American Bolt, Nut, and Large Screw Industry Letter to the Speaker of the House and the President of the Senate Transmitting a Report.

Dear Mr. Speaker: (Dear Mr. President :)

In accordance with section 203 (b) (2) of the Trade Act of 1974, enclosed is a report to the Congress setting forth my determination that import relief for the U.S. bolt, nut, and large screw industry is not in the national economic interest, and explaining the reasons for my decision.

Sincerely,

JIMMY CARTER

IMPORT RELIEF ACTION

BOLTS, NUTS, AND LARGE SCREWS

As required under section 203(b)(2) of the Trade Act of 1974, I am transmitting this report to Congress setting forth the actions I will take with respect to bolts, nuts, and large screws covered by the affirmative finding on December 8, 1977, of the U.S. International Trade Commission (USITC) under section 201 (d) (1) of the Trade Act. As my action differs from that recommended by the USITC, I have included the reasons for my decision.

I have determined that import relief for the domestic nut, bolt, and large screw industry would not be in the national economic interest for the following reasons:

1. The USITC reported that domestic producers' shipments and exports had increased in 1976 and the first half of 1977. It also indicated that domestic producers' rates of return on sales were above the corresponding ratios for producers of all fabricated metal products and for all manufacturing corporations. Furthermore, domestic producers or their wholly Owned subsidiaries imported or purchased 20 25 percent of total 1976 shipments of imported fasteners in the United States. The domestic industry, particularly firms specializing in the production of automotive fasteners, has and should continue to benefit from increased U.S. consumption of fasteners.

2. Provision of import relief would have significantly increased costs of fasteners for U.S. manufacturers who use fasteners to produce cars, machinery, equipment, and construction items. The inflationary impact of providing relief could cause unemployment in other U.S. industries, offsetting gains in fastener employment if import relief had been imposed.

3. The Department of Labor has stated that reemployment prospects for unemployed fastener workers are fair since many of these workers are located in areas with unemployment rates below the national average.

4. Provision of import relief would subject U.S. jobs in other industries to possible foreign retaliation against U.S. exports or compensation by the United States by lessening U.S. import restrictions on other products.

5. Import relief would adversely affect U.S. international economic interests, particularly in light of U.S. efforts to reduce trade barriers in the multilateral trade negotiations.

6. The appreciation of the yen during 1977 will alleviate competitive pressures from Japanese fastener exports to the United States. Imports from Japan have comprised about three-fourths of total U.S. fastener imports in recent years.

In conjunction with my decision not to provide import relief on fasteners, I have directed the Secretary of the Treasury to initiate an expedited national security investigation, under Section 232 of the Trade Expansion Act of 1962 of U.S. imports of bolts, nuts, and large screws. I am taking this action in light of a staff study by the Federal Preparedness Agency which indicated that domestic fastener production capability was inadequate to satisfy U.S. requirements in a national emergency. This investigation will permit assessment of U.S. national security interests as they relate specifically to bolts, nuts, and large screws; I will consider whether to take action relating to imports of these products following completion of the national security investigation.