TNAG-1491-FCO40-2049-Future-of-Hong-Kong-General-Agreement-on-Tariffs-and-Trade-(-1986 — Page 90

U.S. LEGAL CONSTRAINTS:

4

also

:

U.S. law (Section 402 of the 1974 Trade Act known as the Jackson-Vanik Amendment) prohibits the extension of Most Favored Nation (MFN) treatment to East Bloc countries which do not provide for freedom of emigration effectively excluding all of the Eastern European countries from MFN eligibility, with the exception of Yugoslavia and Poland. Bilateral agreements pursuant to this provision of law have enabled the U.S. to extend MFN treatment on a conditional basis to Hungary

and Romania.

--

Romania and Yugoslavia are eligible, under U.S. law, for the benefits of the Generalized System of Preferences (GSP). Hungary is now eligible to be designated for such treatment. Section 502 of the 1974 Trade Act, however, prohibits GSP eligibility for the USSR, GDR, Czechoslovakia, and Poland.

As an interesting legal aside, while U.S. imports from Eastern European countries are frequently subject to antidumping actions, the U.S. Department of Commerce ruled in 1984 that the U.S. countervailing duty law does not apply to NMES

——

because in an NME the existence of a

trade-distorting subsidy is impossible. The particular

decision in this case applied to Poland and Czechoslovakia

and was later extended to the USSR and the GDR.

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FOCUS OF PRESENTATION:

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