We also strongly feel that the provisions of the present act which compel the Tariff Commission to launch a full-scale investigatic upon the receipt of an escape-clause application from any domestic industry should be changed. Not only does this mandatory prov sion burden the Commission and its small staff with an undue num ber of time-consuming investigations, but it also presents an unreasonable hardship upon the importers of the commodity involved.

When an escape-clause investigation is instituted, importers must take time from their normal business operations, and incur the heavy expense involved in such investigations. Even after the Commission has completed a full investigation and reached the conclusion that no threat of injury is present, the domestic industry may, under the present law, lodge a new application and the whole thing starts over again. This may very well lead to abuses as home domestic groups might be tempted to make repeated applications merely to harass importers.

While such investigations are in progress, the importer is hampered in his operations and in making the advance commitments that are normal in the conduct of import trade. He is in a state of uncertainty as to whether the rates of duty will be increased to raise his costs, and if so, when it will happen. Upon the receipt of each application under the escape-clause provisions, we strongly believe that the Commissie should decide whether or not an application has merit. If it seems to have, then the Commission should decide, on the basis of facts that can quickly be determined, whether or not a full-scale investigation is justified.

4. Injury concept: H. R. 4294 contains a radical broadening of the injury concept which serves as guidance for the Tariff Commissi in escape-clause investigations or peril-point determinations. The proposal is to substitute "unemployment of or injury to America miners, farmers, or producers, producing like or competitive prod ucts, or impairment of the national security" for the language in the present act, "serious injury to the domestic industry producing like or directly competitive products."

This is a major change which we regard as most objectionable. It is a well-known fact that in many industries there is seasonal unem ployment, and such unemployment of workers, miners, or farmers would encourage unwarranted escape-clause applications.

Furthermore, escape-clause investigations and peril-point deter minations would be governed by the existence of adverse conditions in even a small segment of an otherwise thriving industry, ever though the cause of the adverse condition confronting that small se ment or group of workers, miners, and farmers might have no retionship whatsoever to any competition from imports. The substitution of "injury to * * producers" for "serious injury to the domestic industry" implies that restrictions on imports are quite in order even though the competition from imports may be trivial, insignificant, or transitory.

*

The substitution of "like or competitive products" for "like or directly competitive products" opens the field for unwarranted re strictions of imports still further.

degree

We understand this to mean that imports of a given product may be subject to new restrictions if they are a substitute in for the domestically produced article. Under this concept, we might

any

expect to hear complaints from domestic producers of plastic articles such as ladies handbags against imports of leather handbags, or from manufacturers of synthetic textile articles against imports of articles nade from natural fibers with which they do compete.

5. Tariff Commission: The bill proposes to increase the number of Tariff Commissioners from 6 to 7, nor more than 4 of whom shall be nembers of the same political party. Our objection to this proposal s that it will change the present character of the Commission from a Fact-finding body to a political institution. In our opinion, it would be a grave mistake for the Congress to make such a change, particuarly as the Commission is being depended upon to develop the facts n an objective atmosphere.

Importers would like to see a reduction in the time now required for the various investigations, but we do not agree that this requires changes in the Reciprocal Trade Agreements Extension Act. What is really needed is a reasonable increase in the expert staff of the Commission which now only numbers about 200 under an annual appropriation of $1.3 million.

The Tariff Commission, in reaching decisions, must rely on factual nformation developed by the commodity divisions of the Commission with interpretations of these facts supplied by the economic and legal divisions. But the commodity divisions and the economic and legal livisions of the Commission are very seriously understaffed.

This is demonstrated by the fact that when President Eisenhower recently asked the Commission to undertake a special investigation under section 22 of the Agriculture Adjustment Act with respect to mports of agricultural products covered by section 104 of the Defense Production Act, the Commission was obliged to defer previously scheduled public hearings on three escape-clause investigations.

We would earnestly suggest that this committee explore the personnel shortages now existing in the Tariff Commission, and make ppropriate recommendations to the House Committee on Appropriations to remedy the situation. In our opinion, the surest way to speed up all investigations by the Commission is not to increase the number of Commissioners from 6 to 7, but instead to increase the present small staff by about 50 percent. One hundred more experts, stenographers, and clerks could be added to the staff by the very wise expenditure of less than $500,000 in public funds.

6. Cost of production investigations: We also wish to register our opposition to section 9 of the bill which would eliminate the present prohibition against cost of production investigations under section. 336 of the Tariff Act with respect to items covered by a trade agreement. To do this would eliminate any certainty whatsoever that modifications of duty rates pursuant to a trade agreement could be counted upon to remain in force for any period of time.

Such a great element of uncertainty would surely wreck the entire program of reducing trade barriers between nations. Section 336 is often called the flexible provision of our tariff act, and was a device. created during the Fordney-McCumber tariff era with the primary intent of having it flex as an elbow-only upward. We believe that section 336 is very much outmoded and should be repealed.

7. Unfair practices in import trade: We also suggest that section 10 of the bill which proposes to amend section 337 of the Tariff Act

of 1930 be deleted, although this section has rarely been invoked. In the few cases where the Tariff Commission has conducted investig tions under section 337, they related to alleged infringements of s domestic patent. The Congress has provided suitable tribunals i which suits may be filed to prevent violations of patent rights or to obtain damages for such violations. Furthermore, the Tariff Con mission is not really qualified to deal with patent cases.

8. Antidumping and countervailing duties: Sections 11 and 12 of the bill propose certain amendments to section 303 of the Tariff Act relating to countervailing duties and to section 201 (a) of the AntiDumping Act of 1921.

Our objection to these proposed changes is chiefly that additional duties are to be imposed without a determination of any kind that a domestic industry is being injured or threatened with injury, or ever that a domestic industry shall be in existence or be prevented fro being established. It, therefore, is clear that these proposed ameni ments to our tariff and antidumping laws are purely punitive nature, and not designed to achieve any useful protective purpose.

Finally, if H. R. 4294 is adopted in its present form, we woul seriously suggest that it be cited as the "Protective Tariff Act of 1957 rather than the Trade Agreements Extension Act of 1953, as its purpose is obviously not to continue in effect the present trade-agree ments program, but actually to destroy it.

The entire question of our tariff and trade policy as an integra part of the United States foreign economic policy is an extremely complex subject that surely requires calm, careful, and thoroug study. The national interest and the effect of the policies finally adopted upon our relations with the Nations of the free world should be controlling on any action taken.

For this reason, our organization strongly endorses a 1-year renewa of the Trade Agreements Extension Act of 1951 without furth crippling amendments, and we hope that the Congress soon authorize the establishment of the commission suggested by Presider: Eisenhower to make a thorough reexamination of our whole foreign economic policy.

The CHAIRMAN. Does that conclude your statement?

Mr. RADCLIFFE. Yes, sir.

The CHAIRMAN. We thank you very much for your presentation Are there any questions? The Chair hears none. We thank you. Mr. RADCLIFFE. Thank you.

The CHAIRMAN. Mr. Raymond H. Papernow, the American Fur Merchants' Association, Inc., New York City.

If you will give your name to the reporter and the purpose for which you appear, we will be glad to hear from you. I would like to ask you, inasmuch as it is close to 12 o'clock, how long will it tak you?

STATEMENT OF RAYMOND H. PAPERNOW, THE AMERICAN FUB MERCHANTS' ASSOCIATION, INC., NEW YORK CITY

Mr. PAPERNOW. I do not think it will be more than 10 or 15 minutes. I will try to make it as short as possible.

The CHAIRMAN. We have a pretty long day of it here.

Mr. PAPERNOW. My name is Raymond H. Papernow. I am chairan of the Foreign Trade Committee of the American Fur Merchants' ssociation, which consists of fur dealers, brokers, and processors of irs of United States and foreign origin.

The purpose of this memorandum is to acquaint you, the House Ways and Means Committee and the Senate Finance Committee, with e view of the American fur trade in connection with the bill for e extension of reciprocal trade agreements known as H. R. 4294, on hich hearings are being held now before the House Ways and leans Committee.

Furs represent an important part of our natural resources and the apping of furs provides an income to hundreds of thousands of appers and farmers throughout the United States and Alaska. The ir trade is one of the oldest trades existing in the United States and om its very inception it has always been a trade of an international aracter. Years ago, the United States used only a small part of its nual fur crop for home consumption and exported most of it to other untries throughout the world but with the growth of the population nd the economic progress of our country, we used more and more of ur own furs and have also been importing many foreign furs to supply e growing demand of our population.

The value of the annual crop of American furs has been estimated › be anywhere between $125 to 175 million, depending on the existing arket prices. During 1947, when the retail value of fur garments ad fur trimmings had reached the figure of over $500 million, we nported $140 million of foreign furs and, at that time, the fur trade as employing 40,000 to 50,000 people in the processing, manufacturg and distribution of furs.

During the years when we imported large quantities of foreign furs > supply our demand, we still exported very large quantities of merican furs to foreign countries. They were furs of the type for hich there has been no demand in the home market and finding an sport market for the unwanted furs has been very important to our ade as we were able to pay fair prices to the trappers and farmers, ot only for the furs which we used in our own country, but also for urs for which there was no demand in our market.

Since the end of World War II, we have found many foreign marets either closed or restricted to the importation of American furs. or example: Australia does not allow the import of American furs ut the Australian fur trade is permitted to buy European furs as ell as some American furs which are processed in Great Britain. rance allows the import of American furs only to the extent of 72 ercent of the export of French furs to the United States. At the ame time, France permits the purchase of other European furs as well as the import of American furs provided they are purchased n London. Germany allows the import of American furs to the xtent of 40 percent of the value of the export of German furs to the United States.

When trade agreements are negotiated between various European Countries, those countries which are producers of furs always stipulate hat a certain amount of their furs must be included in the volume of trade with the country with whom the agreement is negotiated. The United States Government, in negotiating reciprocal-trade greements, has never made any provision for the importation of

American furs by the country with which the agreement was negetiated and we feel that in the future, whenever a reciprocal-trad agreement is negotiated with any foreign countries, provision should be made with such countries to allow a free import of Americar furs.

When the Trade Agreements Extension Act of 1951 was passe by the House of Representatives, section 11 was added prohibiting the importation of certain types of furs from the U. S. S. R. or Com munist China. Those restrictions have hurt our trade a great deal as it cut off an important supply of furs from our market and, as a result of it, it has caused a great shrinkage in the volume of our b ness to a point where, in 1952, the retail volume of sales was only about $250 million against $500 million in previous years. As a result of that shrinkage, the fur trade has a great number of people who are unemployed as there is not enough work for them and the incone of people engaged in the fur business suffered very badly.

Also, the restrictions on the importation of foreign furs have L helped the American fur trappers and farmers in any way as the demand for furs is dictated by fashion and the absence of the en bargoed Russian furs from our market has not improved the deman for those types of American furs which this market has not pr viously used.

At the same time, it has hurt our export trade as the Russian Gor ernment, since the embargo on some of their furs took effect, he been selling those furs to European countries in competition with American furs and has resulted in a decline in prices of America: furs sold to Europe and also restricted the demand for same. Fo example: Three main articles of American furs which were exported to Europe were raccoon, opossum, and skunk.

In 1951, we exported 954,143 raccoons, 1,697,959 opossums, and 1,009,400 skunks. During 1952, we only exported 739,879 raccoon, 868,435 opossums, and 709,546 skunks. This shows a decline in exports of anywhere from 25 percent to 50 percent.

While the restrictions on the importation of Chinese furs have hur our trade, we are not raising any objections to it since imports of 1 Chinese goods have been restricted and those restrictions were base on good political reasons. However, as far as the restrictions on sor of the furs from the U. S. S. R. are concerned, we believe they were imposed mainly as a concession to the fur farmers' group who are engaged in the business of raising ranch mink.

If our Government wanted to prevent the U. S. S. R. from selling its goods in the United States of America and, on that basis, restricte the importation of all goods from the U. S. S. R., we, as patriot citizens, could have had no objection to it.

But, in placing a restriction on some Russian furs only and allowing the import of all other Russian products to the United States America, we feel that the fur trade has been discriminated agains and we believe we have a right to ask Congress to amend the recipr cal trade-agreements law by striking out clause 11 from Public Law? approved on June 16, 1951.

Prior to World War II, London was the fur center of the world and even though England is not a fur-producing country she attracte buyers from all over the world, mainly because the London market