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granting congressional approval of limited wages and where the people are paying

wages and where the people are paying istration as a great step forward in trade private agreements as contemplated by H.R. less taxes per capita into the Govern- negotiations. The facts do not support 9042 appears to us to be quite inconsistent ment for defense and other necessary these claims. All you need do is look to with such a policy.

governmental We urge your careful consideration of these

operations can live to- the committee report on this bill under views when you decide on how you will vote gether in the same room. There cannot the section entitled "Benefits of the on H.R. 9042.

be. You talk about Canada and I heard Agreement” on page 6. This might betRespectfully yours,

the gentlewoman for whom I have a ter be addressed to the Canadian ParliaROBERT MCCLORY,

great deal of respect say that she wanted ment for justification for its action. JOHN BRADEMAS,

to see Central America and Latin Amer- Canada got everything she wanted, the LYNN E. STALBAUM,

ica come under this particular proviso. United States got nothing, and, incidenJOHN O. MARSH, FRANK A. STUBBLEFIELD.

Let me tell you, if you want to go to tally, the automobile manufacturers will

Peru where workers are paid 12 cents save $50 million a year in Canadian Mr. KEOGH. Mr. Chairman, I yield an hour to produce cars to ship into the duties and much larger amount 3 minutes to the gentleman from Penn- United States, I am sure that Ford, Gen- through integration of Canadian and sylvania (Mr. DENT).

eral Motors, and Chrysler would be happy United States production of automobiles Mr. DENT. Mr. Chairman, 3 minutes to make a deal. I would predict that and parts. will not allow very much time to explain within 1 year after the signing of that There should be no misunderstanding the background of this legislation. It is agreement, the countries producing auto- about the facts in this case. Canada sufficient to state there be no free trade mobiles for export into the United States wanted to increase the value of its autobetween unlike economies. Your com- would demand the application of the motive production. The Government mittee of which I am a member has favored nation clause as provided in the of Canada adopted a duty rebate scheme been debating in its hearings the ques. Trade Agreement Act so that that par- which was designed to bring about that tion of the $1.75 minimum wage, the ticular country could receive the same result. This scheme ran afoul of section double time for overtime, and other deal.

303 of the Tariff Act of 1930, because it agreements and covenants that cover That is why you are here today—you constituted a subsidization of exports. American production. Your committee are here for a trade policy agreement

are here for a trade policy agreement Faced with a complaint by an American as a rule has voted for the $1.75 mini- because Fiat, Simca, Volkswagon, Opal

because Fiat, Simca, Volkswagon, Opal- parts manufacturer, retaliatory action mum wage.

all four car manufacturers, in the main by our Government against Canada was Now they say this is not going to be controlled by American manufacturers imminent. The administration took the injurious because they write into the or owners of corporations overseas, are position that such action would be exbill, as the gentleman from Indiana has demanding under the Trade Agreements tremely harmful to our trade relations already shown, certain kinds of relief Act passed in 1962 the invocation of the

with Canada. Other means were sought for workers or for an industry that is favored nation clause. From now on, in order to achieve the same result, that injured by this particular proviso which believe me, when you pass this today, you is to increase Canadian production. This allows free trade, on which the gentle will have opened up the favored-nation is what the United States-Canadian man and I disagree, between the two na- proviso which would allow all cars to automotive agreement is designed to actions, not only on automobile parts but come into the United States from any complish. on automobiles. Because at this mo- country—and incidentally 1 out of every The United States-Canadian automoment, as I stand on this floor, over 2,000 13 automobiles being sold in the United tive agreement-when coupled with the Ford cars are being imported into the States today is an imported car and over collateral commitments which must be United States of America and have been 550,000 cars a year will be imported if

550,000 cars a year will be imported if given to the Government of Canada by imported into this country since the first they keep on coming in at the rate they any company seeking to avail itself of 30 days after the signing of the agree- have been coming into this country. the right to import U.S. automotive ment between the Canadian and Amer- Mr. BYRNES of Wisconsin. Mr. Chair- products duty-free into Canada ican Governments.

man, I yield such time as he may require guarantees to Canada precisely the It is perfectly all right to say that we to the gentleman from Virginia [Mr. result that Canada sought to achieve are doing this because we believe it is BROYHILL).

through other means, namely, to ingoing to help Canada. That is perfectly Mr. BROYHILL of

of Virginia. Mr. crease the value of automotive producall right. But I have not heard in the Chairman, we are faced with an accom

tion in Canada over and beyond the nor15 years that I have been studying trade plished fact. By executive proclamation, mal growth in Canadian demand. Our relations and trade problems as they af- as of January 18, 1965 the duty on auto- negotiators reached an agreement with fect all nations, where any Canadian motive products between the United . Canada—and avoided a showdown-by Parliament has yet met to pass one States and Canada were reduced to zero. giving Canada precisely what she piece of legislation that would in any The President did not have the authority

The President did not have the authority wanted. I do not call this negotiating. way aid the United States. Because to do this. The bill will grant this au- On its face, the agreement would apCanada still has in effect one particular thority to the President. Meanwhile, pear to liberalize trade.

pear to liberalize trade. All duties on import tariff rule that has never been however, the automotive industry has automotive products were eliminated. wiped out and the committee has never proceeded on the assumption that all However, a manufacturer exporting to suggested that it would be wiped out and automobiles and parts shipped between Canada is not entitled to duty-free treatthat, to put it simply, is this—that any the United States and Canada are free ment unless that manufacturer has first time a manufacturer or a group of of duty. As I view the situation, the entered into a collateral undertaking manufacturers in Canada can produce Congress has no practical alternative ex- with the Government of Canada to in10 percent of the parts volume required cept to enact this bill. I wish that it crease Canadian automotive production for consumption in Canada, then tariffs were otherwise. I will vote for this bill by a specified dollar amount. For all automatically go up in order to protect with great reluctance, and I am certain practical purposes, a parts manufacthe manufacturer in that country.

that many other Members of this body turer who does not presently have faciliNow the word "protectionism" is not share my views.

ties in Canada will be foreclosed from a bad word or a bad name. Every per- We have before us today another ex- the Canadian market unless the autoson here tries to protect not only his ample where the executive branch-and mobile manufacturer wishes to purchase home and his homeland but tries to pro- particularly our representatives from the the parts and act as importer. Thus, intect his industry and his job. If you did State Department—have entered into

State Department—have entered into stead of liberalizing trade, the effect is not do that, you would not run for office. negotiations, not with the thought of to restrict trade to a select few who have Just let somebody run against you, and negotiating, but in order to achieve a entered into the required undertakings you run on a platform where you are result sought by the other party to those with the Government of Canada. Your not trying to protect the homes and the negotiations. With this attitude, no one constituent and my constituent cannot jobs and the industry of your workers should be surprised that our negotiators

should be surprised that our negotiators export to Canada without the payment and see what would happen. always come out second best.

of the old duty. There is no place where the people The United States-Canadian automo- I do not know how this can help the of a community or country having an tive agreement, which makes necessary economy of the United States, because economy that allows them to pay less this legislation, was hailed by the admin- through separate undertakings made

CXI- -1412

with the Canadian Government, the au- Trade Agreement.

Trade Agreement. My district is vitally of new cars rose from 5.4 million in 1961 tomobile manufacturers guarantee that affected by this agreement. In Oakland to about 8.5 million vehicles in the model Canada will not lose anything. In fact, County, Mich., and particularly in the year just ended—a 57-percent rise. By they guarantee that by the model year eastern portion of the county which com- the 1969 model year, according to con1968 Canada will benefit to the tune of prises my district, and in Wayne County servative estimates, U.S. auto production additional production of $241 million which adjoins us to the south where many is expected to rise to at least 11 million annually over and beyond the growth of of my constituents work, there is the automobiles—a further rise of 25 percent the Canadian market.

largest concentration of manufacturing over the very large plateau reached this Who gains as a result of this agree- plants for automobiles, trucks, and their year. ment? The Government of Canada is constituent subassemblies and parts of To sustain this growth, all of the autoassured of the production gains which any area of similar size in the world. mobile companies are making unpreceit sought to achieve through the duty To make plain to the Members of this dented commitments for capital expendirebate scheme. The latter might not body the tremendous interest of my con- tures in the United States—to say nothhave worked. The value of automotive stituents in this bill, I call attention to ing of their commitments for investment production in Canada must necessarily the fact that in 1960, of the 154,000 per- abroad. The four major producers tobe increased by $241 million over the sons in my district in the civilian labor gether will spend about $5 billion for new next 3 years. From the standpoint of force, 59,000—or 38 percent-were em- plants and equipment in the United the Canadian Government, all risk has ployed in manufacturing establishments. States during the next 3 years. been eliminated by the result of this The largest number of these were em- With the powerful thrust provided by agreement.

ployed in the production of automobiles, this surge in investment and output, emThe major automobile manufacturers, trucks, and automotive parts.

ployment in the motor vehicle and equipand perhaps one or two major parts man- In Oakland County in the first quarter ment industry has been soaring. In June ufacturers with Canadian plants, will of 1962, there were 30,000 workers em- of 1961 the industry had an average of also stand to gain. These manufacturers ployed by the motor vehicles and parts 657,000 employees.

657,000 employees. By June of 1964 this save more than $50 million annually in industry, and 108,000 in Wayne County. had grown to 782,000 employees. Now, Canadian duties. In addition, these Together these two counties in 1962 ac- a year later in June 1965—the latest manfacturers can concentrate the pro- counted for more than half of the em- month for which the data are available duction of certain items in Canada in ployment in motor vehicle and parts employment in the motor vehicles and order to make up the required dollar plants in the entire State of Michigan. equipment industry stood at 893,000 value in Canadian output. Other items In the Greater Detroit area in 1963, workers—a whopping 236,000 new jobs can be made in the United States and there were 204,000 persons employed in having been created in the four-year shipped to Canada free of duty. This is the production of motor vehicles and period. described as a “rationalization” of the parts out of a total employment in these The rate of increase in employment in automotive industry.

industries in the entire State of 338,000. this industry has averaged 8 percent per I am told that one of the first results In the entire United States in 1963, there year for the past 4 years. will be that the Canadian automotive were 745,000 persons employed in the An industry that can make this kind plants, presently operating well below ca- motor vehicles and equipment indus- of contribution to the U.S. economy compacity, will be brought up to full capacity. tries-s0 Michigan alone accounted for mands our respect. It is doing its part What cannot be sold in Canada will be 45 percent of the Nation's employment to make America strong and her people shipped to the United States. The auto- in these basic industries; and Oakland prosperous. When Lynn Townsend, the motive industry will save many millions and Wayne Counties, where my constitu- president of Chrysler, stated as he did in production costs. The small inde- ents live and earn their living, accounted in Boston last week—August 18—that the pendent parts manufacturer and the for about one-third of the State's total. next 10 years have all of the potential American auto worker will suffer the loss. To illustrate the sheer economic im- to be the "golden age” of the automobile

Our negotiators made a disadvan- pact of motor vehicle manufacturing in industry, he was eniphasizing the point tageous deal. The Congress is stuck with my district, and State, it is only neces- that the brilliant performance of the init. Once the agreement was executed sary for me to point out that the weekly dustry in the recent past will be overand the Presidential proclamation issued payroll of this industry in the State in shadowed by the vigor of its activity in reducing to zero the duty on automotive 1963 was $45 million—and it is even more the years ahead. I am inclined to beparts, there was no possibility of retrac- today.

lieve him. ing our steps in this negotiation. In rec

Of course, the legislation must be eval- The growth in auto production and ognition of this, I am reconciled to voting uated not solely in terms of the local sales which has so richly benefited the for this bill. I do it with great reluctance. interest in Michigan, but also that of the U.S. economy can also be a source of

I would also like to add a note of cau- Nation as a whole. But the importance greater strength for our neighbor to tion to our negotiators at Geneva in the of the motor vehicle and parts industry the north, Canada. The motor vehicle so-called Kennedy round of trade nego- to the Nation as a whole is no less dra- industry there, because of a market less tiations authorized by the Trade Expan- matic than its vital role in Michigan. than one-tenth the size of the U.S. marsion Act of 1962. I hope that they will be According to the Census of Manufac- ket, is markedly less efficient than the prepared to "negotiate” with all that the tures, the motor vehicles and parts in- U.S. industry. term implies, including the risk of failure dustry had shipments valued at $37 bil- Moreover, the presence of an industry to agree. It takes no great skill to give lion in 1963. In producing these vehicles ten times its size on its border has comin to the demands of other parties in a and parts, the industry purchased ma- pelled the Canadian automobile indusnegotiation. If the United States-Cana- terials and services from others worth try in its own self-interest to ask its dian automotive agreement is sympto- $2412 billion and paid out more than $5 Government to maintain relatively high matic of our posture in trade negotia- billion in wages and salaries. An addi- tariffs on motor vehicles and parts. Betions—and it certainly is an example of tional $700 million was spent for capital cause large-scale economies are impossiwhat we have been doing in the past-I improvements. So the motor vehicle and ble in the plants of the four major auto am greatly concerned over what will be parts industry contributed nearly $70 bil- companies producing motor vehicles in forthcoming from the negotiations at lion in these various ways to the national Canada, each plant, being required to Geneva.

income in 1963. This combined activity produce a broad range of different models Mr. BYRNES of Wisconsin. Mr. was equal to 14 percent of the total na- and styles, really carries forward autoChairman, I yield 7 minutes to the gen- tional income that year.

mobile output on a semicustom basis. tleman from Michigan [Mr. BROOM - The health and vigor of the auto- Further, it is necessary for the Canadian FIELD).

mobile industry is obviously of the fore- plants to import a large volume of parts, Mr. BROOMFIELD. Mr. Chairman, I most importance to the Nation. Aus- subassemblies, and stampings for use in wish to add my unqualified support for piciously, motor vehicle sales are on a their production operations. Motor the bill implementing the Canadian- sharply rising trend-giving extra zing vehicle parts are subject to duties rangUnited States Automotive Products to the whole economy. U.S. production ing up to 25 percent.

As a result, Canadian consumers pay automobile prices anticipated by the end jobs, depending upon whether the rate an average of 17 percent more for their of the transition period, 1968. Increased of increase is 6 or 8 percent per year. As new cars than U.S. consumers, and the consumer disposable income in Canada I have pointed out, employment has inCanadian nation has a balance-of-pay- will be spent in large part on the purchase creased at the average rate of 8 percent ments deficit in motor vehicle trade with of goods made in the United States. per year for the past 4 years. Forty-five the United States of a half a billion dol- Here is where my State and district percent of this increased employment lars a year. In 1964, Canada's total def- will gain an additional benefit from the will take place in Michigan. So my icit with the United States was $123 implementation of the automotive agree- State will benefit directly by some 74,000 billion, so the motor vehicle trade ac- ment. Let me put this just as graphi- to 96,000 new jobs in motor vehicle and counted for nearly one-third of this total cally as possible, Mr. Speaker. In my parts production.

In my parts production. At least a third of deficit.

district there is substantial activity in these new jobs will either be located in Without any sacrifice of U.S. interests, established manufacturing plants in the my district, in Oakland County, or in the genius of the Canadian-United States following industries, in addition to trans- Wayne County where many of my conAutomotive Products Agreement is that portation equipment: food and kindred stituents normally seek employment. it strips away the trade barriers that products; apparel; lumber and wood This job-producing aspect of the have compartmented the industry on products; furniture and fixtures; paper agreement necessarily commands my inboth sides of the border and permits an and allied products; printing and pub- terest. The people of my district, my efficient integration of the two into one lishing; chemicals and allied products; State, and of the Nation have so much North American industry. Obviously, petroleum and coal products; rubber and to gain from the implementation of this the geographical orientation of this in- plastics; stone, clay, and glass products; Canadian-United States Automotive dustry will be predetermined by the cap- primary metal and fabricated metal Agreement that I must give it my wholeital investment already in place in both products; machinery, both electrical and hearted support. countries, and the nearness of existing nonelectrical; and instruments and re- Mr. Chairman, the situation may be plants to the preponderant population lated products,

summarized as follows: centers to be served. The United States, In 1964, there were exported to Canada The President of the United States has therefore, has nothing to fear from the through the customs district of Michi- pledged the word of this Nation to agreement.

gan--principally Detroit—the following Canada through the execution of the It would be economically illogical for values of goods produced by these

by these agreement. any significant shift in plants, facilities, industries:

The best brains in the executive deor jobs to take place because of the im- Transportation equipment-plementation of the agreement. Rather, Machinery, except electrical

$485, 679, 630 partments of the Government have en

392, 855, 311 thusiastically endorsed this agreement the Canadian plants can now become Food and kindred products- 143, 322, 676

and its benefits to the United States. efficient producers in their markets by Electrical machinery------- 97,411, 695

The responsible officials of the major being able to concentrate on the mass Chemicals and allied prodproduction of a relatively few models,

ucts--

91, 518, 239 motor vehicle producing companies in thus achieving economies of scale, lower Stone, clay, and glass prodPrimary metal products.--- 68, 808, 362 the United States—the big four-have

enthusiastically voiced their support for production costs, and eventually lower

ucts

36,458, 512

the agreement and this legislation, consumer prices.

Fabricated metal products. The models which will no longer be Printing and publishing--

35, 107, 059 stressing the benefits to this Nation.

33, 723, 406 produced in Canada will be exported Lumber and wood products. 28, 214, 562

The leadership of organized labor in from the U.S. duty free. In a return Petroleum and coal prod

behalf of the auto workers has also indimovement, Canada's surplus production ucts--

16, 334, 200 cated its support of the legislation. of the few models it will now produce Instruments and related

My own analysis convinces me that in volume will be sent into the United Paper and allied products--

products.--

16, 214, 470

the agreement when implemented will States duty free to provide a small part Rubber and plastics ---

15, 868, 577

lead to outstanding economic benefits to

14, 872, 124 of the rapidly increasing supply of all Furniture and fixtures--- 3, 733, 199

the people of the United States as well models of automobiles needed to satisfy Apparel --

718, 681

as those of Canada. the continuing strong U.S. demand.

The negotiation of this agreement was The increased trade in motor vehicles

Total.--

1, 480, 840, 703 entirely in the spirit of the principles for and parts between the United States and

Altogether the manufactured prod- partnership between Canada and the Canada will roughly come into balance ucts exported to Canada through the United States recently enunciated by by the end of the 3-year transition Michigan customs district in 1964 were Ambassadors Livingston T. Merchant of period. The total number of motor ve- valued at $1.4 billion.

the United States and A. D. P. Heeney of hicles and parts moved between the coun- At the average output per worker in

Canada. It is indeed, as they declared, tries will not achieve a balance, of course, these industries in 1963, as derived from in the abiding interest of both countries as Canada will continue after 1968 to census of manufacturers data, these ex

to make practical arrangements to keep have a net deficit in motor vehicle trade ports accounted for roughly 57,000 jobs— the totality of our relationships in good with the United States of about a half and a goodly share of these jobs were in and friendly order, and where trade is billion dollars. Canada will, however, my district.

involved, it is incumbent upon the United gain lower-cost autos and a 3-year Mr. Chairman, a 1-percent rise in the States in particular to be especially alert standstill on the motor vehicle compo- rate of increase in Canada's gross na

to the potential impact on Canada of nent of its trade deficit with the United tional product may not sound impres- U.S. action in the tariff area. Canada States. The United States, on its part, sive, but translated into consumer

is indeed vulnerable to U.S. economic will gain duty-free access to the Cana- disposable income available for the pur- policy. It must in its own interest and dian motor vehicle market for its auto chase of goods in Michigan, it repre- in ours be vigilant in dealing with its parts manufacturers, in addition to sub- sents a potential 25-percent increase. persistent deficit in international paystantial indirect benefits which I shall The Canadian-United States Automo

ments. shortly describe.

tive Products Agreement will contrib- Specifically, the two distingished AmMost important of all, the reduction ute that increased purchasing power to bassadors observed that: in costs and prices in Canada will Canadian consumers and enable them The economies of scale in production and strengthen demand in that country for to step up their very considerable pur- the potential of larger markets justify connew automobiles. Canada's gross na- chases of Michigan products. This, in tinuing efforts on both sides to minimize tional product, which in recent years turn, will produce the increased employ- barriers to trade between the two countries. has been rising at an average rate of 4 ment to which I have referred.

I agree with them that the arrangepercent per year, will increase even more At the same time, by 1968 it is antici- ment achieved by the two Governments rapidly, at the rate of 5 percent per year, pated that employment in the United with respect to automobiles and autoas a result of the increased economic ac- States in motor vehicle and parts plants motive parts is to the mutual advantage tivity stimulated by the reduction in

in will increase by from 165,000 to 214,000 of the two countries in this context.

The action taken here to mitigate the district. Although this particular indus- guished gentleman from New York (Mr. growing erosion of Canada's trading ac- trial facility does not produce automo- MCCARTHY). count with the United States and the tive parts, nevertheless, it seems likely Mr. MCCARTHY. Mr. Chairman, I achievement of a balancing of our mu- that the impact of this agreement on would like to address a question to the tual interest in such a way as both coun- other production facilities which they distinguished chairman of the Committries benefit, as in the case of the auto- operate in this country, could have a tee on Ways and Means. As the chairmotive agreement, is a proud moment slackening of production of related prod

man knows, I represent a district on the in the history of our relationships with ucts brought about by a shifting of pro- Canadian-United States border with a Canada and deserves the support of duction to plants that might be idle or very susbtantial and huge automotive inevery Member of this body.

seriously affected by the Canadian dustry, both parts manufacturers and Mr. Chairman, I cite the following agreement.

assembly plants. I wonder if the distinsources from which I compiled my state- The most serious question is whether guished chairman could indicate what he ment:

this is a free trade agreement, and I would expect the impact of this agree"Canada and the United States

submit to you that it is not for the fol- ment would be on the automotive indusPrinciples for Partnership,” by Living- lowing reasons:

try in a border area such as the Buffalo ston T. Merchant and A. D. P. Heeney,

That Canada imposed certain condi- area. June 28, 1965.

tions on major American producers of Mr. MILLS. Mr. Chairman, will the Bureau of the Census, Department of automobiles which, in effect, relate to gentleman yield? Commerce, "Summary Series: General first, the history of production in Cana- Mr. MCCARTHY. I yield

I yield to the Statistics for Industry Groups and In

da; second, maintenance of certain lev- gentleman. dustries,” 1963 Census of Manufactures,

els of production; third the proportion- Mr. MILLS. Let me call the gentlepreliminary report MC63(P)-3.

ate increases; and, fourth, expansion of man's attention to this, in answering his Bureau of the Census, Department of production over a period of 3 years by questions. The gentleman has within his Commerce, 1964 Annual Machine Tabu

the major manufacturers in a total congressional district the city of Buffalo, lation EA 6663. amount of $240 million.

as I understand it. Securities and Exchange Commis

This is the price that is being paid Mr. MCCARTHY. Part of it. sion, statistical series No. 2055, “Plant for this free trade. As the Under Secre- Mr. MILLS. Buffalo is very near the and Equipment Expenditures To Rise

tary of State, Mr. Thomas C. Mann, in Canadian border, as I remember my Throughout 1965,” June 7, 1965.

his testimony said: Bureau of Labor Statistics, Depart

geography. The gentleman's producers

Its purpose is to make possible a single of parts in Buffalo prior to this agreement of Labor, "Employment and Earn

North American automotive industry, and it ment would be faced with Canadian ings Statistics for the United States

goes far beyond a typical reduction of tar duties as high as 25 percent each that 1909–64,” bulletin No. 1312–2, issued De- iffs in a trade negotiation.

would average 17 percent. The Canadian cember 1964; “Employment and Earnings," July 1965; “Employment and

It is, therefore, apparent that this is a Government says that the licensed autoEarnings Statistics for States and Areas sweeping experiment in our trade rela

sweeping experiment in our trade rela- mobile manufacturers and parts manutions with Canada.

facturers and jobbers in Canada will be 1939-63,” bulletin No. 1370-1, issued 1964.

To those who argue that there shall permitted to import into Canada parts Bureau of the Census, Department of

not be any economic displacement, I produced in the gentleman's district free Commerce, “County Business Patterns,

simply point out the clear anticipation of that 17 percent for use as original First Quarter 1962, Part 4A, East North

that there shall be loss of jobs by the re- equipment. I have all of the confidence Central States."

quest to amend those sections of the in the world in the ingenuity and knowBureau of the Census, Department of

Trade Expansion Act that provides for how of American business and American Commerce, "Congressional District Data

adjustment assistance arising out of such labor. I would think that undoubtedly dislocation.

the export of parts from a place as near Book-Districts of the 88th CongressA Statistical Abstract Supplement,'

It is significant to note that this bill the Canadian border as Buffalo is would 1963; "Supplement to Congressional Dis- also provides, in establishing this adjust- mean it would share in the growth of the trict Data Book-Redistricted States: ment assistance, that the determining automobile industry in Canada and a Michigan," January 1965, CDDB supple

authority, as provided under the act for share would be in the gentleman's disment No. 7.

its implementation, is shifted from the trict. Mr. KEOGH. Mr. Chairman, I yield

Tariff Commission to the President or Mr. Chairman, I yield 3 minutes to the 2 minutes to the gentleman from Virthose to whom he delegates it.

gentleman from Wisconsin (Mr. STALginia [Mr. MARSH).

At a time when we are trying to limit BAUM). Mr. MARSH. Mr. Chairman, I thank

the outflow of American gold and favor- Mr. STALBAUM. Mr. Chairman and the gentleman for yielding.

ably adjust the balance of payments, we Members of the Committee, I rise in opMr. Chairman, I rise in opposition to will see American investment flowing position to bill H.R. 9042, because I, too, H.R. 9042, which, as the Members know, north of the border in the next 3 years in in line with other speakers, state that has been designated the United States- an amount of nearly one-fourth of a bil- it is not a free-trade agreement. I feel Canada automotive products agreement, lion dollars.

in the course of the debate so far this and has been described as creating a

Testimony in the hearings and other afternoon not enough attention has been free trade situation between the United economic surveys show that in the mar- paid to the letters of undertaking by the States and our great neighbor to the ket sense Canada heretofore has not had Canadian subsidiaries of the U.S. auto north, Canada. However, how free is the capacity to absorb large-scale au- companies. free trade?

tomotive production through purchases Basically what we have here is a situI submit that this is really not a free by Canadians. Where, then, can we ex- ation where the Canadian subsidiaries trade agreement for the export of Ameri- pect the automobiles to be sold that will said, “We will agree through these letcan automotive products to the Canadian be produced by the plans for expansion ters of undertaking to buy in the next market, but is really a Canadian indus- of the facilities in Canada in the next 3 3 years $241 million more parts in trial development program for the export years? It appears certain that this Canada than we have bought previously." of American jobs to Montreal and

and market will have to be the United States. I submit to you, representing an inWindsor. Actually, the Canadians are

Because this is a far-reaching obliga- dustry that supplies automotive parts, to be congratulated on their highly suc- tion in the field of trade which will only that this is putting my company at a cessful efforts for the economic develop- enable the American automobile pro- disadvantage in this foot race, if you ment of their country, which has ducer and parts manufacturer to gain please, to the tune of this $241 million occurred, however, I fear at the expense

access to the Canadian market at the which has been agreed to by these Caof the producers of automobiles and auto- cost of serious conditions, I cannot sup- nadian auto subsidiaries of U.S. commotive parts in this country. port H.R. 9042.

panies. A substantial producer of automobile Mr. KEOGH. Mr. Chairman, I yield I recognize the value of the statement parts has a plant in my congressional 2 minutes to the very able and distin- of the gentlewoman from Michigan that these are not part of the agreement for ourselves whether we are promoting The CHAIRMAN. The Chair wishes itself, but they were precursors of the the best interests of our Nation interna- to inquire if the statement is the gentleagreement and the Canadian Govern- tionally. With respect to the bill before man's own statement? ment, I am satisfied, would not have en- us I do not think we are. I do not think Mr. McCLORY. Yes; it is my own tered into the agreement if they had not we are acting wisely when we favor one statement. It relates to an amendment had these assurances from these com- group of automotive products manufac- that I would offer if I had an opportupanies. turers over another.

nity to offer it. It merely qualifies the I would like to point out in this con- I do not think we are promoting the acquiescence of the Congress with renection that this is the very item that best interests of our Nation insofar as spect to this legislation, with the proviso makes this other than a free trade our international relations are con- that is contained in the proposed amendagreement, and the committee itself has cerned, when we provide that automo- ment, which I have explained. so recognized it by its statement on page tive parts which are going into a new The CHAIRMAN. Is there objection 6 of the report where they state:

product are going to be exported duty- to the request of the gentleman from In the view of the committee, although free whereas those which are replace- Illinois ? these letters limit the free trade of the new ment parts are going to have to pay There was no objection. arrangementsduty.

The matter referred to follows: Mr. Chairman, insofar as I know we And then they go on to say they feel have never made any distinction hereto- the following: "Act, but only if the Agree

Page 2, line 17, strike out “Act.” and insert they are desirable, but they are admit

fore in the application of our tariff laws ment is amended to provide for the mutual ting in the report that this is not a free in which the imposition of tariff de- reduction or elimination of the duties applitrade agreement as a result of the letters pended upon the

end result

of a product cable to automotive products (hereinafter of undertaking that were written by the which was imported or exported.

referred to 'automotive replacement Canadian companies and which we are sure will have to be honored, although

We know that this legislation is a parts) other than motor vehicles and fabrithere are no penalties in the act itself if refinement or a new development of the nal equipment in the manufacture of such

so-called Canadian remission of duty vehicles. Such proclamation shall include they do not honor them. I do not accept the argument that these order which has now been abandoned. such further modifications of the

Tarife This was a form of subsidy of Canadian Schedules of the United States as the Presiare a part of the agreement, because to exported products which was under

exported products which was under dent determines to be required to carry out say this is to say that we are im

scrutiny by the Tariff Commission at the Agreement with respect to automotive plying that these companies would not the time it was abandoned and replaced replacement parts.”. keep their word. I am satisfied that the by this legislation.

Page 2, line 24, after “subsection (a))” inCanadian Government fully expects that

sert the following: “or which is an automo

Now, Mr. Chairman, I had intended these companies will keep their word,

tive replacement part".

Page 3, strike out line 4 and all that follows that in the next 3 years they will buy the to offer an amendment, if the rule were $241 million of additional parts in Can- an open rule and if we had the oppor- through line 3 on page 4, and insert the

following: ada and that the agreement would not tunity to offer such an amendment.

However, I do ask leave to attach at "SEC. 202. (a) Whenever, after determinhave been acceptable to the Canadian the conclusion of my remarks the ing that such an agreement will afford Government if these letters

of undertak- amendment that I would offer if I had mutual trade benefits, the President enters ing had not been there in the first place. the opportunity to do so at the appro- country providing for

into an agreement with the government of a Mr. BYRNES of Wisconsin. Mr.

priate time. Chairman, I yield 5 minutes to the gen

(1) the mutual elimination of the duties

This amendment would merely do applicable to products of their respective tleman from Illinois [Mr. MCCLORY).

this: It would provide that this act countries which are motor vehicles and fabriMr. MCCLORY. Mr. Chairman, I should become effective only if it should cated components intended for use as origicome to this well with mixed emotions, apply to all automotive parts and to all nal equipment in the manufacture of such I suppose, insofar as representation of new automobiles. It would eliminate the vehicles, and my constituents is concerned, since I am duty on all automotive parts, regardless

(2) the mutual reduction or elimination informed that on Monday, September 13, of their final destination, regardless of of the duties applicable to products of their the large Chrysler Corp. is going to open whether they are intended for new auto

respective countries which are automotive

replacement parts, in my district a plant where they intend mobiles, or as replacement parts.

the President (in accordance with subsection to employ 5,000 individuals in the manu- In such a way we would be treating (c)) is authorized to proclaim such modififacture of new automobiles.

the automotive manufacturers equally cations of the Tariff Schedules of the United At the same time I am reminded that and equitably and we would be promot- States as he determines to be required to there are various automotive parts man- ing friendly trade as between our Na- carry out such agreement.”. ufacturers in my district, small inde- tion, something which I believe we all

Page 4, line 4, strike out "(c)” and insert pendent concerns, which are going to be want to encourage and which we all

the following: "(b)”. affected by this legislation one way or

Page 4, line 5, strike out "or (b)". desire.

Page 4, line 23, strike out "(d) (1)” and inthe other; some may benefit, and I am Mr. Chairman, as I said before, I am

sert the following: “(c) (1)". inclined to feel that many more may fearful that this legislation and the

Page 4, line 25, strike out “or (b)". suffer some detriment if the bill is agreement this bill authenticates are passed. going to result in misunderstanding, dis

Mr. MILLS. Mr. Chairman, I yield We debated here recently an immigra- sension, and disagreement. The agree- such time as he may consume to the tion bill and we were persuaded to reject ment is being promoted in Canada

as a gentleman from Kentucky (Mr. STUBBLEa certain amendment because we were means of aiding Canadian national in- FIELD). told that foreign policy was being made terests and not its international rela- Mr. STUBBLEFIELD. Mr. Chairman, by the Executive and we should follow tions. The promotion of these national I rise in opposition to this bill. that foreign policy. That bill had hard- interests is a part of the philosophy of My principal objection to the passage ly left this Chamber when the policy of the political party and administration of this bill is that the United States has the Executive was changed, in order to in authority in Canada at the present undertaken, in the so-called trade agreefollow the policy which had been pro- time. Passage of this bill will give en- ment with Canada, to grant duty-free posed in this Chamber by the amend couragement to that administration, but treatment to motor vehicles and original ment.

the measure will not advance the long- equipment parts imported by anyone Now we are urged to support this leg- range good relations between Canada from Canada Canada in return has islation as a fait accompli on the basis and the United States, and I doubt that undertaken nothing. Canada “promises”. that it represents part of our foreign the bill will promote cooperation, har- to give duty-free status to automotive policy and we have to support that for- mony, and free trade as between our products imports only if they are imeign policy. I question that this is good nations.

ported by “qualified" Canadian vehicle foreign policy. In addition, we have a Therefore, Mr. Chairman, I ask unani- producers. But a qualified Canadian right, as Members of this legislative body, mous consent to attach my proposed producer is one who has entered into in the enactment of legislation, to decide amendment as a part of my remarks. a private agreement with the Canadian

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