeking a biparti-
san commission on trade. Mr. McFarlane suggested that such a
commission might help us resist protectionist legislation in the
short term as a consensus develops about the long term agenda.
He stressed. that it ,is important that the United States and the
President be~in a'stronq position going into the Gorbachev
summit. Several Council members expressed support for the
commission as a long term approach, but questioned whether the
commission would have a short term effect.
The Council briefly discussed how to communicate. the President's
trade policy, weighing the advantages and disadvantages of a
televised speech.
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EXECUTIVESECK~.-neciA' ~
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Remarks Received ER, 1345,.'6 Sep 85.
xecutrve ecre a
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THE WHITE HOUSE
WASHINGTON
/(ice G ' cc~Q.o-.~i
~/a G
r Executive Registry
~34~/
CABINET AFFAIRS STAFFING MEMORANDUM
Date: 9/6/85 Number: 316980CA Due By:
Subject: Economic Policy Council Meeting
ALL CABINET MEMBERS
Vice President
State
Treasury
Defense
Justice
Interior
Agriculture
Commerce
Labor
HHS
HUD
Transportation
Energy
Chief of Staff
Education
OMB
~~.CIA ~`
UN
USTR
GSA
EPA
NASA
OPM
VA
SBA
Action FYI
^ ^
^ ^
~'.... ^
^ ^
^ ^
Svahn
^ ^
^ ^
^ ^
^ ^
The Economic Policy Council will meet today at 2:00 P.M.
in the Roosevelt Room.
Attached are two additional background papers for this
meeting.
^ Alfred H. Kingon
Cabinet Secretary
056-2823
(Ground Floor, West Wing)
^ Don Clarey
^ Rick Davis
^ Ed Stucky
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`NASHINGTON
September 6, 1985
MEMORANDUM FOR THE ECONOMIC POLICY COUNCIL
FROM: EUGENE J. McALLISTERE"'
SUBJECT: Agenda and Papers for Today's Meeting
The agenda and paper for today's meeting of the Economic
Policy Council are attached. The meeting is scheduled for
2:00 p.m. in the Roosevelt Room.
The single agenda item is the Administration's trade policy
strategy. The working group on trade policy strategy has
prepared two papers: an analysis of the House Republicans' trade
policy proposals and a description of the major initiatives the
Administration might seek through a trade bill. Both papers are
attached.
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ECONOMIC POLICY COUNCIL
September 6, 1985
Roosevelt Room
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TRADE OPTIONS FOR HOUSE REPUBLICANS
House Proposals Administration Position
1. Amend the Export Administration Act to ease 1. Forming export companies is covered in
restrictions on forming export companies as House proposal 4; helping small busi-
a way to help small businesses, also nesses obtain export licenses would not
improving the process of obtaining export require legislation, but the Administra-
licenses. tion could support an amendment to show-
case its efforts in this regard.
2. Provide better protection of the rights of 2. Administration supports this principle
legitimate U.S. inventors by penalizing a and any Administration package would
foreign country which without authoriza- likely include provisions on intellectual
tion makes and sells a product that has a property rights.
U.S. patent.
3. Through technical amendments to FOIA, require 3. Administration supports; this amendment
owners of proprietary information filed with would be included in any Administration
the Federal Government to be given the package that might be developed.
opportunit
to chall
y
enge requests under
FOIA before that info is released.
4. Amend Export Trading Company Act of 1982 to 4.
permit groups of companies to improve
pooling their resources in setting up
export companies.
5. Amend the Export Administration Act to
permit sale for export of Alaskan North
Slope oil. Sale of such oil to Japan
would reduce the U.S. merchandise trade
deficit with Japan by $15 billion per year.
The Export Trading Company Act of 1982
already permits groups of companies to
pool resources to establish export
trading companies.
5. Administration supports, but strong
maritime industry opposition makes it
politically very sensitive.
6. Propose a new Reagan Round of trade talks 6.
(which the GATT Council is expected to
approve on September 10) and give United
States Trade Representative the authority
to pursue specific reciprocal measures by
the U.S. such as removing duty free import
status from particular developing countries
Administration supports new negotiating
authority, but opposes any authority or
requirement to take actions against
countries that decline to participate in
such negotiations.
 House Proposals
unless the developing country participates
in new GATT negotiations. Such talks
should focus on violations of intellectual
property rights such as patents, trademarks,
copyrights and trade secrets, trade in
services, trade related investment issues
(such as eliminating performance require-
ments), and it should negotiate a code on
international information flows.
7. Review performance and strengthen personnel
of the Foreign Commercial Service in the
Commerce Department which represents small
businesses in negotiations with foreign
governments and companies.
8. Require U.S. ambassadors to provide annual
reports on their embassies' annual export
expansion strategy and their annual
accomplishments in helping U.S. industry
to improve its market position relative to
its overseas competitors.
9. Improve Agriculture Department use of the
"2 billion dollar war chest" for export
enhancement (Bicep).
11. Provide relief from export disincentives by
amending the Foreign Corrupt Practices Act
of 1977. Clarify liabilities of foreign
agents and make accounting provisions
clearer.
7. Administration does not oppose, but
notes it duplicates ongoing review.
8. Administration supports this concept,
although legislation is not required
to implement it.
9. Present guidelines are under continual
review to ensure their greatest pos-
sible effectiveness.
10. Administration will review this
proposal in the next budgetary process:
11. Administration has long supported relief
from such export disincentives, and
proposed a bill that has foundered in
the Congress.
 12. Decontrol exports of technology already
available overseas (Apple II computers
which are on the DOD list of controlled
technologies, can be purchased anywhere).
13. Direct the Eximbank to devise a competitive
U.S. approach to the mixed credit financing
offered by other nations until negotiations
result in a satisfactory reduction of this
practice.
14. Create a semiprivate nonprofit U.S. export
promotion organization managed by
representatives from the business community
with the support of state and local govern-
ment trade development groups (financed by
private contributions and user fees) designed
to support companies new to export marketing.
15. Create a bilateral free trade area with Canada
(similar to the one we now have with Israel)
to show that the U.S. hopes to keep its
borders open and plans to move ahead with
other free trading countries.
16. Amend the Trade Adjustment Assistance Act to
provide displaced workers with lumpsum pay-
ments earmarked for job retraining. Also
include incentives for private industry to
retrain workers and to administer the Act.
17. Permit individuals to withdraw savings from
IRAs for employment retraining without
penalty.
12. Such decontrol is already provided for
in the Export Administration Act
of 1985, and the Department of
Commerce is in the process of
implementing it through regulations.
]3. This is already being accomplished.
14. This unnecessarily duplicates existing
export promotion activities.
15. Administration has served the ball to
Canada; we anticipate a response from
the Canadian Government in the next
30 days.
16. This is under review by an EPC working
group; the Secretary of Labor will make
specific proposals on trade adjustment
assistance.
].7. This will be reviewed by an EPC
working group.
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House Proposals Administration Position
18. Permit displaced workers to enroll in 18. This will be reviewed by an EPC
employment training programs without working group.
penalizing their ability to receive
unemployment compensation.
19. Call for a broad-based bipartisan Business/ 19. This will be reviewed by the EPC at
Labor/Congressional Commission on Trade to the September 6 meeting.
re-evaluate trade laws on the books in the
context of current economic conditions
consistent with Section 135 of the 1989
Trade Act which provides for private sector
cooperation in determining trade problems.
20. Call for new international monetary conference 20. The concept is acceptable, but the
(Secretary Baker has endorsed) in an effort to wording should be taken from the EPC
improve cooperation on international financial paper on this subject.
issues. Among the items to consider is a
Common Market type of currency between the
U.S., Japan and Canada to decrease the
disparity between the yen and the dollar.
Cite new August 1985 CEO study showing that
more than 80 percent of trade deficit is due to
overvalued dollar. Encourage linking trade and
monetary policies in meetings with our major
trading partners.
21.
Re-evaluate?IMF and World Bank practices of
i
i
f
21.
This is already covered under existing
g
v
ng
unds to countries who subsidize
law.
22.
exports which penetrate U.S. markets (East
Germany, Chile, Zaire and Zambia which
export copper).
Amend Section 301 of Trade Act so that USTR,
if it d
22.
In proposals 22 through 24, the
etermines that a foreign country is
unf
i
l
Administration opposes delegating
a
r
y targeting a product, should suspend.
benefits
f
authority from the President to the
o
trade concessions to carry out
U.S. Trade Representative. The
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House Proposals Administration Position
trade agreements or direct customs officers targeting issue is addressed in the
to impose import restrictions on goods or Administration's trade policy
assess fees or impose restrictions on services statement.
of such a country for a given period of time.
All such actions would be subject to Presidential
veto.
to injured industries following investigations
by the ITC to determine whether. trade in a
particular good has been affected by foreign
government actions and the extent to which the
U.S. is the focal point for exports of such an
article. The USTR will then negotiate with the
country to establish more equitable, fair and
nondisruptive patterns of trade in such an
article.
Amend Section 201 of Trade Act so that USTR has 23. Same comment concerning delegation of
authority as above. Administration
opposes this option, which would
subvert Section 201 into an unfair
trade remedy, which it is not and
should not be.
24. Encourage USTR to take further specific Section 29. Same comment concerning delegation of
301 actions that emphasize U.S. willingness to authority as above. Administration is
retaliate against unfair overseas trade already vigorously enforcing Section 301
practices where necessary, including the through self-initiated investigations.
removal of duty-free import status from the
offending nation's top two export commodities
upon confirmation of. illegal trade practices.
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~SSIBLE ADMINISTRATION LEGISLATIVE PROPOS rS
The Administration trade package could include a legislative
initiative. In addition to acceptable proposals in the House
Republican trade package, the Administration initiative could
include the following elements:
1. Trade Negotiating Authori ~.
An Administration bill would provide comprehensive legislative
authority to support its trade negotiating initiatives, including:
-- authority for a new round of negotiations, already
endorsed by the President in his State of the Union
message and actively pursued within the GATT;
-- extension of our non-tariff barrier authority, which
otherwise expires January 3, 1988;
-- authority to reduce tariffs; and
-- authority to offer compensation to other countries
when the U.. S.._incr.eases tariffs (through Congres-
sional action or Customs reclassification), to avoid
unilateral foreign retaliation against U. S. exports.
2. Intellectual Property Rights.
we should also provide further protection to intellectual
property rights (patents, copyrights or trademarks), including:
-- protection against trade in articles that infringe
U. S. process patents;
-- extension of the patent term for agricultural
chemicals to match that for pharmaceutical inven-
tions; and
termination of Freedom of Information Act abuse by
giving affected companies notice and an opportunity
to oppose release of their business confidential
information.
3. Imarov ing the Antidumoing and Countervailing Duty rlWC,
Because the antidumping law does not work for non-market
economy (NME) countries and the countervailing duty law currently
is not applied to them, we need to substitute a predictable
pricing test.(along the lines of one proposed by Senator Heinz).
we should also effect less significant revisions to those laws,
including:
i
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clarification of standing requirements to file a
petition;
elimination of two-tiered judicial review, and
limitation to one appeal of agency decisions to the
Court of Appeals for the Federal Circuit;
revision of the "critical circumstances" standards
so that more timely relief can be provided more
often;
limited application of the injury test for countries
not party to the Subsidies Code (or equivalent
agreements);
-- codification of existing Administration practice
regarding provision of the injury test in counter-
vailing duty cases to less developed countries; and
-- other technical amendments proposed by the Admini-
stration last year but not enacted at that time.
4. Section O1.
Two amendments to section 301 would include:
-- enactment of a 24-month deadline on dispute
settlement; and
-- provision of extensions at petitioner's request.
5. Section 20 .*/
We could usefully amend section 201 in two ways:
-- provision of some type of "fast track" procedure
for perishable agricultural items; and
-- promotion of structural adjustment, by requiring
the International Trade Commission to assess the
petitioning industry's prospects for adjustment to
changing conditions of competition.
*/ Some in the TPRG noted that proposing amendments to section
201 in particular may aggravate the risk (already inherent in any
Administration trade package) of inviting protectionist riders.
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6. Statement of Nat~onat Trad Policy Objectives.
The preface to any Administration trade bill would be a
clear, forceful statement of the Administration's trade policy
objectives.
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-'-"" GXGCU'I-IVESECRE'I'ANIA"1'
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Remarks
This is the memo Jiln Baker sent to the President
a.s background for this afternoon's EPC meeting.
(This copy was obtained from SedDef's offi.ce\)
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Sept. 85
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