I believe that the continued gradual reduction of trade barriers on our part which increasingly opens the gates to imports, reduces our share of our own domestic market, cuts down our industrial production and employment and eventually closes factories should be viewed with the greatest concern.

It is not easy to generalize about these matters and when I say that they are matters of degree in all cases I realize that this does not provide an easy and understandable rule for guidance. At the same time, one can understand the difference between an industry where the rate of imports is 4 or 5 percent of the domestic market and one in which the rate is 20 percent or 30 percent. There are, of course, advocates of free trade who look with complacency upon the closing of industries and assert that adjustment assistance is an adequate remedy for such industrial hari kari.

Some validity might be accorded this theory if it could be applied evenly and with corresponding benefits in imports, but clearly this is not the case. For example, the Japanese who provide our greatest industrial competition have quotas which prevent their importation of our industrial goods while the volume of their products sold in this country has shown a sharply increased volume over recent years. The existence of similar tariffs, quotas and subsidies in nearly every other country in the world raises serious doubts as to the reciprocity of our trade.

We have long felt the effects of the flood of imports in my districtbicycles, clocks and watches, pins, plumbing fittings, rubber footwear, and stainless steel flatware are only a few of the products which have been affected or even eliminated. Because of the stimulation of a war economy many of the effects of the reduction of activity in these fields have not been noticed but with a return to peacetime levels, the loss of business and jobs is beginning to be glaringly apparent.

Two stainless flatware plants in my district have just closed. One large company, Uniroyal, has already closed two footwear plants in Woonsocket, R.I., and Mishawaka, Ind., and threatens to close another in Naugatuck in my district where 3,600 people are presently employed. This decision has been reached in part because of the tremendous upsurge of imports of footwear products produced in competition with these plants. The impact of the loss of this number of jobs in a relatively small community with the accompanying effects upon rentals, mortgage payments and purchases, tax payments and purchases generally can well be imagined. When implemented it is nothing short of a disaster.

To add to the difficulty, the general unemployment rate in this area is now over 7.2 percent.

I opposed the Trade Assistance Act of 1962 because I felt that it would not be administered fairly and subsequent experience has borne out this contention. In my judgment the trading situation increasingly becomes one in which agricultural products and certain limited manufacturing products where the United States has a surplus or a monopoly are favored while the average manufacturer who must pay top wages for his labor and has no better technology than his overseas competitor is allowed to go down the drain.

In addition, experience has shown that resort to the Tariff Commission and the escape clause has proven to be generally unsuccessful.

I opposed the Trade legislation in 1962 and I oppose the Mills bill as well.

Although the latter contains certain improvements, some of which I have advocated such as the liberalization of standard of proof for adjustment assistance, nevertheless I am opposed to the concept which views with equanimity the substitution of adjustment payments for actual jobs and business.

I am opposed to the Mills bill for a more specific reason and that is the inclusion of two industries in the bill for broad and general relief by a roll-back of quota restrictions. This is clearly and blatantly discriminatory.

Why should two industries be singled out for preferential treatment when others equally worthy are neglected?

A cynical observer might conclude that the reason for the provisions was to line up behind the bill the support of Representatives from districts whose industries would be benefited by the inclusion of this relief. I would like to propose an amendment to the bill which would cover industries in my district which I believe to be conspicuously deserving of assistance, but I am sure that these amendments would not be accepted and I will therefore oppose the bill for the reasons indicated.

In the consideration of the Mills bill we should be influenced by employment figures showing that rubber footwear employment fell 5 percent from 1968 to 1969, and more than 8 percent from 1965 to 1969. Meanwhile, the textile industry has experienced a decline of 1 percent since 1968 but an increase of 5 percent since 1965.

The workers in our industries have reached a commendable level of income and also receive fringe benefits which are equally valuable. Labor costs represent in excess of 50 percent of the total cost of rubber footwear production. It is also a high-wage industry, with average earnings as high as $4.50, including fringe benefits. It is manifestly unfair to permit to an unreasonable degree the competition of workers who are paid at most 20 percent of the wages and fringes received by our industrial workers. It has taken a long time to reach this point and their security should not lightly be jeopardized.

In 1968 the percentage of imports to domestic shipments in waterproof footwear was 56.9 percent and the total imports of rubber soled footwear was 32.1 percent of domestic shipments. This competition is far too keen for the health of our economy. I have recommended remedies which would be more equitable to the Nation's industry and for the protection of American workers. I refer specifically to H.R. 15213 which is designed to encourage the growth of trade on a fair and equitable basis by providing American industries with a limit against the adverse effects of an undue rise in imports on industral growth, employment, and profits. This bill would amend the Trade Expansion Act of 1962 by relaxing the criteria for determination of the question of serious injury to domestic industry and would insure the actual availability of a remedy to industries that have suffered or stand to suffer from rising imports.

My other bill in this area, H.R. 11148, is to amend the Trade Expansion Act of 1962 to assist domestic industries in unfair competition from foreign imports. We would accomplish that result by substitut

ing more flexible relief criteria for the rigid criteria now embodied in this act.

I ask the Ways and Means Committee to give serious consideration to these proposals and to weigh the responsibility all of us face in the contemplation of economic disaster resultant from the competition of foreign imports.

This is a matter of great concern to me because of the type of district that I represent. We are very critically affected by the wave of imports that are coming in at the present time. Some of our industries have actually been forced to close their doors for this reason and others are threatened. Some of them are the largest employers in our area.

So because of this I wish to record my opposition to the bill that is proposed. I feel that it is discriminatory and that it deals with only two particular industries rather than to deal with the difficulties that are faced by a whole mass of industries in my district and throughout the country, and I refer to bills that I myself have introduced that I believe deal with this problem.

Thank you very much, Mr. Chairman.

Mr. GIBBONS. We appreciate very much your taking the time to come here and present your views.

Mr. MONAGAN. Thank you, sir.

Mr. GIBBONS. Mr. John A. Buzzard.

Would you identify yourself for the record, sir.

STATEMENT OF JOHN A. BUZZARD, CHAIRMAN, IMPORT-EXPORT ADVISORY COMMITTEE, NATIONAL CONFECTIONERS ASSOCIATION

Mr. BUZZARD. Mr. Chairman, I am John A. Buzzard, president of Inmont Confections, a subsidiary of Inmont Corp., headquartered in New York City. Our candy manufacturing divisions are located in Bridgeport, Pa., and Brooklyn, N.Y. This appearance is entered in my capacity as chairman of the import-export committee of the National Conferences Association which is the national trade association of candy manufacturers and suppliers of goods and services to the industry.

Our association, the National Confectioners Association, has been very interested in and affected by the subject of tariffs and trade for many years and we believe in expanding and furthering international trade on a sound economic basis. We have always recognized, however, that costs of production in the United States cannot be completely ignored in furthering a sound and economic climate for U.S. industry. This is particularly true when some of the higher costs of U.S. production actually are dictated by our own Government.

By this statement I mean that our confectionery industry is required to pay higher prices than our foreign competitors for practically all the agricultural commodities used as ingredients in the manufacture of confectionery because of price-support operations and other programs employed by the Department of Agriculture. Our national labor policy, both concerning minimum wage and labor negotiations, results in labor costs which are above those of foreign manufacturers.

Nevertheless, on June 9, 1970, Secretary Clifford M. Hardin, in his address to the national convention of the National Confectioners Association, stated that from 1960 to 1968, which are the latest figures available, the rise in confectionery prices was at a slower rate than all other consumer prices. The Department of Commerce records show an increase of less than 5 cents a pound between 1960 and 1968. Our industry's record in the fight against inflation had our concern for the American consumer who is our customer should strengthen our position against unfair import competition.

Now it seems that for the past 35 years, under successive trade agreement statutes, industry in the United States has continued to be placed at a competitive disadvantage. Our association was one of those which presented a witness in opposition to the Trade Expansion Act of 1962 which adversely affected many industries.

We forecast that our industry and other industries would suffer from the Trade Expansion Act and that the U.S. balance of trade and balance of payments would do likewise. Many other industries and labor groups which favored the Trade Expansion Act when it was before Congress in 1962 now have seen problems created by that position. Many who supported the Trade Expansion Act are now encouraging a different approach to the problem of the Nation's industry and the Nation in general.

Now we are particularly grateful that the attitude toward our trade policy seems to be different from the attitude expressed in 1962. More members of this committee, including the chairman and other prominent members, recognize that action must to taken in the interest of U.S. industry and the U.S. balance of Trade. It is refreshing that this committee has before it and is considering various legislative proposals, practically all of which, in our view, would constitute a significant improvement over existing law, which suggests that at least we are looking for a solution to our problems.

Now we have studied with interest H.R. 16920 by Chairman Mills, and there is much to be said in favor of this bill because it would proceed immediately to adjust the unfair import competition problem for textiles and shoes. Also it would sensibly modify the escape procedure to be of assistance to other industries.

The administration bill, H.R. 14870, in our opinion is also a good bill in that it would constitute a significant improvement over existing law. It contains no broad and ruthless tariff cutting authority as did the 1962 act, even though there are not many significant tariffs left

to cut.

More importantly, it would also establish a more reasonable escape clause criteria. In effect, it would seem to restore the escape clause as a means of dealing with unfair import competition which the committee knows was almost completely emasculated by the 1962 Trade Expansion Act.

The basic legislation of the fair internation trade bill with provisions added on to it such as are contained in the Mills bill for specific action concerning textiles and shoes would also seem to be a fair and reasonable approach to this problem.

All three of these proposals-Mr. Mills' H.R. 16920, the fair international trade bill, and H.R. 14870-offer legislation that would

assist our industry in competing with the products produced by foreign manufacturers.

Now fundamentally the position of the National Confectioners Association is a belief in hard competition with import duties being imposed only to the extent necessary to equate the higher costs of production in the United States which our manufacturers must pay and over which they have virtually no control. We favor such import duties to equate the costs of production of the most efficient manufacturers but not to protect any company which is not functioning at maximum efficiency. Our thinking is that reasonable import duties would represent a sounder and wiser U.S. policy. Unfortunately, that approach is now essentially precluded because practically all of our tariffs have been negotiated away at international negotiations and in some instances we have bound ourselves against increasing them.

With this tariff approach seemingly out of reach, the next best approach, in our view, is the quota approach and in this connection, again, we specifically recommend the fair international trade bill which has been introduced by approximately 65 Members of Congress. As you are aware, this in effect would permit foreign manufacturers in any industry to share in the growth and prosperity of the United States, but it would not let foreign suppliers continue to exploit the unfair advantage of their lower production costs to take over the U.S. market from efficient U.S. manufacturers.

In the case of the confectionery industry, until 1955 imports of confectionery and chocolate represented a quantity equivalent to less than 1 percent of U.S. production. In 1960, imports were less than 60 million pounds but by 1969 imports had increased to more than 135 million pounds.

When the full effects of the Kennedy round become operative in 1972, confectionery will be dutiable at only 7 percent, except that solid chocolate will be dutiable at only 5 percent. History indicates that imports will continue to increase both quantitatively and as a percentage of U.S. production.

Our higher raw material and production costs, coupled with the downward direction of U.S. import duties on confectionery, accelerate this increase. If action is not taken, confectionery imports, which now represent a quantity approximately equivalent to 4 percent of domestic industry production, quickly can become 10 percent, 20 percent, or more. The fair international trade bill will permit imports to continue to grow, in the case of confectionery as well as other items, but it will place foreign suppliers on notice as to how much the United States is agreeable to letting them use their competitive advantage to penetrate the U.S. market.

In our view, U.S. foreign trade policy for some years has been developed and sold to the United States based on a number of myths. One is that the United States has a favorable balance of trade. This contention is not true. If a correct value is placed on U.S. exportsthat is, if foreign aid and surplus agricultural commodity shipments abroad are excluded-and a true value is placed on imports which requires a landed value rather than a declared foreign value, then the United States has an unfavorable balance of trade.

Another myth is that in international tariff negotiations when the