Machine tool trade with Japan and Taiwan

The President has directed that the US Trade Representative negotiate a limited extension of the voluntary restraint agreements (VRAs) with Japan and Taiwan on machine tools. These VRAs were negotiated in 1986 for national security reasons and were scheduled to expire on December 31, 1991.

Import restrictions on machining centers, computer-controlled lathes, computer-controlled punching and shearing machine tools, and computer-controlled milling machine tools will be removed progressively over a 2-year period beginning in January 1992.

To allow sufficient time for negotiations with concerned countries over the phase-out schedule, we are requesting that Japan and Taiwan extend the existing VRA restrictions on machining centers, computer-controlled lathes, computer-controlled punching and shearing machine tools, and computer controlled milling machine tools, scheduled to expire on December 31, 1991, for an additional 30 days.

VRA restrictions on non-computer controlled lathes, non-computer controlled punching and shearing machine tools, and non-computer controlled milling machine tools will expire as scheduled on December 31, 1991. The President also has directed that the following steps be taken to assist the US machine tool industry's ongoing efforts to regain international competitiveness.

* The Secretary of Commerce, as chairman of the cabinet-level Trade Promotion Coordinating Committee, will give special focus to ways to promote machine tools exports.

* US export control regulations will be reviewed to ensure that restrictions on machine tools are kept to the minimum consistent with national security.

* The Secretaries of Defense, Commerce, and Labor will designate officials at the Assistant Secretary level to work together to monitor the industry's performance and to consult regularly with industry representatives.

* The Secretary of Labor will help the machine tool industry improve technical training, human resource management, and the utilization of new and emerging technologies.

* The Secretaries of Commerce and Energy will examine which research and development efforts in the national laboratories could benefit the domestic machine tool industry and will recommend appropriate investment and technology transfer to realize such benefit.

* The Secretaries of Commerce and Defense will continue to implement the Domestic Action Plan of programs to support the revitalization of the US machine tool industry. Key elements of the Domestic Action Plan are as follows:

-- Support for the National Center for Manufacturing Sciences (amounting to $50 million during fiscal years 1988-91); and

-- Support by the Defense Department's Manufacturing Technology (MANTECH) research and development program. More than $33 million has been spent for research on machine tools and related technologies over the past 3 years. Funding for related technologies is estimated at $82 million over the FY 1991-95 period.

* The Secretary of Commerce will continue efforts under the US-Japan Cooperation Plan, which was begun in May 1990 to help promot