UNITED STATES CANE, ETC. v. Block, Appeal No. 82-28.

• Citation: 683 F.2d 399
• Decision Date: 14 July 1982
• Docket Number: Appeal No. 82-28.
• Parties: UNITED STATES CANE SUGAR REFINERS' ASSOCIATION, Appellant, v. John R. BLOCK, Secretary of Agriculture, Donald T. Regan, Secretary of the Treasury, William E. Brock, United States Trade Representative, Appellees.
• Court: United States Court of Customs and Patent Appeals

683 F.2d 399

UNITED STATES CANE SUGAR REFINERS' ASSOCIATION, Appellant, v. John R. BLOCK, Secretary of Agriculture, Donald T. Regan, Secretary of the Treasury, William E. Brock, United States Trade Representative, Appellees.

Appeal No. 82-28.

United States Court of Customs and Patent Appeals.

July 14, 1982.

Daniel F. Mayers, Daniel Marcus and William F. Marmon, Jr., of Washington, D. C., for appellant.

David M. Cohen and James R. Walczak of Washington, D. C., for appellees.

Before MARKEY, Chief Judge, and RICH, MILLER, NIES and SMITH,^* Judges.

MARKEY, Chief Judge.

Appeal from a grant of summary judgment upholding the validity of Presidential Proclamation 4941, by which quotas were imposed on importation of sugar. We affirm.

BACKGROUND

On May 5, 1982, the President issued Proclamation 4941. On May 11, 1982, the United States Cane Sugar Refiners' Association (Association) filed an action challenging its validity. On June 5, 1982, Judge Bernard Newman of the Court of International Trade granted the government's motion for summary judgment.¹ Recognizing the same need for expeditious resolution observed by Judge Newman, this court heard oral argument in special session on June 30, 1982.

Proclamation 4941

Proclamation 4941 limits entry (or withdrawal from warehouse for consumption) of sugar to 220,000 short tons, raw value, between May 11, 1982 and June 30, 1982, and thereafter to amounts set by the Secretary of Agriculture. As authority for its promulgation, the President cited section 201 of the Trade Expansion Act of 1962 (Act), in conformity with Headnote 2, Subpart A, part 10, schedule 1, of the Tariff Schedules of the United States (TSUS), and the International Sugar Agreement, 1977, Implementation Act (P.L. 96-236, 94 Stat. 336) (ISA).²

Under § 201(a) of the Act (19 U.S.C. § 1821(a)),³ the President may proclaim such additional import restrictions as he may deem appropriate to carry out a trade agreement entered pursuant to section 201 between June 30, 1962 and July 1, 1967. The Proclamation cites, as such trade agreement, the Geneva (1967) Protocol of the General Agreement on Tariffs and Trade (GATT). The quota on sugar was stated to be in conformity with Headnote 2 of subpart A of part 10 of schedule 1 of TSUS, which had been added by Presidential Proclamation 3822 to the TSUS to reflect Note 1 of the Geneva Protocol.⁴

The President set forth in the Proclamation his finding that the quotas proclaimed were appropriate to carry out the trade agreement just described and the ISA, and "to give due consideration to the interests in the United States sugar market of domestic producers and materially affected contracting parties to the GATT."

Statement by the President

In a May 5, 1982 press release, entitled "Statement by the President," the President: described his action as proclaiming "an emergency import quota program to manage sugar imports"; referred to the action as "necessary to defend the domestic sugar support program mandated by Congress last year"; cited a cost to the government of "up to $400 million" in sugar purchases if massive imports were not prevented; reported a precipitate drop in the world sugar price to less than 9 cents a pound and the consequent inability to further defend the support program with duties and fees alone under Section 22 of the Agricultural Adjustment Act of 1933; explained the apportionment of quotas among exporting countries and the quarterly adjustment of the total quota by the Secretary; stated that "the objective is to defend the domestic support program" and avoid forfeiture of domestically produced sugar to the government, while providing foreign supplies "reasonable access to a stable, higher priced U.S. market"; and expressed solicitude for Carribean Basin countries and the Carribean Basin Initiative.

ISSUE

The dispositive issue is whether the President acted within his delegated authority in issuing Proclamation 4941.⁵

OPINION

Section 201(a) specifically authorizes the President to impose those fees and quotas on imported sugar he deems appropriate "to carry out ... any trade agreement" entered pursuant to Section 201 between June 30, 1962 and July 1, 1967. Hence Association, if it is to meet its challenger's burden, must establish that the authority on which Proclamation 4941 is premised, is not "such" a trade agreement. It is necessary in this case to tour the labyrinthine wonderland of trade agreements, TSUS provisions, presidential proclamations, and congressional enactments concerned with importation. Having done so, we conclude that the Geneva Protocol is a trade agreement under § 201 and that Note 1 is a part thereof.

During the 1949 GATT negotiations in Annecy, the United States reduced the most favored nation rate of duty on sugar and agreed that the concession there entered would be effective while Title II of the Sugar Act of 1948 or equivalent legislation was in effect.⁶

In the 1951 GATT negotiations in Torquay, this proviso was added:

Provided, That, if the President of the United States finds that a particular rate not lower than the rate specified above, limited by a particular quota, may be established for any product provided for in this item, which will give due consideration to the interests in the United States sugar market of domestic producers and materially affected contracting parties, he shall proclaim such rate and such quota limitation, to be effective not later than the 90th day following the termination of the effectiveness of such legislation: Provided further, That any rate and quota limitation so established shall be modified if the President finds and proclaims that such modification is required or appropriate to give effect to the above considerations: And provided further, That the provisions of this item preceding this note shall resume full effectiveness, subject to the provisions of this note, if legislation substantially equivalent to Title II of the Sugar Act of 1948 should subsequently become effective.⁷

The Geneva Protocol is dated June 30, 1967, and is thus within the agreement entry period specified in § 201(a). It was entered as part of the "Kennedy Round" of GATT negotiations, and contained a sugar importation provision substantially identical with the Torquay proviso and designated NOTE 1, Unit A, Chapter 10, Part I, Schedule XX; 19 U.S.T., Part II, 1281. To reflect the Protocol, the language of Note 1 was added, virtually verbatim, to the TSUS by Proclamation 3822 on December 16, 1967 (82 Stat. 1455), as Headnote 2. The full text of Headnote 2, a part of which is quoted in Proclamation 4941, supra, footnote 4 is:

1. The concessions provided for in prior schedules XX in respect of articles provided for in items 155.20 and 155.30 in this unit shall be effective only during such time as title II of the Sugar Act of 1948 or substantially equivalent legislation is in effect in the United States, whether or not the quotas, or any of them, authorized by such legislation, are being applied or are suspended: Provided,

(i) That, if the President of the United States finds that a particular rate not lower than the rate specified in such concessions, limited by a particular quota, may be established for any product provided for in such concessions, which will give due consideration to the interests in the United States sugar market of domestic producers and materially affected contracting parties, he shall proclaim such rate and such quota limitation, to be effective not later than the 90th day following the termination of the effectiveness of such legislation;

(ii) That any rate and quota limitation so established shall be modified if the President finds and proclaims that such modification is required or appropriate to give effect to the above considerations; and

(iii) That the provisions of such concessions shall resume full effectiveness, subject to the provisions of this note, if legislation substantially equivalent to title II of the Sugar Act of 1948 should subsequently become effective. Footnote omitted.

The Sugar Act of 1948 expired in 1974.⁸ Within the 90-day period specified in Headnote 2, the President proclaimed a duty and quota on sugar by Proclamation 4334 of November 16, 1974.⁹ There have since been nine modifications to that duty and quota.

Thus, beginning at least as early as 1951, duties and quotas on sugar have been part and parcel of negotiations made part of our domestic law by presidential proclamation. Indeed, the very language of the Torquay proviso, "if the President ... finds ... limited by a particular quota ... will give due consideration to ... domestic producers and ... contracting parties ... he shall proclaim such rate and quota," is traceable without substantial change into Note 1 of the Geneva Protocol and into Headnote 2. The language of Headnote 2 quoted in Proclamation 4941 includes an authorization to modify existing quotas. Whether the President's action here at issue be viewed as the imposition of a new quota or as a modification of a quota in existence since at least 1974, it cannot be gainsaid that the President was acting within the authority delegated to him in § 201 of the Trade Expansion Act of 1962 when, in conformity with Headnote 2, he issued Proclamation 4941 to carry out the trade agreement embodied in the Geneva Protocol of the Kennedy Round, of which Note 1 as reflected in Headnote 2 is an integral part.¹⁰

Association, pointing to the "Statement of the President" contemporaneous with Proclamation 4941, argues strenuously that the President's "real purpose" in issuing the challenged proclamation was to avoid government expenditures under the sugar price support program, and that the only authority for employing import restrictions to achieve that purpose is Section 22 of the Agriculture Adjustment Act of 1933, an authority already exhausted by imposition of duties under that section. The argument need not detain us long.

The President's action...