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dictionary definition this agreement is a course, we dig into those things and re- port, the last paragraph thereof, which cartel.

port to the House what we find out, sure, reads: Mr. BRADEMAS. Mr. Chairman, if with our recommendations; but the

As a condition to the agreement, the Cathe gentleman will yield further, I also House should be able to exercise its own nadian Government obtained commitments want to comment on the observation judgment in these areas. There are from the automobile and parts manufacturwhich the gentleman made with respect many areas of judgment exercised in this ers to increase the value of their production to the role of the auto workers in this bill where the House could act under a

in Canada by a total of $241 million over the matter. proper rule for debate which permitied the reduction in duty by Canada can only be

next 3 years. The agreement provides that Having worked at the Studebaker plant amendments. I do not mean the entire enjoyed by those companies which have comduring my summers while in college, I tariff schedule should be opened for mitted themselves to the increase in Canahappen to be a member of the United amendment under a rule; I would not ad- dian production. Therefore, this bill does Auto Workers, Studebaker Local 5, at vocate that, but a proper rule could be not result in the freeing of trade. On the South Bend, Ind. Today I represent adopted to permit the House to exercise contrary, it is more restrictive than the Camany UAW members, and I wish I had its judgment on these other aspects of nadian rebate scheme which the agreement the honor of representing many more of the bill.

replaced. them but, unfortunately, the Studebaker I wish to call attention to one other And the gentleman signed that. plant at South Bend shut down and went important feature in the bill, and it was Mr. CURTIS. Yes, and I agree with to Canada. The United Auto Workers, one of the big issues raised in the com- that statement. however, is an international organization, mittee. Under the administration pro

Mr. ICHORD. I would like to ask the with members in both the United States posal the Tariff Commission was com- gentleman how that is to work. Does and Canada. But I am a Representa- pletely read out of this so far as deter- that mean if there is a parts manufactive in the U.S. Congress, not the mining whether or not damage had turer in the United States who also has Canadian Parliament, and I have a deep occurred to employer and employees. a factory in Canada and he refuses to concern about the jobs of auto workers Apparently the administration contem- increase his Canadian production that whom we represent in this country. I do plated a new executive bureau was going the parts that might go into Canada not represent a single Canadian auto to be set up in place of the Tariff Com- from his U.S. plant would not be granted worker

mission. I am happy to say that the the reduction in duty ? Mr. CURTIS. I thank the gentleman. Tariff Commission and the machinery

Mr. CURTIS. I do not think that apLet me say how serious this problem is. with which we are all familiar has been plies. But I want to be corrected. I Let me go to the statement of the Secre- restored in the bill and will operate in do not think that applies to the parts tary of Commerce when he is quoted in this program if it ever comes to be dealers. I think it only applies to the the committee report. Incidentally, the needed.

automobile companies themselves. I quote appears on page 16 of the report. One other substantial point. The might relate that to what the real probPerhaps he did not actually say it, be- committee report says on page 16, sec- lem is. cause here is the way the report reads: tion b, "effect on balance of trade.", We have been assured by the Secretary of states that it will not adversely affect it. up of many component parts. The basic

Of course, every automobile is made Commerce that the independent parts in- Well, now, that is not accurate, The

manufacturer manufactures only a cerdustry will not be adversely affected and, in preliminary statement is accurate. The fact, "should also benefit from this pro- Secretary of Commerce, in analyzing the it will actually buy elsewhere. Now Can

tain percentage and a certain percentage gram" agreement, said:

ada is saying that of the total autoAnd so on and so forth. But I say this: The effect on these provisions will be to mobile—and actually the figure is about We spent quite a bit of time on title III maintain and in fact increase the level of

60 percent- she would want to see 60 which is “Tariff Adjustment and Other Canadian production. However, I do not Adjustment Assistance.” This is what expect that our own exports to Canada will percent of that manufactured in Canada

either through the manufacturing procwe are going to do with respect to some drop as a result.

ess of the automobile company itself or people who are damaged, essentially the The conclusion in the committee re- through Canadian parts companies that employees of independent parts industry. port is, therefore, it is not going to hurt have contracts with the automobile inIf no one was to be hurt what is the pur- our balance of payments.

dustry. Under this, it is in effect saypose of title III?

Let me point out that all of the argu- ing—if you do not agree to increase the The CHAIRMAN. The time of the ments of the administration are to the amount of Canadian parts or manufacgentleman from Missouri has expired. effect that they are counting on increased tures that goes into the final production Mr. BYRNES of Wisconsin. of Wisconsin. Mr. exports to

to solve our international of automobiles that meets these figures, Chairman, I yield the gentleman 5 addi- balance-of-payments problem. Where

then this agreement does not affect it. tional minutes.

would be the increased exports here? Am I correct; may I ask the chairman Mr. CURTIS. The United Auto Work- This simply says that exports will not about whether this would apply? Am I ers were pretty good, I believe, toward drop. In other words, without this correct in saying that this would not apgetting recompense for their people who agreement and under a proper arrange- ply to the parts company itself but just would be damaged. But I do not quite ment our exports would be increased, not to the automobile company? see how in title III we are going to be just stand still. One of the reasons the

Mr. MILLS. The gentleman is emiable to do very much for the independent treaty is entered into is to help Canada nently correct. parts worker who is not an auto worker. in her international balance of payments.

Mr. STUBBLEFIELD. Mr. Chairman, For instance, he might be an employee of You cannot have it both ways. If we will the gentleman yield? a company selling glass to a contractor are helping Canada's balance of pay

Mr. CURTIS. I yield to the gentlewho in turn will sell headlights to the ments, we are not going to be helping

man. auto companies. I refer to the sub- ourselves. The ultimate goal might be

Mr. STUBBLEFIELD. Under this bill subcontractors, and their employees. beneficial, and the chairman has pointThey will be hurt and there will be little ed out if this will produce a more effi- the Canadian Government could reduce recompense for them.

cient automotive industry in North their import duties to zero; is that corIncidentally, here is one reason, in my America, Canada, and the United States rect—but only to qualified Canadian

manufacturers ? judgment, this matter should not be con- in the long run will increase their prosidered under a closed rule. Title III duction and their exports, I presume, of Mr. CURTIS. No; to the automobile contains matter wherein the Ways and automobile parts. So this will be split

So this will be split- companies that qualify. But all of them Means Committee indulged in a number ting up a bigger pie.

have qualified under these agreements. of substantive judgments. I think we

Mr. ICHORD. Mr. Chairman, will Mr. STUBBLEFIELD. They are qualmade pretty sound judgments, but I the gentleman yield?

ified if their production is kept at the frankly want to submit those kinds of Mr. CURTIS. I yield to the gentle. 1964 level. judgments with the reasons therefor for man from Missouri.

Mr. CURTIS. In essence, it is about the consideration of the House. I do not Mr. ICHORD. I direct the attention 60 percent. think it works well for us to assume these of the gentleman to the separate views Mr. STUBBLEFIELD. Just about responsibilities as a committee. Of of the Republicans on page 56 of the re- half.

Mr. CURTIS. It may be freezing it Steel is very much in argument today, Mr. BRADEMAS. If the gentleman

. at that point. Of course, the projec- as to whether there will be a strike. Al- will allow me to do so, I will read just tions are that the overall industry pro- though supplies have been laid up ahead

though supplies have been laid up ahead two sentences from a statement made duction will increase which would of time, this seems a vital thing at a time on the 15th of July 1965 by the Honorbenefit both Canada and the United we are asked to agree to a cartel arrange

we are asked to agree to a cartel arrange- able Michael Blumenthal, the deputy States. ment such as this.

special representative for trade negotiaMr. STUBBLEFIELD. Would not the Mr. CURTIS. The answer, I regret to tions of our Government, in an address $240 million production figure tend to say, is that these people are not taken

say, is that these people are not taken he delivered in Germany. He said: preclude any importation of American care of, except insofar as they can make All of the major industrialized countries products into Canada for the next 3 their deals with the big three auto com- are under pressures of various sorts or have years?

panies. The auto companies have it in been tempted at one time or another to deMr. CURTIS. No, I do not think so. their power to make up whatever pack

their power to make up whatever pack- part from MFN (most favored nation). We At least according to the testimony and age they want to on the 60 percent to be

age they want to on the 60 percent to be must resist this temptation. We must be this is on all sides—they do anticipate manufactured in Canada. This is the particularly careful not to vitiate the MFN growth. There is a growth factor. The danger. This amounts again to govern

principle in our search for expedient solu

tions to immediate problems. thing is—we will not participate to the ment by men and not government by same percentage in this increase of that law.

Would the gentleman from Missouri new market.

No, there is no protection against this agree with me that this legislation does Mr. STUBBLEFIELD. That is the kind of thing, except, as I say—and this fly in the face of the kind of declaration point I am making. They would not is a form of protection-as they can of principle by a representative of our participate until this $240 million figure make deals with the big auto companies. Government that I have just read? was exceeded in sales and production; is Mr. HALL. This first vitally affected Mr. CURTIS. Yes. And we are in that right?

these bridle manufacturers at the time the process of diagnosing schizophrenia Mr. CURTIS. That is correct.

we lost the Studebaker plant to Canada. in the administration. Mr. STUBBLEFIELD. I thank the I will not go into the merits of whether Mr. BRADEMAS. I thank the gengentleman.

that was good, bad, or indifferent; but tleman. Mr. CURTIS. In essence, and I want they objected violently to the situation

Mr. CURTIS. Mr. Chairman, the legto reiterate, I will vote for this bill be- in which they were placed at that time. islation (H.R. 9042) implementing the cause of Canadian-American relations I believe these bridle manufacturers did

Canada-United States Automotive Prodand because of what we would be con- not supply the Studebaker organization

ucts Agreement has many flaws. Though fronted with if we go backward. I am the line into Canada. They do have an assembly line after they moved across

in a sense it can be considered a creative reluctantly voting for this. Again I am

They do have and bold solution to a problem which trying to make a record so that the other contracts.

seemed difficult at best to resolve, its

As the gentleman says, if they cannot faults should make us seriously question administration will get back on the track of our basic trade policies and protect themselves with the big three, can its advisability.

they in fact protect themselves across the trade theories.

Briefly stated, the root cause of the line in Canada? We have to stop this process, this busi

Automotive Products Agreement is the ness of bilateral agreements and indus- tainly zeroing in on this problem.

Mr. CURTIS. The gentleman is cer- provision in section 303 of the Tariff try by industry agreements which can

Act of 1930, which allows for the auto

Let me say another thing. I have been only bring us back to the thirties and the

matic imposition of countervailing days of the Smoot-Hawley Tariff. This

talking negatively. There is the other

There is the other duties on imports to the United States is why we moved to the multilateral reading the administration presentation. side of the coin. That can be gotten by

which have been the subject of subsidy and most favored nation concept of trad

or bounty. ing with trade across the board and not administration people when they came in

If this were the beginning, as I told the

AN IMPERFECT SOLUTION TO A REAL PROBLEM industry by industry, product by product. to see me, of really a free United States

In this case, the Canadian GovernIf we ever start doing it on an industry Canada trade area, and it were across the

ment had subsidized by a complex tariff by industry, product by product, or na- board—including paper, lumber, and all rebate scheme, the export of Canadian tion by nation basis, this is just going to sorts of things—it would seem to me

sorts of things—it would seem to me auto parts to the United States. A U.S. end, I regret to say, in a fiasco.

there might be some justification and it parts maker complained that this subMr. HALL. Mr. Chairman, will the might be put in accord with GATT.

sidization of exports was in violation of gentleman yield?

However, when it is done on a limited section 303 of the 1930 Tariff Act. ReMr. CURTIS. I yield to the gentle- basis, with only one industry, important luctant to impose the countervailing man.

as that industry is, the situation is differ- duty authorized by this act, the U.S. Mr. HALL. I have a specific question ent.

Government argued that any U.S. rebased on a maker of electrical cables, or I believe it is a true statement in the

taliation against the Canadian duty bridles, as they are called, for the car majority report, to talk about the would result in

would result in Canadian counterindustry.

“pluses” when they refer to the impor- retaliation, and thus a Canada-United I believe this is one of the principal tance of this agreement to the auto- States trade war. subcontractors or suppliers to many of motive industry. This honestly is a

That is, almost beyond question, a the assembly line car producers before “plus” for our big auto companies. But specious argument. The long history of the final product rolls out for retail con- I believe that in the long run the United Canada-United States relations shows sumption. They use great amounts of States benefits from the fact that we that even the hottest disputes can be steel. They use great amounts of cop- have thousands of little industries, small

solved in normal ways. I do not think per. They manufacture these assemblies businesses, and so forth. To put them it at all unlikely that the dispute about and they simply have to be put in place to any extent in this kind of straitjacket the Canadian scheme to encourage auto hooked up to the ignition, the spark plugs of a political agreement-a treaty-I be- parts exports could have been settled and the dashboard and off they go. lieve is unwise.

without resort to this truly extraordinary These people have complained bitterly Mr. BRADEMAS. Mr. Chairman, will and troublesome trading arrangement. about the original agreement and the the gentleman yield?

U.S. officials give themselves too little effect it has had on them as subsuppli- Mr. CURTIS. I yield to the gentle- credit in claiming that this device was ers, both under the variable tariff agree- man from Indiana.

the way to resolve the rebate plan ment Canada first imposed and subse- Mr. BRADEMAS. I have listened dilemma. quently.

again with great interest to what the For the sake of perspective, however, I wonder if the gentleman could an- gentleman had to say. I hope I repre- I want to state that the Canada-United swer the question as to whether this has sent his attitude correctly when I say he States agreement is forward looking in been taken care of in the final bill, (a) suggests that this legislation and this that it has tried to take account of and from the point of view of the bridle sup- agreement move in the direction of bilat- satisfy one of Canada's oldest and most pliers for the assembly lines, and (b), eralism and away from multilateralism important economic problems: How to what effect it will have on the steel pro- in international trade.

achieve an economic automotive indusducers and copper producers?

Mr. CURTIS. That is correct.

try. U.S. officials could, nonetheless,

have taken an even bolder and more grievances of the developing countries. when it comes to a departure from the most enlightened approach to the problems Our position at UNCTAD should not be favored nation clause when it is a question of Canadian industry. They need not one of defending an old trade order, but of accommodating a U.S. policy. have discriminated against all other rather one of developing sound economic Then Mr. Wyndham-White comUnited States and Canadian industries principles which are rooted in basic U.S. mented: by giving special treatment to automo- trade policy, to help the developing na

Precedents are dangerous things to estabbiles. They could have incorporated the tions, and most importantly to insure that lish. Perhaps that was one of the thoughts automotive products agreement into a all help is based on sound international that was moving through the back of my larger plan to gradually create true free trade theory. Thus, we have opposed mind when I advised that there are other trade between Canada and the United many of the unrealistic restrictive, and ways of dealing with this problem. States. They could have taken this op- costly proposals of the UNCTAD.

NEED FOR FULL CONSIDERATION portunity to schedule movement toward When viewed in this light the agree- I have announced my intention to vote a true free trade area using the auto- ment creating special trading arrange for this bill, but only with hesitation. I motive agreement as a beachhead for the ments for a single industry exclusive to would only ask that we consider thoreffort.

Canada and the United States takes on oughly the international trade implicaThe views of the Republican members an invidious hue. It is a preferential tions of the bill during our discussions of of the Ways and Means Committee, sub- agreement. It gives the developing it. mitted independently in the committee countries grounds to ask us to sanction Mr. MILLS. Mr. Chairman, I yield report on this bill, very well explain our special arrangements in their favor. 15 minutes to the distinguished gentleobjections to it.


woman from Michigan (Mrs. GRIFFITHS). INTERNATIONAL TRADE POLICY IMPLICATIONS It is quite clear that the Canada

Mrs. GRIFFITHS. Mr. Chairman, I I would like to focus here, however, on United States agreement will have seri- would like to say to the gentleman who an aspect of the bill which is very im- ous and harmful implications that will preceded me that there are two kinds of portant to me as one of the four con- make our dealings with developing coun- cartels—those trade agreements which gressional members of the U.S. delega- tries more difficult. Apart from this con- benefit us are good cartels and those tion for trade negotiations. This is the sideration, however, is the problem of trade agreements which benefit others group, headed by Governor Herter, the obtaining

obtaining approval for the

for the Canada- can be bad cartels, the latter are usually President's Special Representative for United States agreement under the terms of European origin. Trade Negotiations, which is responsible of the GATT.

I would like to say immediately, while for conducting trade negotiations under The fact is that the Canada United it is true that this is a bilateral trade the General Agreement on Tariffs and States agreement is not in accord with agreement and not multilateral, applyTrade (GATT). It is in relation to the the fair trade principles of the GATT. ing to all countries, this is a good policy U.S. commitment to trade expansion and The United States will have to obtain a in this case, just as the Coal and Steel our deep involvement in the effort to waiver from our fellow GATT partic- Community of Europe was good policy find sound ways to help less-developed ipants in order to remain in good stand- or the European Economic Community countries grow that the Canada-United ing. This is a procedure frequently in- was good policy for them. We should States agreement and this legislation can dertaken by other countries in the past, not deprive ourselves of this opportunity be most fundamentally criticized.

and the United States has given its ap- to extend our own trading partners, parThe United States has since the be- proval to these waivers for others. Thus, ticularly in this case where 90 percent of ginning of the reciprocal trade expan- it is reasonable to expect that we in turn all the Canadian automobile plants are sion effort in 1934 championed the cause will receive a waiver. But we may be owned by U.S. companies and they are of fairer or freer trade on a multilateral, paying a high price.

only a few miles apart. Economically it reciprocal, nondiscriminatory basis. We The expectation we will receive a should be one industry. I feel that the have led the effort to end special, bi- waiver is supported by the fact that the State Department is really to be conlateral trade pacts. We have opposed Canada-United States agreement has the gratulated on their treaty. the creation of spheres of trading influ- backing of Mr. Eric Wyndham-White, I would like to say further it would ence in which one developed country the respected Director General of GATT. have been exceedingly difficult for the establishes preferential trade and pay- In negotiating this agreement the United President to have come to Congress and ments ties with weaker, less-developed States sought and obtained Mr. Wynd- said this, this, and this is what I will countries We have accepted the forma- ham-White's advice and somewhat re- agree to and nothing else and then ask tion of common market and free trade luctant approval.

our permission to make that agreement. area arrangements with hesitation on At a press conference in the United I think the President did it in the only grounds of their overriding political im- States on April 29, this year, Mr. Wynd- way he could; he had a right to do it that portance and with assurances that they ham-White said:

way. You do not advise in advance what would be outwardlooking in their trad- The implementation of the agreement by

you will settle for. ing relationships. We have opposed the the United States would involve at least a Now, having said something nice about special barter-trade devices used by the technical departure from the most favored the State Department, which I really Soviet Union and other Communist na- nation clause in the sense that it would pro- feel is going a long way, I am glad that tions to tie less-developed countries to vide for free entry for Canada whilst it would they negotiated the Canadian auto tariff them through trade.

maintain the duty for automobiles from agreement. I think it is forwardlooking

other sources of supply. I say technical be- and shows understanding of the probWORLD TRADE AND THE DEVELOPING COUNTRIES cause as I understand the case, as presented lems of Canada and of industry, but it

But the most recent, and in many ways recently by the United States in the GATT, the most convincing, proposals that

this departure would not in fact, owing to goes further than that, Mr. Chairman. would jeopardize the principles of world

the special circumstances of the trade, have It also shows that the State Department, trade we have established are the pro- practices of other parties to the GATT. any practical trade effects on the exporting when pressed, can even try a new method

for solving an old problem; and protecposals of the United Nations Conference on Trade and Development (UNCTAD).

Then Mr. Wyndham-White questioned

tion, Mr. Chairman, is an old, old probAbout 80 less-developed countries the Canada-United States agreement veloped or developing, views with con

lem. Every country, whether fully debrought about the 1964 United Nations from the point of view of the U.S. trade sternation the importation of any large Conference on Trade and Development.

principles I have cited above, and in quantity of foreign goods but regards as Many of the recommendations of this light of our bargaining position vis-a-vis its rightful due the exportation of its conference run counter both to tradithe developing countries. He said:

own goods. tional trade policies espoused by the Coming at a time when the whole question

The remedies against the imports are United States and to what we believe is of preferences and the most favored nation numerous, and most of them have been sound economic principle. U.S. officials

clause is very much debated, it is bound to have—both during UNCTAD and since accused the United States of a very great nation. Thus Canada tried the duty re

be used as an argument by those who have at one time or another tried by every in meetings at New York and in

rigidity when it comes to the preferences mission plan on auto parts. Some have Geneva-defended U.S. policy while try- which other people are interested in, com- suggested that our answer should have ing to seek remedies for the legitimate pared with perhaps a certain relaxed attitude

pared with perhaps a certain relaxed attitude been countervailing duties and an appeal to GATT or, in the final analysis, the its passage a new prosperity will come to Mr. Chairman, my principal objection increase of tariffs against Canada's tariffs against Canada's North America. .

to this bill is the financial adjustment products. Each of these remedies is old;

Mr. KEOGH. Mr. Chairman, will the assistance provision. I believe the baland each of these remedies diminishes us gentlelady yield?

ance of the bill is proper and that it and Canada. We, who grew to economic

Mrs. GRIFFITHS. I yield to the gen- should be passed.

should be passed. But if we are giving greatness because of our vast free trade tleman from New York.

a $50 million windfall to General Motors, area, which gave us access to raw ma

Mr. KEOGH. Mr. Chairman, permit to Chrysler, to Ford and to American terials without tariff duties and custom

me to compliment the gentlelady on her Motors, and if this is so valuable to them, ers who paid no tariff duties-certainly

typically excellent statement. But we I feel they should stand the financial adwe realize that at this late point in the

who are privileged to serve on the com- justment assistance for any displace20th century we as the leading Nation mittee with her know that excellent

with her know that excellent ment of workers of the automotive indusof the world, cannot say to our closest

statements from her are the rule and not try. I do not feel that it should be paid neighbor and one of our best customers, the exception.

for out of the U.S. Treasury. That is “Give us complete access to your market

And, Mr. Chairman, meaning not in what we are doing today, we are giving a on our terms or you cannot sell us any

any way to deprecate the force of her $50 million windfall to these great corthing.”

statement, I would like here to say that porations and then we are asking the On the other hand, Canada had a choice of many of the remedies than this

I share completely her views on the im- taxpayers to pick up the tab for the dis

portance of this agreement, and the im- placement of workers in this industry. agreement. She could have made this . portance of the enactment of this bill;

Moreover, Mr. Chairman, the bill itself same deal with the European Common

and this, in my opinion, will blaze, i is not, as I said, a free trade agreement. Market. And certainly it is not too much to point out that most of the automotive hope, a trail for further agreements of If you are an automotive parts dealer this precise type.

in Canada, you cannot import parts from plants in the Common Market are owned

Mrs. GRIFFITHS. I thank the gentle- if you are one of these four giant auto

America without paying a tariff, but only by the same people who own our own

man very much. plants. She could have made this deal

Mr. Chairman, I would like to answer dealing in auto parts in the United States

mobile dealers. And, if you are a person by setting up her own industry, as Brazil

one further criticism. There is no pro- you cannot import from Canada parts and Mexico have gone. She could have

vision whatever in this agreement relat- without paying the regular tariff. This simply put the tariffs so high on us that

ing to the maintenance of 60 percent, or benefit is designed only for the preferred we could not have sold to her.

any other level of Canadian production four big corporations. So, we are passAnd it is not enough to say that Can

for increases in auto sales over 1964. The ing preferential legislation to help four ada would not have put up with it. Canada would have put up with it before

Canadian companies have given the of our biggest corporations in America.

Canadian Government undertakings to We are giving them a windfall. We say, she starved.

increase their future Canadian value This agreement goes a long way to

Canadian value "If you upset our American labor marward making one automobile market of

added in this way. However, the failure ket, then the American taxpayer will pick Canada and the United States. Why of any company to do so will not affect

up the tab.” shouldn't Canada, as a great national the removal of tariffs because that is

Again, Mr. Chairman, I say if it is power, share in that

market? Whether brought about by the agreement, not by valuable enough to these corporations to the result of the agreement is to lower the letters of undertaking.

have this legislation, then they should the price of cars—which I hope it will


of Wisconsin. Mr. agree to pick up the tab for the displaced do-to the total market, or raise the

Chairman, I yield 5 minutes to the gen- labor. wages of the workers—and I point out tleman from California [Mr. UTT).

This legislation is a poverty program it is one union—the result should be a

Mr. UTT. Mr. Chairman, I rise in in reverse. greatly expanded market for the items

opposition to the bill. I am not only go- In connection with the adjustment asthat go into the composition of a car,

ing to talk against the bill but I happen sistance section, those that are affected as well as other items.

to be one of those who is going to vote will get unemployment compensation, In other words, a trade war with against it also.

which is approximately 26 weeks to 52 Canada, suggested by the timid, makes

Mr. Chairman, I realize that my re- weeks.

weeks. They also have a labor contract us poorer, too; while the increased pros

marks probably will not influence many which gives them additional unemployperity of Canada increases our prosper

votes, but I would like to say I am in ment compensation, and on top of that ity. The intent of this agreement is to

favor of free trade between Canada and they can come to the Federal Governhelp Canada and ourselves. I congratu

the United States. I believe it would be ment for additional compensation. This late the State Department. I hope this

good for both countries. But, of course, could result in the payment of $400 or agreement works so well that our great

this is not a free trade bill. It is a spe- $500 a week to some of the workers who and good neighbor, Mexico, chooses to

cial preference to four of our biggest are displaced. There is no regulation on join in the same agreement.

corporations. What you will be voting how this money shall be paid out for But I would go further. I trust that

for this afternoon will represent a $50 assistance. Under the Trade AdjustCentral and South America also find that

million windfall for the four biggest cor- ment Act of 1963 we set up a very strict such arrangements are beneficial and porations in America. If you want to do criteria under which anyone could get that they, too, can be joined in an ever- it, it is all right. But I can recall the assistance, but under this section they increasing trade area; and that thus with days when Charlie Wilson made the make application and if the administraa new method the New World can answer

statement that "What is good for Gen- tion decides they are entitled to it they the European Economic Community.

eral Motors is good for the United will be paid. The criteria is not strict Now, before anyone says further that States.” The Democrats laughed him enough to work, and we could end up by we are losing business, I would like to re- out of office and he had to resign as Sec- paying millions of dollars a year in fiport that in the first 5 months of 1965 retary of Defense.

nancial adjustments which should be the United States had a trade surplus of

Mr. Chairman, the Democrats have paid by Ford, Chrysler, General Motors, $310.2 million in automotive products. taken that slogan and they say that what and American Motors. For that reason This compared with the first 5 months of is good for the four big automobile com- I will offer a straight motion to recom1964 of $278.8 million.

panies is good for the United States. mit. In cars we had a surplus of $29.8 mil

That is known as the "trickle down" Mr. MILLS. Mr. Chairman, I yield 3 lion as opposed to $10.8 million for 1964. theory. I have always supported the minutes to the gentleman from Indiana

In trucks and buses, the U.S. surplus “trickle down” theory, believing that if [Mr. BRADEMAS). was $9.6 million, as compared with $8.1 you give the benefit at the top, eventu- Mr. BRADEMAS. Mr. Chairman, I million for the same period of 1964. In ally it gets down to the little man and it rise in opposition to H.R. 9042, the Autoparts the U.S. surplus was $270.8 million is enjoyed by all.

motive Products Trade Act of 1965. as opposed to $257.9 million for the same Mr. Chairman, I hope that my oppo- As the distinguished chairman of the period of 1964.

nent next year will recognize the fact great Committee on Ways and Means Mr. Chairman, I support this bill and that his party has now adopted the [Mr. MILLS] said a few minutes ago, the I urge its passage. I believe that with “trickle down” theory.

agreement authorized by this bill may result in—and I believe I quote him cor- our Government's stated policy of liberal trade and their existence raises serious antirectly—“some dislocation here and multilateral trade relations based on

trust implications. there.” That is what bothers me about the most-favored-nation principle. All

3. The underlying formal agreement which the bill—nobody has said just "where" GATT countries have the right to be

H.R. 9042 purports to ratify is a bilateral the "here and there" are.

agreement whose benefits are not extended accorded the same treatment as Canada.

to products of non-Canadian origin. I have yet to be convinced that the But this bilateral agreement undermines

agreement constitutes an administration results of this United States-Canadian GATT and the most-favored-nation proposal to return to the long-since disagreement will not be injurious to Amer- principle by substituting an expedient credited policy of limited, conditional biican automobile parts manufacturers scheme for a reasoned, fair solution. It

lateralism. whose plants are located exclusively in seems to me this agreement represents

The record made to date on this bill is the United States. The very fact that

totally devoid of any reason why the Cona repudiation of our Government's this bill makes provision for adjustment fundamental principles of trade policy.

gress should now scrap our long-standing

policy of unconditional, most-favored-nation assistance is an indication of an expecta- I, therefore, urge congressional dis

trade pacts. Indeed, the most recent admintion that some American workers might approval of H.R. 9042.

istration pronouncements about the need for lose their jobs.

Mr. Chairman, I ask unanimous con

our adhering firmly to this fundamental Scarcely one week after this agreement sent to include following my remarks

principle fly in the face of the United Stateswas signed by President Johnson and the text of a letter sent yesterday to all

Canadian auto pact. The Honorable W. Canadian Prime Minister Pearson the Members of the House opposing passage sentative for Trade Negotiations, just a few

Michael Blumenthal, Deputy Special RepreModine Manufacturing Co., which has a

of this bill and signed by the gentlemen weeks ago said: plant in La Porte, Ind., in my congres- from

from Kentucky (Mr. STUBBLEFIELD], "All the major industrialized countries are sional district, announced that it might from Illinois (Mr. MCCLORY], from Vir- under pressures of various sorts, or have establish a plant in Canada in order to ginia (Mr. MARSH], from Wisconsin (Mr. been tempted

at one time or another, to deprotect its share of the automobile radi- STALBAUM], and myself.

part from MFN (most favored nation) in ator market and that it was investigating

this or that area. We must resist this temp


tation. We must be particularly careful not

In December 1964, I am advised, as a

to vitiate the MFN principle in our search Washington, D.C., August 30, 1965.

for expedient solutions to immediate probdirect result of the Canadian duty re- DEAR COLLEAGUES: We are writing to pre- lems." Address to Dusseldorf Chamber of mission scheme then in effect, the pro- sent for your consideration our reasons for Commerce and Industry, Dusseldorf, Gerduction of automobile radiators at the opposing H.R. 9042—the Automotive Prod

many, July 15, 1965. McCord Corp. plant in Plymouth, Ind., ucts Trade Act of 1965—scheduled for con

Since Mr. Blumenthal's statement reprein my congressional district, was trans

sideration by the House tomorrow, Tuesday, sents current U.S. policy on discriminatory ferred to the McCord plant in OrangeAugust 31.

trade pacts, how can one reconcile the United ville, Ontario. Approximately 65 people ment a “trade agreement” between the overriding principle of U.S. trade policy?

H.R. 9042 purports to ratify and imple- States-Canadian pact with this fundamental, lost their jobs.

United States and Canada on automotive 4. In the present 89th Congress, over 100 The distinguished chairman of the products. But the underlying pact to which Members of the House have sponsored or inCommittee on Ways and Means (Mr. H.R. 9042 relates is not a trade agreement troduced legislation to amend the U.S. antiMILLS] has just admitted that our Gov- at all. The United States will give away dumping statute. Regardless of one's posiernment might well have invoked coun- part of its market in automotive products tion on the subject of dumping and the adetervailing duty orders to offset the Cana

to Canada and get nothing in return. What quacy of present U.S. law thereon, he must dian duty remission scheme, but such

the bill would really ratify and implement be concerned with any legislative proposal

are private, cartel-like agreements between which would condone and excuse the sale of orders were never issued by our Govern

the Canadian affiliates of U.S. auto com- foreign merchandise in the United States at ment. Instead, we got this agreement. panies and the Canadian Government. In prices below those charged in the home marAnd, as I have said, after this agreement other words, enactment of this bill would ket. The passage of H.R. 9042 would do this was signed, the Modine Manufacturing constitute the approval by Congress of a very thing. Co. continued to warn of the possi- give-away to Canada of an important seg. We understand that the Ford Motor Co. of ble loss of American jobs. Possibly 500

ment of the U.S. market in auto products Canada, relying on the passage of this bill

and a congressional sanction of the operation by Congress, began, last March, to sell 400 jobs are at stake in La Porte, Ind., alone.

of in effect a North American cartel in the Canadian-made cars per month to the United An important question about this auto products field.

States. These cars, which are being maragreement, which still lacks an adequate

Our principal objections to the passage keted in upstate New York, have been, and answer, is: “To what extent will this of this bill are:

are being, sold at U.S. prices. The U.S. prices agreement result in exporting United 1. The United States has undertaken, in being charged are substantially below the States automobile parts manufacturing the so-called trade agreement with Canada Canadian prices for the same cars. In other firms and the jobs of American workers to grant duty-free treatment to motor vehi- words, the Canadian cars are being sold in they employ to Canada?”

cles and original equipment parts imported the New York market at less than their fair I am one of those who believe that our

by anyone from Canada. Canada in return value, at dumping prices.

has undertaken nothing. Canada promises We are also informed that Chrysler of CanNation's No. 1 economic problem is un- to give duty-free status to automotive prod- ada, beginning with the 1966 model year, will employment. I am particularly sensitive ucts imports only if they are imported by ship some 80,000 Canadian-made Chrysler about unemployment in my own con- qualified Canadian vehicle producers. But cars to the United States and sell them at gressional district because it was only a qualified Canadian producer is one who U.S. prices. This means that in a few weeks, 20 months ago that the Studebaker Corp.

has entered into a private agreement with some 7,500 Canadian-made cars will be closed the gates of its automobile plant the Canadian Government pursuant to dumped every month on the U.S. market,

, in South Bend, Ind., leaving over 7,000 dian production and sales at their highest which he undertakes to maintain his Cana- just by two suppliers.

Regardless of one's views on what U.S. workers jobless. Ironically, or perhaps historic level and guarantees a fixed, in- antidumping policy should be, he cannot fail not so ironically, Studebaker moved its creased annual amount of Canadian produc- to be alarmed when asked to approve legislaautomobile manufacturing to Canada. tion (for export to the United States) in tion which will condone beforehand a poten

During my years in Congress I have years to come. In short, duty-free treat- tially large scale dumping operation. Nor is consistently supported free trade legis- ment on imports into Canada will only be his concern lessened because such dumping lation and the general relaxation of extended to those who guarantee that is supported by the U.S. auto producers. tariff barriers. I will continue to do so. Canada's share of the home Canadian mar- Other American industries which stand to be

hurt by this practice, and other American But this agreement should not be mis- ket for automotive products remains intact and that the Canadian share of the U.S.

workers whose jobs are threatened, do not taken by anyone as a free trade agree

market will increase. Thus, the agreement ment. Only certain Canadian manufac

approve of such dumping. is completely one-sided in favor of Canada

If the Canadian and the U.S. Government turers, including the subsidiaries of to the detriment of U.S. companies and

desire to effect a trade agreement under American automobile manufacturers, are

which all automotive parts and all comtheir workers. eligible for duty-free imports, and then

pleted vehicles might be sold tariff free in

2. The private agreements between the only if they agree to increase their pro

the other country, this would be a step quite auto companies and the Canadian Governduction and to abide by other Canadian

different from that involved in H.R. 9042. ment, part of which are documented in the Indeed, negotiations looking toward the Government guidelines.

Ways and Means Committee Report on H.R. establishment of a North American Free Furthermore, I question how this bi- 9042, are agreements to restrain trade. Such Trade Community would appear to be conlateral agreement can be reconciled with agreements are the very antithesis of liberal sistent with our national policy. However,

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