Domestic Copper Industry Letter to the Speaker of the House and the President of the Senate Transmitting a Report.

To Speaker Thomas O'Neill (To Vice President Walter Mondale)

In accordance with section 203 (b) (2) of the Trade Act of 1974, enclosed is a report to the Congress setting forth my decision that import relief on unwrought, unalloyed copper is not in the national economic interest, and explaining the reasons for my decision.

Sincerely,

JIMMY CARTER

IMPORT RELIEF ACTION UNWROUGHT UNALLOYED COPPER

As required by 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 unwrought, unalloyed copper covered by the affirmative finding, on August 23, 1978, of the U.S. International Trade Commission (USITC) under section 201 (d)(1) of the Trade Act. As my decision differs from that recommended by the USITC, I have included the reasons for my decision.

After considering all relevant aspects of this case, including those considerations set forth in section 202(c) of the Trade Act of 1974, I have determined that import relief is not in the national economic interest for the following reasons:

1. Import relief would impose significant costs on U.S. consumers of unwrought, unalloyed copper (refined copper). The increases in refined copper prices resulting from provision of relief could create incentives for circumvention of relief through increased imports of other copper products such as scrap, blister, and fabricated items. This would effectively reduce the level of protection provided to the domestic copper industry. Moreover, domestic copper fabricators would be faced with higher refined copper input costs and, at the same time, possible increased import competition in fabricated products.

2. Domestic copper market conditions have improved during 1978 and there is an improving outlook over the next several years for both the U.S. and world copper markets. U.S. and world copper prices have risen during 1978 and the world inventory overhang has declined. Domestic refined copper production increased during the first part of 1978; and imports have begun to decline from the high levels prevailing during the first part of the year.

3. 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 in the form of reducing import restrictions on other products.

4. Import relief would adversely affect U.S. international economic interests. It would be contrary to our efforts to reduce trade barriers in the MTN and to develop cooperative international solutions to the world copper industry's problems in the context of discussions in the UNCTAD Integrated Program for Commodities. Import relief would also affect our bilateral relations with Canada and with LDC copper producers, such as Chile, Zambia, and Peru, who are heavily dependent on copper exports as a source of foreign exchange earnings.

5. Trade adjustment assistance benefits have been and will continue to be available to copper mine, smelter, and refinery workers.