The U.S. government took a step yesterday designed to overcome what has threatened to become a block to the successful conclusion of the mulitilateral trade negotiations (MTN) in Geneva.
Treasury Department oddicials announced that starting January 3, they would postpone the imposition of countervailing duties that otherwise might have been required on some $600 million worth of goods, mostly from Europe.
Since January 3, 1975, under the authority of the Trade Act of 1974, the Secretary of the Treasury has had the authority to waive countervailing duties that other wise would have been imposed to offset subsidies paid in the exporting country.
But that authority expires on January 3, and without the steip announced yesterday, the Treasury would have been forced to slap countervailing duties on such goods.
The waiver provision was put in the 1974 law for a four-year period in anticipation that the negotiations would be concluded within that period. But the negotiations, which are expected to set out a code concerning subsidy and ountervailing duty practices, dragged out and are still in process.
Administration officials have tried unsuccessfully to get an extension of the waiver, at least until Congress gets the MTN legislation to consider. But European negotiators have been reluctant to make a final deal until they are sure that January 3, 1979 would not see the automatic re-imposition of the countervailig tarifts.
Actually, both Houses of Congress passed separate waiver-extenders, but the bills to which the extensions were attached did not become law. "We're sure we'll get the legislation early in the (next) session," a Treasury official said, "and we didn't want to mess things up in Geneva."
Treasury officials said they anticipate that extension of the waiver will be made retroactively to January 3, 1979. European officials, who of course would have preferred to see actual extension of the waiver before this time, nonetheless were pleased with the Treasury step. "Under the circumstances," said a Common Market information officer here, "I guess this is as much as could be expected."
In lieu of the duty, Treasury said that importers will be asked by the Customs Service to post bonds to cover ay liability that might eventually result if Congress fails for some reason to extend the waiver. The amounts of such bonds, the Treasury said, will be based on Treasury estimates of the net amount of subsidies that are supposed to be offset.
Whether or not the Treasury had the authority to postpone the imposition of countervailing duties was the subject of differing legal opinion.
The technical method used by the Treasury to postpone collection of the duties is suspension of "liquidation" of duties on all imports that have been the subject of countervailing duty waivers. The "liquidation" of imports is the second stage in the importation precess. The first is the entering and recording process when a ship enters port.
A second stage is when the customs inspector "liquidates" the imports by categorizing and impsing duties. In effect, this step will be suspended, allowing the goods to enter the country, assuming that bonds are posted in lieu of the estimated countervailing duty.