"Provisions of Section 22 of the Agricultural Adjustment Act and of the Trade Expansion Act of 1962 should be promptly invoked when necessary to protect domestic producers or industries against undue import competition. Procedures for adjustment assistance under the provisions of the Trade Expansion Act should be liberalized to provide for more effective and prompt relief. We are greatly concerned over the restrictiveness of interpretation of Congressional intent in this regard, and the negligible benefits which have been available in efforts made to date to otbain such assistance. "United States legislation pertaining to international trade negotiations or arrangements should include: 1. Reaffirmation of the "peril-point" principle, with such determination to be made by the Tariff Commission, and mandatory requirements that the Executive Branch be accountable to Congress for exceptions made in perilpoint proceedings. 2. Liberalization of "escape clause" provisions of the Trade Expansion Act of 1962, with emphasis on strengthening of procedures for prompt review and action to protect domestic producers and industries against abrupt or critical damages from imports. 3. Specific recognition that the producers of any agricultural product used in the manufacture of a commodity involved in peril-point or escape clause proceedings shall be considered part of the domestic industry producing that commodity, and any organization or group of such producers shall be considered to be interested parties in such proceedings." We strongly support the major objectives of the Administration trade bill, (H.R. 14870) to facilitate and liberalize the assistance available to import damaged firms, workers and industries, and to enlarge the Presidential trade negotiating authority, particularly with respect to reduction of nontariff barriers. Establishment of international institutional machinery for continuous review and negotiation of non-tariff barrier issues and other trade problems should have the highest priority in our trade policy deliberations. Trade in agricultural products is among that most affected by internal policies as well as other non-tariff "distortions", and a continuous strong effort will be needed by all nations to develop an effective international negotiating forum for the harmonization of policies which are central to national sovereignty. H.R. 14870 represent a most important step in that direction. We also believe that strengthening of the Office of the Special Trade Representative, through greater executive and legislative support for its key role in trade policy coordination and negotiation, is vital to U.S. success in international trade negotiations. Conflicting views of the various government agencies can otherwise greatly weaken our negotiating effectiveness. The Chief Trade Negotiator is in the best position to guide our efforts to achieve fair and reciprocal concessions which duly take into account economic interests of all trading groups as well as political considerations involved. The damage done by subsidies and other such trade distorting export practices, not only to U.S. farmers, cooperatives and our national interests, but to the long range prospects for world trade expansion and world political stability, deserves much attention. Programs of adjustment assistance proposed in H.R. 14870 will help greatly in some situations where imports cause overly abrupt or serious dislocations. In addition, some provision should be made to speed up and make more effective other measures such as U.S. countervailing duties to offset subsidized products from abroad. Export subsidies have been a serious and continuing problem for farm commodity interests, and administrative relief has often been too limited and slow. This has been a contributory factor in the growing demands for import quota or other U.S. retaliatory action in recent years. The National Council has worked closely with other farm groups in recent months to express our concern over current trade situations which have hurt or threatened U.S. agricultural interests. We are alarmed at the lack of more rapid progress in effectively negotiating to reduce trade distortions caused by such critical issues as the variable levy principle applied to many agricultural imports of the European Economic Community and in resolving the touchy U.S. textile import problem. While we believe that removal of the American Selling Price system for applying tariffs to certain U.S. chemical imports would be helpful in important respects in future negotiations with the EEC, we urge that our trade negotiations capitalize on the fact that Europe's own variable levy barriers against U.S. farm exports is far more sweeping and inequitable than is ASP. The attached letter sent by the National Council and several other organizations expresses these views widely shared among U.S. farm and agribusiness interests most deeply involved in international trade. Our overriding concern is that the EEC's variable levy principle, which represents a flagrant and unfair departure from the trade expansionist goals of the General Agreement on Tariffs & Trade, be subject to negotiation, or, above all, not be extended further to Great Britain or otherwise. In summary, the National Council views the need for continuance of longstanding U.S. trade expansionist policy as the most important consideration in these hearings. Trade problems from inequities and trade distortions caused by export subsidies and unfair barriers such as the EEC's variable levy system should be given top priority, and international institutions such as GATT should be improved, strengthened and organized on a more "permanently in session" basis to negotiate multilateral solutions wherever possible. As more efficient international negotiating procedures and forums are developed, and more effective and fair means are developed for international enforcement of agreements, the need for disruptive and risky unilateral actions should be lessened and world trade can continue to grow in a more orderly fashion. Our Special Trade Representative should have more authority for developing and coordinating our foreign trade policy, and more strength and responsibility for conducting negotiations on an aggressive, reciprocal basis. This offers our best hope for developing the more clear-cut, cohesive and balanced national trade policy which we need. Agricultural interests should be viewed as an integral part of all our major international negotiations sinec they are vital, both economically and politically, throughout the industrial as well as in the developing areas of the world. Special import problems such as those resulting from the use of undue export subsidies or other devices prohibited by GATT, or by shipments into the U.S. of products which are below standards of quality or sanitation designed to protect U.S. consumers should be given special consideration. We support, too, the principle of reciprocity as provided for under GATT for resolving these special import problems. We urge this Committee to give the most careful consideration, however, to the risks involved in establishment of unilateral import quotas to solve importinduced difficulties of many industries whose deeper problems may prove to be those of excessive inflation, obsolescence, or other inefficiencies. Before taking the dangerous risks of initiating restrictions which might lead to widespread retaliation and a possible reversal of world trade expansion, every avenue of investigation to establish conclusive proof of injury and desirability of government assistance should be taken in appropriate cases while all possible efforts to negotiate a solution are being taken. We applaud the recognition of the value of this approach in the Administration's current recommendations opposing import quotas on shoes pending Tariff Commission study, and encouraging government assistance as an interim measure. We strongly support this technique, which would be further encouraged by Title III of H.R. 14870. We strongly endorse the efforts toward negotiating reduction of non-tariff barriers to trade, under Title IV of H.R. 14870. Along with other major farm and agribusiness trading interests, we deplore the particularly sweeping and unfair NTB of the European Economic Community, the variable levy system which not only acts as a complete barrier to certain farm imports, but in turn causes the U.S. and U.S. farmers to finance export subsidies which are used to ship European farm products to this country. We thank the Committee for the opportunity to present our views and commend you for your thorough efforts to develop a sound legislative program to further our trade and thereby some of our most crucial foreign affairs interests. NATIONAL COUNCIL OF FARMER COOPERATIVES, The PRESIDENT, The White House, Washington, D.C. DEAR MR. PRESIDENT: We strongly support your objective of expanded world trade, in the interest of U.S. economic and political goals and as a crucial element in world economic development and political stability. Administration efforts to broaden trade through expanded market development and through efforts to reduce trade barriers are highly commendable. We endorse the major aims of the Administration trade bill to give substantial Presidential negotiating authority toward removal of non-tariff barriers to trade and to give further government assistance to industries damaged by imports. We are increasingly concerned, however, with major threats to your trade expansionist, outward-looking foreign policy stance. Non-tariff trade barriers of the European Economic Community which are inconsistent with the concept of trade liberalization and violative of the General Agreement on Tariffs and Trade threaten to be further expanded because of the possible entry of the United Kingdom into the EEC. The failure of the Kennedy Round negotiations to deal effectively with the most notorious and damaging of these NTB's, the EEC's variable import levy system, has been a source of continuing frustration to broad C.S. agricultural interests which have consistently supported a trade expansionist position. Major U.S. farm markets in Europe have already suffered severe losses because of the variable levy system, which in effect is a means of charging the U.S. and U.S. farmers for high support farm programs without production restraints. U.S. agricultural groups understand that European political unity may be desirable, but the maintenance of such non-tariff trade barriers against U.S. agricultural products is not essential to achieving that unity. We also believe that Europeans should now assume a much larger share of the burdens of unity. We believe it is urgent that variable levies be the subject of prompt negotiation with a view to seeking a modification and eventual elimination of such levies before a decision is reached on the question of UK entry into the EEC. The extension of the variable levy system to the UK and other areas would sharply reduce U.S. farm exports, hurt the U.S. balance of payments position and lend support to those who seek a more protectionist trade policy by the United States. We strongly support your continuing efforts to resolve the complex textile trade issue through negotiated restraints on imports which may be unduly troublesome to our domestic textile industry. We fear that unless your efforts are successful in achieving a voluntary arrangement which is in the best interest of the U.S., Japan and the world trading community, unilateral Congressional import restraints by the U.S. might trigger a series of trade confrontations and additional foreign import restrictions which could seriously threaten the goal of world trade expansion. We believe that a foreign economic trade policy which is aimed at expanding mutual trade in accordance with the principle of sound economics and on a reciprocal basis is essential to the welfare of American agriculture and to our national economy. We also agree that there are burdens as well as benefits which must be shared in the process of liberalizing world trade. The United States has been a leader in the policy of limiting trade restriction measures primarily to instances where serious injury or threatened injury is established. The variable levy system of the EEC, however, was unilaterally established contrary to the principles of the GATT and without any showing or claim of injury. Such a system is regressive and should not be extended to other areas. Unless it is modified, it will not only continue to be a source of friction but it will ultimately force the United States, as well as other nations, to shift away from an expansionist trade policy position and adopt similar restrictive measures. Any further trade restrictionist moves such as extension of the variable levy system to an enlarged EEC will lead to destructive trade conflict between regional blocs. Because we believe a worldwide climate for trade expansion is so essential to American agriculture and to our nation, the undersigned respectfully request the opportunity to meet with you to discuss these matters. Sincerely yours, National Council of Farmer Cooperatives, Washington, D.C., Kenneth ation, Washington, D.C., Milan D. Smith, Executive Vice President; National Corn Growers Association, Boone, Iowa, Walter W. Goeppinger, President; National Federation of Grain Cooperatives, Washington, D.C., R. K. Bauer, President; U.S.-National Fruit Export Council, Santa Clara, California, D. F. McMillen, President. Mr. WATTS. The committee will stand adjourned until 10 o'clock tomorrow morning. (Whereupon, at 3:10 p.m., the committee adjourned, to reconvene at 10 a.m., Wednesday, June 17, 1970.) |