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COMMISSION DECISION NO 2871/82/ECSC OF 21 OCTOBER 1982 ON THE CONCLUSION OF AN ARRANGEMENT WITH THE UNITED STATES OF AMERICA RELATING TO STEEL

THE COMMISSION OF THE EUROPEAN COMMUNITIES ,

HAVING REGARD TO THE TREATY ESTABLISHING THE EUROPEAN COAL AND STEEL COMMUNITY , AND IN PARTICULAR ARTICLE 95 THEREOF ,

WHEREAS THE COMMUNITY STEEL INDUSTRY IS IN SERIOUS CRISIS ; WHEREAS , TO HELP IT TO RESTRUCTURE UNDER SOCIALLY ACCEPTABLE CONDITIONS , THE COMMUNITY HAS BEEN OBLIGED TO ADOPT A SERIES OF MEASURES INVOLVING , FOR CERTAIN PRODUCTS , A SYSTEM OF PRODUCTION QUOTAS ACCOMPANIED BY CERTAIN RULES AS REGARDS SALES ON THE COMMUNITY MARKET , THE TIGHTENING-UP OF THE RULES RELATING TO NON-DISCRIMINATORY PRACTICES AND PRICES AND THEIR EXTENSION TO INCLUDE CERTAIN DEALERS , AND ESTABLISHMENT OF COMMUNITY RULES ON AID ;

WHEREAS THE UNITED STATES HAS TAKEN A SERIES OF MEASURES RELATING TO THE SALE OF COMMUNITY STEEL PRODUCTS ON ITS MARKET ; WHEREAS THE UNITED STATES HAS HAD RECOURSE TO ANTI-DUMPING DUTIES , COUNTERVAILING DUTIES AND OTHER MEASURES WITH REGARD TO THE SALE OF COMMUNITY PRODUCTION ON THE UNITED STATES MARKET ; WHEREAS THOSE MEASURES ARE LIKELY TO DIVERT CONSIDERABLE QUANTITIES OF STEEL PRODUCTS FROM THEIR TRADITIONAL AMERICAN MARKETS TO OTHER MARKETS , INCLUDING THE COMMUNITY MARKET ;

WHEREAS , IN VIEW OF THIS SITUATION , IT WOULD APPEAR NECESSARY TO MAINTAIN REASONABLE SALES OF STEEL PRODUCTS ON THE UNITED STATES MARKET , THE MAIN EXPORT MARKET FOR THE COMMUNITY INDUSTRY ; WHEREAS , TO THAT END , THE COMMISSION OPENED NEGOTIATIONS WITH THE UNITED STATES OF AMERICA FOLLOWING THE COUNCIL DECISION OF 24 JULY 1982 CULMINATING , ON 6 AUGUST 1982 , IN THE TEXT OF AN ARRANGEMENT WHEREBY , IN PARTICULAR , THE PETITIONS OF THE AMERICAN INDUSTRY WOULD BE WITHDRAWN AND THE MEASURES TAKEN BY THE UNITED STATES ADMINISTRATION TERMINATED IN RETURN FOR THE RESTRICTION OF COMMUNITY EXPORTS , AND IN THE TEXT OF AN EXCHANGE OF LETTERS WHICH THE PARTIES AGREED TO RECOMMEND THAT THEIR RESPECTIVE AUTHORITIES APPROVE ;

WHEREAS THE DECISION TO CONCLUDE SUCH AN ARRANGEMENT IS NECESSARY IN ORDER TO ATTAIN , IN THE CONTEXT OF THE FUNCTIONING OF THE COMMON MARKET FOR STEEL , THE OBJECTIVES OF THE TREATY AS SET OUT , IN PARTICULAR , IN THE SECOND PARAGRAPH OF ARTICLE 2 OF THE TREATY ; WHEREAS THE TREATY DID NOT MAKE PROVISION FOR ALL THE CASES COVERED BY THIS DECISION ; WHEREAS THIS DECISION DOES NOT AFFECT THE POWERS OF THE MEMBER STATES IN MATTERS OF COMMERCIAL POLICY REFERRED TO IN ARTICLE 71 OF THE TREATY ;

HAVING CONSULTED THE CONSULTATIVE COMMITTEE AND WITH THE UNANIMOUS ASSENT OF THE COUNCIL ,

HAS ADOPTED THIS DECISION :

ARTICLE 1

1 . THE ARRANGEMENT BETWEEN THE EUROPEAN COAL AND STEEL COMMUNITY AND THE UNITED STATES OF AMERICA RELATING TO TRADE IN CERTAIN STEEL PRODUCTS TO BE CONCLUDED IN THE FORM OF AN EXCHANGE OF LETTERS IS HEREBY APPROVED ON BEHALF OF THE EUROPEAN COAL AND STEEL COMMUNITY .

2 . THE TEXTS OF THE ARRANGEMENT AND OF THE EXCHANGE OF LETTERS ARE ANNEXED TO THIS DECISION .

ARTICLE 2

THE COMMISSION SHALL DESIGNATE THE MEMBER OF THE COMMISSION EMPOWERED TO CARRY OUT THE EXCHANGE OF LETTERS FOR THE PURPOSE OF BINDING THE EUROPEAN COAL AND STEEL COMMUNITY .

ARTICLE 3

THIS DECISION SHALL ENTER INTO FORCE ON THE DAY OF ITS PUBLICATION IN THE OFFICIAL JOURNAL OF THE EUROPEAN COMMUNITIES .

THIS DECISION SHALL BE BINDING IN ITS ENTIRETY AND DIRECTLY APPLICABLE IN ALL MEMBER STATES .

DONE AT BRUSSELS , 21 OCTOBER 1982 .

FOR THE COMMISSION

ETIENNE DAVIGNON

VICE-PRESIDENT

THE HONORABLE MALCOLM BALDRIDGE ,

SECRETARY ,

DEPARTMENT OF COMMERCE ,

WASHINGTON DC 20230 ,

USA

BRUSSELS , 21 OCTOBER 1982

DEAR MR SECRETARY ,

AS WE HAVE DISCUSSED , THE EUROPEAN COAL AND STEEL COMMUNITY AND THE EUROPEAN ECONOMIC COMMUNITY ( EC ) ARE PREPARED TO RESTRAIN CERTAIN STEEL EXPORTS TO THE UNITED STATES .

IT IS OUR UNDERSTANDING THAT , IN CONJUNCTION WITH SUCH ACTION BY THE EC , THE UNITED STATES GOVERNMENT IS PREPARED TO UNDERTAKE CERTAIN OTHER ACTIONS VIS-A-VIS TRADE IN THESE PRODUCTS .

THE ELEMENTS OF OUR PROGRAMME AND A DESCRIPTION OF THE COMPLEMENTARY US ACTIONS ARE SET FORTH IN THE ENCLOSED TEXT ( THE ARRANGEMENT ) .

IN ENTERING INTO THIS ARRANGEMENT , THE EC DOES NOT ADMIT TO HAVING BESTOWED SUBSIDIES ON THE MANUFACTURE , PRODUCTION OR EXPORTATION OF THE PRODUCTS THAT ARE THE SUBJECT OF THE COUNTERVAILING DUTY PETITIONS TO BE WITHDRAWN OR THAT ANY SUCH SUBSIDIES HAVE CAUSED ANY MATERIAL INJURY IN THE USA . NEITHER DOES IT ADMIT THAT ITS ENTERPRISES HAVE ENGAGED IN DUMPING PRACTICES WHICH ARE THE SUBJECT OF THE ANTI-DUMPING DUTY PETITIONS TO BE WITHDRAWN OR THAT ANY SUCH PRACTICES HAVE CAUSED ANY MATERIAL INJURY IN THE USA .

THIS ARRANGEMENT IS ENTERED INTO WITHOUT PREJUDICE TO THE RIGHTS OF THE US GOVERNMENT AND OF THE EC UNDER GATT .

WE UNDERSTAND THAT THE US GOVERNMENT RECOGNIZES THE IMPLICATIONS OF THIS ARRANGEMENT VIS-A-VIS TRADE IN CERTAIN STEEL PRODUCTS , AS DEFINED IN THE ARRANGEMENT WITH THE EC , FOR INTERNATIONAL COMPETITIVENESS , NATIONAL ECONOMIC AND SECURITY INTERESTS , AND TRADE IN CAPITAL GOODS , AND WILL BE FULLY COGNIZANT OF THESE IMPLICATIONS IN EXERCISING ITS DISCRETIONARY AUTHORITY UNDER SECTION 337 OF THE TARIFF ACT OF 1930 , SECTIONS 201 AND 301 OF THE TRADE ACT OF 1974 , SECTION 232 OF THE TRADE EXPANSION ACT OF 1962 , AND SECTION 103 OF THE REVENUE ACT OF 1971 WITH REGARD TO SUCH PRODUCTS AND SHALL DO SO ONLY AFTER CONSULTATIONS WITH THE EC .

THE INDEPENDENT FORECASTER FOR THE PURPOSES OF ARTICLE 5 OF THE ARRANGEMENT SHALL BE DATA RESOURCES , INC .

CONSULTATIONS BETWEEN THE EC AND THE US WILL BE HELD IN 1985 TO REVIEW THE DESIRABILITY OF EXTENDING AND POSSIBLY MODIFYING THE ARRANGEMENT .

I LOOK FORWARD TO HEARING FROM YOU AT YOUR EARLY CONVENIENCE .

YOURS FAITHFULLY ,

ETIENNE DAVIGNON

VICE PRESIDENT

( ENCLOSURE )

ARRANGEMENT CONCERNING TRADE IN CERTAIN STEEL PRODUCTS BETWEEN THE EUROPEAN COAL AND STEEL COMMUNITY ( HEREINAFTER REFERRED TO AS " THE ECSC " ) AND THE UNITED STATES ( HEREINAFTER REFERRED TO AS " THE US " )

1 . BASIS OF THE ARRANGEMENT

RECOGNIZING THE POLICY OF THE ECSC OF RESTRUCTURING ITS STEEL INDUSTRY INCLUDING THE PROGRESSIVE ELIMINATION OF STATE AIDS PURSUANT TO THE ECSC STATE AIDS CODE ; RECOGNIZING ALSO THE PROCESS OF MODERNIZATION AND STRUCTURAL CHANGE IN THE UNITED STATES OF AMERICA ( HEREINAFTER REFERRED TO AS " THE USA " ) ; RECOGNIZING THE IMPORTANCE AS CONCLUDED BY THE OECD OF RESTORING THE COMPETITIVENESS OF OECD STEEL INDUSTRIES ; AND RECOGNIZING , THEREFORE , THE IMPORTANCE OF STABILITY IN TRADE IN CERTAIN STEEL PRODUCTS BETWEEN THE EUROPEAN ECONOMIC COMMUNITY ( HEREINAFTER REFERRED TO AS " THE COMMUNITY " ) AND THE USA .

THE OBJECTIVE OF THIS ARRANGEMENT IS TO GIVE TIME TO PERMIT RESTRUCTURING AND THEREFORE TO CREATE A PERIOD OF TRADE STABILITY .

TO THIS EFFECT THE ECSC ( 1 ) SHALL RESTRAIN EXPORTS TO OR DESTINED FOR CONSUMPTION IN THE USA OF PRODUCTS DESCRIBED IN ARTICLE 3 ( A ) , ORIGINATING IN THE COMMUNITY ( SUCH EXPORTS HEREINAFTER REFERRED TO AS " THE ARRANGEMENT PRODUCTS " ) , FOR THE PERIOD 1 NOVEMBER 1982 TO 31 DECEMBER 1985 .

THE ECSC SHALL ENSURE THAT , IN REGARD TO EXPORTS EFFECTED BETWEEN 1 AUGUST AND 31 OCTOBER 1982 , ABERRATIONS FROM SEASONAL TRADE PATTERNS OF ARRANGEMENT PRODUCTS WILL BE ACCOMMODATED IN THE ENSUING LICENSING PERIOD .

2 . CONDITION - WITHDRAWAL OF PETITIONS ; NEW PETITIONS

( A ) THE ENTRY INTO EFFECT OF THIS ARRANGEMENT IS CONDITIONAL UPON :

1 . THE WITHDRAWAL OF THE PETITIONS AND TERMINATION OF ALL INVESTIGATIONS CONCERNING ALL COUNTERVAILING DUTY AND ANTI-DUMPING DUTY PETITIONS LISTED IN APPENDIX A AT THE LATEST BY 21 OCTOBER 1982 ; AND

2 . RECEIPT BY THE US AT THE SAME TIME OF AN UNDERTAKING FROM ALL SUCH PETITIONERS NOT TO FILE ANY PETITIONS SEEKING IMPORT RELIEF UNDER US LAW , INCLUDING COUNTERVAILING DUTY , ANTI-DUMPING DUTY , SECTION 301 OF THE TRADE ACT OF 1974 ( OTHER THAN SECTION 301 " PETITIONS RELATING TO THIRD-COUNTRY SALES BY US EXPORTERS " ) , OR SECTION 337 OF THE TARIFF ACT OF 1930 , ON THE ARRANGEMENT PRODUCTS DURING THE PERIOD IN WHICH THIS ARRANGEMENT IS IN EFFECT .

( B ) IF , DURING THE PERIOD IN WHICH THIS ARRANGEMENT IS IN EFFECT , ANY SUCH INVESTIGATIONS ( 2 ) OR INVESTIGATIONS UNDER SECTION 201 OF THE TRADE ACT OF 1974 , SECTION 232 OF THE TRADE EXPANSION ACT OF 1962 , OR SECTION 301 OF THE TRADE ACT OF 1974 ( OTHER THAN SECTION 301 " PETITIONS RELATING TO THIRD-COUNTRY SALES BY US EXPORTERS " ) ARE INITIATED OR PETITIONS FILED OR LITIGATION ( INCLUDING ANTI-TRUST LITIGATION ) INSTITUTED WITH RESPECT TO THE ARRANGEMENT PRODUCTS , AND THE PETITIONER OR LITIGANT IS ONE OF THOSE REFERRED TO IN ARTICLE 2 ( A ) , THE ECSC SHALL BE ENTITLED TO TERMINATE THE ARRANGEMENT WITH RESPECT TO SOME OR ALL OF THE ARRANGEMENT PRODUCTS , AFTER CONSULTATIONS WITH THE US , AT THE EARLIEST 15 DAYS AFTER SUCH CONSULTATION .

IF SUCH PETITIONS ARE FILED OR LITIGATION COMMENCED BY PETITIONERS OR LITIGANTS OTHER THAN THOSE REFERRED TO IN THE PREVIOUS PARAGRAPH , OR INVESTIGATIONS INITIATED , ON ANY OF THE ARRANGEMENT PRODUCTS , THE ECSC WILL BE ENTITLED TO TERMINATE THE ARRANGEMENT WITH RESPECT TO THE ARRANGEMENT PRODUCT WHICH IS THE SUBJECT OF THE PETITION , LITIGATION OR INVESTIGATION , AFTER CONSULTATION WITH THE US , AT THE EARLIEST 15 DAYS AFTER SUCH CONSULTATION . IN ADDITION , IF DURING THESE CONSULTATIONS IT IS DETERMINED THAT THE PETITION , LITIGATION OR INVESTIGATION THREATENS TO IMPAIR THE ATTAINMENT OF THE OBJECTIVES OF THE ARRANGEMENT , THEN THE ECSC SHALL BE ENTITLED TO TERMINATE THE ARRANGEMENT , WITH RESPECT TO SOME OR ALL ARRANGEMENT PRODUCTS , AT THE EARLIEST 15 DAYS AFTER SUCH CONSULTATIONS .

THESE CONSULTATIONS WILL TAKE INTO ACCOUNT THE NATURE OF THE PETITIONS OR LITIGATION , THE IDENTITY OF THE PETITIONER OR LITIGANT , THE AMOUNT OF TRADE INVOLVED , THE SCOPE OF RELIEF SOUGHT AND OTHER RELEVANT FACTORS .

( C ) IF , DURING THE TERM OF THIS ARRANGEMENT , ANY OF THE ABOVEMENTIONED PROCEEDINGS OR LITIGATION IS INSTITUTED IN THE USA AGAINST CERTAIN STEEL PRODUCTS AS DEFINED IN ARTICLE 3 ( B ) , IMPORTED FROM THE COMMUNITY , WHICH ARE NOT SUBJECT TO THIS ARRANGEMENT AND WHICH SUBSTANTIALLY THREATEN ITS OBJECTIVE , THEN THE ECSC AND THE US , BEFORE TAKING ANY OTHER MEASURE , SHALL CONSULT TO CONSIDER APPROPRIATE REMEDIAL MEASURES .

3 . PRODUCT DESCRIPTION

( A ) THE PRODUCTS ARE :

- HOT-ROLLED SHEET AND STRIP ,

- COLD-ROLLED SHEET ,

- PLATE ,

- STRUCTURALS ,

- WIRE RODS ,

- HOT-ROLLED BARS ,

- COATED SHEET ,

- TIN PLATE ,

- RAILS ,

- SHEET PILING ,

AS DESCRIBED AND CLASSIFIED IN APPENDIX B BY REFERENCE TO CORRESPONDING TARIFF SCHEDULES OF THE UNITED STATES ANNOTATED ( TSUSA ) ITEM NUMBERS AND EC NIMEXE CLASSIFICATION NUMBERS .

( B ) FOR PURPOSES OF THIS ARRANGEMENT , THE TERM " CERTAIN STEEL PRODUCTS " REFERS TO THE PRODUCTS DESCRIBED IN APPENDIX E .

4 . EXPORT LIMITS

( A ) FOR THE PERIOD 1 NOVEMBER 1982 TO 31 DECEMBER 1983 ( HEREINAFTER REFERRED TO AS " THE INITIAL PERIOD " ) , AND THEREAFTER FOR EACH OF THE YEARS 1984 AND 1985 , EXPORT LICENCES SHALL BE REQUIRED FOR THE ARRANGEMENT PRODUCTS . SUCH LICENCES SHALL BE ISSUED TO COMMUNITY EXPORTERS FOR EACH PRODUCT , IN QUANTITIES NO GREATER THAN THE FOLLOWING PERCENTAGES , OF THE PROJECTED US APPARENT CONSUMPTION ( HEREINAFTER REFERRED TO AS " EXPORT CEILINGS " ) FOR THE RELEVANT PERIOD :

- HOT-ROLLED SHEET AND STRIP : 6.81 % ,

- COLD-ROLLED SHEET : 5.11 % ,

- PLATE : 5.36 % ,

- STRUCTURALS : 9.91 % ,

- WIRE RODS : 4.29 % ,

- HOT-ROLLED BARS : 2.38 % ,

- COATED SHEET : 3.27 % ,

- TIN PLATE : 2.20 % ,

- RAILS : 8.90 % ,

- SHEET PILING : 21.85 % .

FOR THE PURPOSES OF THIS ARRANGEMENT , " US APPARENT CONSUMPTION " SHALL MEAN SHIPMENTS ( DELIVERIES ) MINUS EXPORTS PLUS IMPORTS , AS DESCRIBED IN APPENDIX D .

( B ) WHERE ARRANGEMENT PRODUCTS IMPORTED INTO THE USA ARE SUBSEQUENTLY RE-EXPORTED THEREFROM , WITHOUT HAVING BEEN SUBJECT TO SUBSTANTIAL TRANSFORMATION , THE EXPORT CEILING FOR SUCH PRODUCTS FOR THE PERIOD CORRESPONDING TO THE TIME OF SUCH RE-EXPORT SHALL BE INCREASED BY THE SAME AMOUNT .

( C ) FOR THE PURPOSES OF THIS ARRANGEMENT , THE USA SHALL COMPRISE BOTH THE US CUSTOMS TERRITORY AND US FOREIGN TRADE ZONES . IN CONSEQUENCE , THE ENTRY INTO THE US CUSTOMS TERRITORY OF ARRANGEMENT PRODUCTS WHICH HAVE ALREADY ENTERED INTO A FOREIGN TRADE ZONE SHALL NOT THEN BE AGAIN TAKEN INTO ACCOUNT AS IMPORTS OF ARRANGEMENT PRODUCTS .

5 . CALCULATION AND REVISION OF US APPARENT CONSUMPTION FORECAST AND OF EXPORT LIMITS

THE US , IN AGREEMENT WITH ECSC , WILL SELECT AN INDEPENDENT FORECASTER WHICH WILL PROVIDE THE ESTIMATE OF US APPARENT CONSUMPTION FOR THE PURPOSES OF THIS ARRANGEMENT .

FOR THE INITIAL PERIOD , A FIRST PROJECTION OF THE US APPARENT CONSUMPTION , BY PRODUCT , WILL BE ESTABLISHED AS EARLY AS POSSIBLE AND IN ANY EVENT BEFORE 20 OCTOBER 1982 . A PROVISIONAL EXPORT CEILING FOR EACH PRODUCT WILL THEN BE CALCULATED FOR THAT PERIOD BY MULTIPLYING THE US APPARENT CONSUMPTION OF EACH PRODUCT BY THE PERCENTAGE INDICATED IN ARTICLE 4 FOR THAT PRODUCT . THESE FIGURES FOR PROJECTED CONSUMPTION WILL BE REVISED , IN DECEMBER 1982 , FEBRUARY , MAY , AUGUST AND OCTOBER OF 1983 , BY THE SAID INDEPENDENT FORECASTERS , AND APPROPRIATE ADJUSTMENTS WILL BE MADE TO THE EXPORT CEILINGS FOR EACH PRODUCT TAKING INTO ACCOUNT LICENCES ALREADY ISSUED UNDER ARTICLE 4 .

THE SAME PROCEDURE WILL BE FOLLOWED TO CALCULATE AND REVISE THE US APPARENT CONSUMPTION AND EXPORT CEILINGS FOR 1984 AND FOR 1985 , THE FIRST PROJECTION BEING ESTABLISHED BY THE INDEPENDENT FORECASTERS BY 1 OCTOBER OF 1983 AND 1984 RESPECTIVELY .

IN FEBRUARY OF EACH YEAR , AS FROM 1984 , ADJUSTMENTS TO THAT YEAR'S EXPORT CEILING FOR EACH PRODUCT WILL BE MADE FOR DIFFERENCES BETWEEN THE FORECASTED US APPARENT CONSUMPTION AND ACTUAL US APPARENT CONSUMPTION OF THAT PRODUCT IN THE PREVIOUS YEAR OR ( IN FEBRUARY 1984 ) IN THE INITIAL PERIOD .

6 . EXPORT LICENCES

( A ) BY DECISIONS AND REGULATIONS TO BE PUBLISHED IN THE OFFICIAL JOURNAL OF THE EUROPEAN COMMUNITIES , THE ECSC WILL REQUIRE AN EXPORT LICENCE FOR ALL ARRANGEMENT PRODUCTS . SUCH EXPORT LICENCES WILL BE ISSUED IN A MANNER THAT WILL AVOID ABNORMAL CONCENTRATION IN EXPORTS OF ARRANGEMENT PRODUCTS TO THE USA , TAKING INTO ACCOUNT SEASONAL TRADE PATTERNS . THE ECSC SHALL TAKE SUCH ACTION , INCLUDING THE IMPOSITION OF PENALTIES , AS MAY BE NECESSARY TO MAKE EFFECTIVE THE OBLIGATIONS RESULTING FROM THE EXPORT LICENCES . THE ECSC WILL INFORM THE US OF ANY VIOLATIONS CONCERNING THE EXPORT LICENCES WHICH COME TO ITS ATTENTION AND THE ACTION TAKEN WITH RESPECT THERETO .

EXPORT LICENCES WILL PROVIDE THAT SHIPMENT MUST BE MADE WITHIN A PERIOD OF THREE MONTHS .

EXPORT LICENCES WILL BE ISSUED AGAINST THE EXPORT CEILING FOR THE INITIAL PERIOD OR A SPECIFIC CALENDAR YEAR , AS THE CASE MAY BE . EXPORT LICENCES MAY BE USED AS EARLY AS 1 DECEMBER OF THE PREVIOUS YEAR WITHIN A LIMIT OF 8 % OF THE CEILING FOR THE GIVEN YEAR . EXPORT LICENCES MAY NOT BE USED AFTER 31 DECEMBER OF THE YEAR FOR WHICH THEY ARE ISSUED , EXCEPT THAT LICENCES NOT SO USED MAY BE USED DURING THE FIRST TWO MONTHS OF THE FOLLOWING YEAR WITH A LIMIT OF 8 % OF THE EXPORT CEILING OF THE PREVIOUS YEAR OR OF 8 % OF 86 % OF THE EXPORT CEILING OF THE INITIAL PERIOD , AS THE CASE MAY BE .

( B ) THE ECSC WILL REQUIRE THAT THE ARRANGEMENT PRODUCTS SHALL BE ACCOMPANIED BY A CERTIFICATE , SUBSTANTIALLY IN THE FORM SET OUT IN APPENDIX C , ENDORSED IN RELATION TO SUCH A LICENCE . THE US SHALL REQUIRE PRESENTATION OF SUCH CERTIFICATE AS A CONDITION FOR ENTRY INTO THE USA OF THE ARRANGEMENT PRODUCTS . THE US SHALL PROHIBIT ENTRY OF SUCH PRODUCTS NOT ACCOMPANIED BY SUCH A CERTIFICATE .

7 . TECHNICAL ADJUSTMENTS

( A ) THE SPECIFIC PRODUCT EXPORT CEILINGS PROVIDED FOR IN ARTICLE 4 MAY BE ADJUSTED BY THE ECSC WITH NOTICE TO THE US . ADJUSTMENTS TO INCREASE THE VOLUME OF ONE PRODUCT MUST BE OFFSET BY AN EQUIVALENT VOLUME REDUCTION FOR ANOTHER PRODUCT FOR THE SAME PERIOD . NOTWITHSTANDING THE PRECEDING SENTENCES , NO ADJUSTMENT MAY BE MADE UNDER THIS PARAGRAPH WHICH RESULTS IN AN INCREASE OR A DECREASE IN A SPECIFIC PRODUCT LIMITATION UNDER ARTICLE 4 BY MORE THAN 5 % BY VOLUME FOR THE RELEVANT PERIOD .

THE ECSC AND THE US MAY AGREE TO INCREASE THE ABOVE PERCENTAGE LIMIT .

( B ) NORMALLY , ONLY ONE CHANGE IN A SPECIFIC PRODUCT EXPORT CEILING IN A GIVEN YEAR OR THE INITIAL PERIOD MAY BE MADE BY AN ADJUSTMENT UNDER THE PRECEDING PARAGRAPH OR USE OF LICENCES IN DECEMBER OR JANUARY/FEBRUARY UNDER ARTICLE 6 ( A ) . ACCORDINGLY , CHANGES IN A GIVEN YEAR OR THE INITIAL PERIOD BY USE OF MORE THAN ONE OF THOSE THREE PROVISIONS MAY BE MADE ONLY UPON AGREEMENT BETWEEN THE ECSC AND THE US .

8 . SHORT SUPPLY

ON THE OCCASION OF EACH QUARTERLY CONSULTATION PROVIDED FOR IN ARTICLE 10 , THE US AND THE ECSC WILL EXAMINE THE SUPPLY AND DEMAND SITUATION IN THE USA FOR EACH OF THE PRODUCTS LISTED IN APPENDIX B . IF THE US IN CONSULTATION WITH THE ECSC DETERMINES THAT , BECAUSE OF ABNORMAL SUPPLY OR DEMAND FACTORS , THE US STEEL INDUSTRY WILL BE UNABLE TO MEET DEMAND IN THE USA FOR A PARTICULAR PRODUCT ( INCLUDING SUBSTANTIAL OBJECTIVE EVIDENCE SUCH AS ALLOCATION , EXTENDED DELIVERY PERIODS OR OTHER RELEVANT FACTORS ) , AN ADDITIONAL TONNAGE SHALL BE ALLOWED FOR SUCH PRODUCT OR PRODUCTS , BY A SPECIAL ISSUE OF LICENCES , LIMITED TO 10 % OF THE ECSC'S UNADJUSTED EXPORT CEILING FOR THAT PRODUCT OR PRODUCTS .

IN EXTRAORDINARY CIRCUMSTANCES , AS DETERMINED BY THE US IN CONSULTATION WITH THE ECSC , THE US WILL INCREASE THE ALLOWABLE LEVEL OF SPECIAL LICENCES .

EACH AUTHORIZED SPECIAL ISSUE EXPORT LICENCE AND CERTIFICATE DERIVED THEREFROM SHALL BE SO MARKED . EACH SUCH LICENCE MUST BE USED WITHIN 180 DAYS AFTER THE START OF THE QUARTER WHEN THAT SPECIAL ISSUE BEGAN .

9 . MONITORING

THE ECSC WILL , WITHIN ONE MONTH OF EACH QUARTER AND FOR THE FIRST TIME BY 31 JANUARY 1983 , SUPPLY THE US WITH SUCH NON-CONFIDENTIAL INFORMATION ON ALL EXPORT LICENCES ISSUED FOR ARRANGEMENT PRODUCTS AS IS REQUIRED FOR THE PROPER FUNCTIONING OF THIS ARRANGEMENT .

THE US WILL COLLECT AND TRANSMIT QUARTERLY TO THE ECSC ALL NON-CONFIDENTIAL INFORMATION RELATING TO CERTIFICATES RECEIVED DURING THE PRECEDING QUARTER IN RESPECT OF THE ARRANGEMENT PRODUCTS , AND RELATING TO ACTIONS TAKEN IN RESPECT OF ARRANGEMENT PRODUCTS FOR VIOLATIONS OF CUSTOMS LAWS .

10 . GENERAL

QUARTERLY CONSULTATIONS SHALL TAKE PLACE BETWEEN THE ECSC AND THE US ON ANY MATTER ARISING OUT OF THE OPERATION OF THE ARRANGEMENT . CONSULTATIONS SHALL BE HELD AT ANY OTHER TIME AT THE REQUEST OF EITHER THE ECSC OR THE US TO DISCUSS ANY MATTERS , INCLUDING TRENDS IN THE IMPORTATION OF CERTAIN STEEL PRODUCTS , WHICH IMPAIR OR THREATEN TO IMPAIR THE ATTAINMENT OF THE OBJECTIVES OF THIS ARRANGEMENT .

IN PARTICULAR , IF IMPORTS FROM THE ECSC OF CERTAIN STEEL PRODUCTS OTHER THAN ARRANGEMENT PRODUCTS OR OF ALLOY ARRANGEMENT PRODUCTS SHOW A SIGNIFICANT INCREASE , INDICATING THE POSSIBILITY OF DIVERSION OF TRADE FROM ARRANGEMENT PRODUCTS TO CERTAIN STEEL PRODUCTS OTHER THAN ARRANGEMENT PRODUCTS OR FROM CARBON TO ALLOY WITHIN THE SAME ARRANGEMENT PRODUCT , CONSULTATIONS WILL BE HELD BETWEEN THE US AND THE ECSC WITH THE OBJECTIVE OF PREVENTING SUCH DIVERSION , TAKING INTO ACCOUNT THE ECSC 1981 US MARKET-SHARE LEVELS .

SHOULD THESE CONSULTATIONS DEMONSTRATE THAT THERE HAS INDEED BEEN A DIVERSION OF TRADE WHICH IS SUCH AS TO IMPAIR THE ATTAINMENT OF THE OBJECTIVES OF THE ARRANGEMENT , THEN WITHIN 60 DAYS OF THE REQUEST FOR CONSULTATIONS BOTH SIDES WILL TAKE THE NECESSARY MEASURES FOR THE PRODUCTS CONCERNED IN ORDER TO PREVENT SUCH A DIVERSION . FOR ALLOY ARRANGEMENT PRODUCTS , SUCH MEASURES WILL INCLUDE THE CREATION OF SEPARATE PRODUCTS FOR PURPOSES OF ARTICLES 3 AND 4 AT THE ECSC 1981 US MARKET-SHARE LEVELS . FOR CERTAIN STEEL PRODUCTS , OTHER THAN ARRANGEMENT PRODUCTS , SUCH MEASURES MAY INCLUDE THE CREATION OF PRODUCTS FOR PURPOSES OF ARTICLES 3 AND 4 .

CONSULTATIONS WILL ALSO BE HELD IF THERE ARE INDICATIONS THAT IMPORTS FROM THIRD COUNTRIES ARE REPLACING IMPORTS FROM THE ECSC .

11 . SCOPE OF THE ARRANGEMENT

THIS ARRANGEMENT SHALL APPLY TO THE US CUSTOMS TERRITORY ( EXCEPT AS OTHERWISE PROVIDED IN ARTICLE 4 ( C ) ) AND TO THE TERRITORIES TO WHICH THE TREATY ESTABLISHING THE ECSC AS PRESENTLY CONSTITUTED APPLIES ON THE CONDITIONS LAID DOWN IN THAT TREATY .

12 . NOTICES

FOR ALL PURPOSES HEREUNDER , THE US AND THE ECSC SHALL BE REPRESENTED BY AND ALL COMMUNICATIONS AND NOTICES SHALL BE GIVEN AND ADDRESSED TO :

- FOR THE ECSC :

THE COMMISSION OF THE EUROPEAN COMMUNITIES

( DIRECTORATES GENERAL FOR EXTERNAL RELATIONS ( I ) AND FOR INTERNAL MARKET AND INDUSTRIAL AFFAIRS ( III ) ) ,

RUE DE LA LOI , 200 ,

B-1049 BRUSSELS

( TEL . 235 11 11 ; TELEX 21877 COMEU B ) ;

- FOR THE US :

US DEPARTMENT OF COMMERCE ,

DEPUTY ASSISTANT SECRETARY FOR IMPORT ADMINISTRATION ,

INTERNATIONAL TRADE ADMINISTRATION ,

WASHINGTON DC 20230

( TEL . 202/377 17 80 ; TELEX 892536 USDOC WSH DAS/IA/ITA ) .

( 1 ) TO THE EXTENT THAT THE ARRANGEMENT PRODUCTS ARE SUBJECT TO THE TREATY ESTABLISHING THE EUROPEAN ECONOMIC COMMUNITY ( THE EEC ) , THE TERM " ECSC " SHOULD BE SUBSTITUTED BY " EEC " .

( 2 ) WITH RESPECT TO ANY SECTION 337 INVESTIGATION , THE PARTIES SHALL CONSULT TO DETERMINE THE BASIS FOR THE INVESTIGATION .

APPENDIX A

LIST OF COUNTERVAILING DUTY ( CVD ) AND ANTI-DUMPING DUTY ( AD ) PETITIONS ( 1 ) TO BE WITHDRAWN :

- CVD PETITIONS , FILED ON 11 JANUARY 1982 BY 1 . UNITED STATES STEEL CORPORATION , 2 . BETHLEHEM STEEL CORPORATION , AND 3 . REPUBLIC STEEL CORPORATION , INLAND STEEL COMPANY , JONES AND LAUGHLIN STEEL , INC . , NATIONAL STEEL CORPORATION , AND CYCLOPS CORPORATION , CONCERNING CERTAIN STEEL PRODUCTS FROM BELGIUM , FRANCE , THE FEDERAL REPUBLIC OF GERMANY , ITALY , LUXEMBOURG , THE NETHERLANDS , THE UNITED KINGDOM AND THE EUROPEAN COMMUNITIES .

- AD PETITIONS , FILED ON 11 JANUARY 1982 BY 1 . UNITED STATES STEEL CORPORATION , AND 2 . BETHLEHEM STEEL CORPORATION , CONCERNING CERTAIN STEEL PRODUCTS FROM BELGIUM , FRANCE , THE FEDERAL REPUBLIC OF GERMANY , ITALY , LUXEMBOURG , THE NETHERLANDS AND THE UNITED KINGDOM .

- CVD PETITIONS , FILED ON 8 FEBRUARY 1982 BY ATLANTIC STEEL CORPORATION , GEORGETOWN STEEL CORPORATION , GEORGETOWN TEXAS STEEL CORPORATION , KEYSTONE CONSOLIDATED , INC . , KORF INDUSTRIES , INC . , PENN DIXIE STEEL CORPORATION AND RARITAN RIVER STEEL COMPANY , CONCERNING CARBON STEEL WIRE ROD FROM BELGIUM AND FRANCE .

- CVD PETITIONS , FILED ON 7 MAY 1982 BY UNITED STATES STEEL CORPORATION , CONCERNING CARBON STEEL WELDED PIPE FROM FRANCE , THE FEDERAL REPUBLIC OF GERMANY AND ITALY .

- CVD PETITION , FILED ON 3 SEPTEMBER 1982 BY CF AND I STEEL CORPORATION , CONCERNING STEEL RAILS FROM THE EUROPEAN COMMUNITIES .

- AD PETITIONS , FILED ON 3 SEPTEMBER 1982 BY CF AND I STEEL CORPORATION , CONCERNING STEEL RAILS FROM FRANCE , THE FEDERAL REPUBLIC OF GERMANY AND THE UNITED KINGDOM .

( 1 ) FOR PURPOSES OF THIS ARRANGEMENT , THE TERM " PETITIONS " COVERS ALL MATTERS INCLUDED IN THE PETITIONS FILED ON THE DATES LISTED , WHETHER OR NOT THE DOC INITIATED INVESTIGATIONS ON THE PRODUCTS OR COUNTRIES CONCERNED .

APPENDIX B , C , D , E : SEE O.J . NO L 307 OF 1 . 11 . 82

VICOMTE ETIENNE DAVIGNON ,

VICE-PRESIDENT OF THE COMMISSION OF THE EUROPEAN COMMUNITIES ,

RUE DE LA LOI , 200 ,

B-1049 BRUSSELS

WASHINGTON , 21 OCTOBER 1982

DEAR MR VICE PRESIDENT ,

I HAVE RECEIVED YOUR LETTER OF 21 OCTOBER 1982 WORDED AS FOLLOWS :

" AS WE HAVE DISCUSSED , THE EUROPEAN COAL AND STEEL COMMUNITY AND THE EUROPEAN ECONOMIC COMMUNITY ( EC ) ARE PREPARED TO RESTRAIN CERTAIN STEEL EXPORTS TO THE UNITED STATES .

IT IS OUR UNDERSTANDING THAT , IN CONJUNCTION WITH SUCH ACTION BY THE EC , THE UNITED STATES GOVERNMENT IS PREPARED TO UNDERTAKE CERTAIN OTHER ACTIONS VIS-A-VIS TRADE IN THESE PRODUCTS .

THE ELEMENTS OF OUR PROGRAMME AND A DESCRIPTION OF THE COMPLEMENTARY US ACTIONS ARE SET FORTH IN THE ENCLOSED TEXT ( THE ARRANGEMENT ) .

IN ENTERING INTO THIS ARRANGEMENT , THE EC DOES NOT ADMIT TO HAVING BESTOWED SUBSIDIES ON THE MANUFACTURE , PRODUCTION OR EXPORTATION OF THE PRODUCTS THAT ARE THE SUBJECT OF THE COUNTERVAILING DUTY PETITIONS TO BE WITHDRAWN OR THAT ANY SUCH SUBSIDIES HAVE CAUSED ANY MATERIAL INJURY IN THE USA . NEITHER DOES IT ADMIT THAT ITS ENTERPRISES HAVE ENGAGED IN DUMPING PRACTICES WHICH ARE THE SUBJECT OF THE ANTI-DUMPING DUTY PETITIONS TO BE WITHDRAWN OR THAT ANY SUCH PRACTICES HAVE CAUSED ANY MATERIAL INJURY IN THE USA .

THIS ARRANGEMENT IS ENTERED INTO WITHOUT PREJUDICE TO THE RIGHTS OF THE US GOVERNMENT AND OF THE EC UNDER GATT .

WE UNDERSTAND THAT THE US GOVERNMENT RECOGNIZES THE IMPLICATIONS OF THIS ARRANGEMENT VIS-A-VIS TRADE IN CERTAIN STEEL PRODUCTS , AS DEFINED IN THE ARRANGEMENT WITH THE EC , FOR INTERNATIONAL COMPETITIVENESS , NATIONAL ECONOMIC AND SECURITY INTERESTS , AND TRADE IN CAPITAL GOODS , AND WILL BE FULLY COGNIZANT OF THESE IMPLICATIONS IN EXERCISING ITS DISCRETIONARY AUTHORITY UNDER SECTION 337 OF THE TARIFF ACT OF 1930 , SECTIONS 201 AND 301 OF THE TRADE ACT OF 1974 , SECTION 232 OF THE TRADE EXPANSION ACT OF 1962 , AND SECTION 103 OF THE REVENUE ACT OF 1971 WITH REGARD TO SUCH PRODUCTS AND SHALL DO SO ONLY AFTER CONSULTATIONS WITH THE EC .

THE INDEPENDENT FORECASTER FOR THE PURPOSES OF ARTICLE 5 OF THE ARRANGEMENT SHALL BE DATA RESOURCES , INC .

CONSULTATIONS BETWEEN THE EC AND THE US WILL BE HELD IN 1985 TO REVIEW THE DESIRABILITY OF EXTENDING AND POSSIBLY MODIFYING THE ARRANGEMENT .

I LOOK FORWARD TO HEARING FROM YOU AT YOUR EARLY CONVENIENCE . "

I HAVE THE HONOUR TO CONFIRM THE AGREEMENT OF THE US GOVERNMENT WITH THE CONTENTS OF YOUR LETTER .

VERY TRULY YOURS ,

MALCOLM BALDRIDGE

SECRETARY OF COMMERCE