In this portion of the bill, the Administration undertakes what
it considers to be a reform of the procedures and criteria which would
enable the President to assist domestic industries and workers to adjust
to injury from increased imports. The public statements of the President
and his representatives on this topic indicate that from a policy point
of view, the intent of the Administration to provide relief to domestic
industries is very narrowly circumscribed.

It is said that relief would be extended to industries which
suffer injury from sudden and massive increases in import volume such
that it is difficult for the industry to adjust and to avoid the full
impact of this sudden increase. The theory underlying the Administration's
position is, evidently, that relief will not be granted to domestic
industries that are injured by a steady increase in imports of like
or directly competitive products; rather, such industries are expected
to transfer their resources into other lines of production so as to

The focus of the Stewart paper's criticism is that the
trade bill would provide only very narrowly circumscribed
import relief. According to its analysis, relief will
I not be granted to domestic industries that are injured by
a steady increase in imports but only to those experiencing
sudden and massive increases. While the paper acknowledges
the fact that the availability of import relief will be
greater through the trade bill's deletion of the "link" to
previous tariff concessions, the paper nevertheless
considers the shift from "major" to "primary" cause as a
"distinction without a difference" since the petitioner
still has the burden of establishing his case that imports
caused the injury.

In fact, the provisions of the proposed Trade Reform
Act represent a major liberalization of the import relief
criteria. Of course the bill defines the parameters
within which relief will be granted, otherwise it would

MR STEWART

GOVERNMENT

20(B)

avoid such injury. The simple notion underlying this position is that
the areas of systematic import injury are so limited and so narrowly
defined that it will be a matter of comparative ease for any domestic
manufacturing concern or group of concerns representing an industry to
escape the injurious impact of steadily increasing imports by simply
moving into some other line of production.

As a corollary to this notion, Administration spokesmen speak
of the ability of technologically intensive industries to compete and
the necessity for labor-intensive industries to increase their capital
investment in technology so as to be able by shifting into technologically
intensive fields to surmount the danger of destructive import injury.
Thus, the Administration does not in fact intend to regulate import competi-
tion through the selective adjustment of tariff levels in a manner that
would enable efficiently conducted American industries, saddled with the
costs inherent in the American standard of living, to continue to produce
goods that are adversely impacted by steadily rising volumes of imports.

be extremely unfair in its operation and offer no standards
for its administration. It is not accurate in any way to
characterize the intent of the provisions as being to circum-
scribe relief when they will accomplish the opposite. Relief
has beer too restricted in the past operation of the escape
clause provisions of the Trade Expansion Act. The import
relief provisions of this bill remedy this defect and
will make import relief more readily available; but still,
of course, only where the facts justify its use.

The provisions will not deny relief to industries
on the grounds that imports have increased steadily,
not suddenly and massively. The Tariff Commission is to
investigate whether imports are the primary cause of injury
whether or not there is market disruption.
In his message

accompanying the bill, the President described the need
to provide relief for industries, seriously injured by
sudden surges in imports. This description of a situation
where relief would be necessary does not imply that relief
would not be granted to industries injured by a steady
increase in imports.

The true significance of the Administration's proposals
concerning import relief is seen in the language used in Section 201;
viz., Section 201(a)(1) refers to import relief "for the purpose of
facilitating orderly adjustment to import competition" and requires a
petition for relief to include a statement of "the specific purpose for
which import relief is being sought, which may include such objectives
as facilitating the orderly transfer of resources to alternative employment
and other means of adjustment to new conditions of competition." This
language is quite direct in transmitting the Administration's intention
not to favor any form of relief for industries where existing conditions
of competition created by trade agreement concessions in the past have
stimulated imports to the extent that at present or in the foreseeable
future serious injury will occur to the industry and its workers regard-
less of their relative efficiency as judged by contemporary management
and production technology applicable to their line of product.

With regard to the "primary" cause criterion, the

change from the current "major cause" requirement is signifi-
cant. Major cause was not defined in the Trade Expansion
Act but was interpreted by the Tariff Commission to mean
greater than all other causes combined. The current trade

bill, on the other hand, defines "primary cause" to mean
"the single largest cause." This is a much lesser burden

on the petitioner. Furthermore, where the market dis-
ruption test is met, the bill provides that a prima facie
showing of primary cause shall be considered to have been
made. Thus, where the Tariff Commission finds serious
injury, or the threat of serious injury, a finding of
market disruption will constitute prima facie evidence
that increased quantities of imports of the like or
directly competitive articles are the primary cause of
the injury or threat of injury.

Of course, for cases where market disruption is not

MR STEWART

GOVERNMENT

21(B)

A further indication of the paucity of intention so far as

assisting domestic industries and workers in this context is concerned

is supplied in subsection (b)(1) of Section 201 of the Administration bill.
There the key test which must be applied by the Tariff Commission in an
investigation is stated as "whether an article is being imported into

the United States in such increased quantities as to be the primary cause
of serious injury, or the threat thereof, to the domestic industry producing
articles like or directly competitive with the imported article."

The key words here are "the primary cause. Evidently it is hoped by the draftsmen of the bill that some notion will be generated that the conditions for relief are being relaxed by changing the language from the requirements of the Trade Expansion Act of 1962. Section 301(b)(1) of that Act requires a determination by the Commission that as a result "in major part" of concessions granted under trade agreements, an article is being imported in such increased quantities as to cause or threaten

found, the domestic industry still must show a primary
causal relationship between serious injury and increased
imports. To do as the Stewart paper suggests, i.e., provide
relief merely on the showing that increased imports "caused
or contributed to" serious injury or threat thereof, would,
in effect, establish a general relief program for domestic
industry with an absolutely minimum relationship between
imports and injury. Such is the case because, under this
requirement, an industry experiencing a decline in profits,
sales or employment during a period when imports of
competitive articles are showing any increase could pro-
bably demonstrate that such increased imports "contributed
to" injury. The likely result of such a program would be
the erection of innumerable trade barriers, with the
inherent deleterious effects on U.S. exporters and consumers,
when international trade is not necessarily the primary
cause of an industry's difficulties. The costs to U.S.

MR. STEWART

GOVERNMENT

21(C)

serious injury to a domestic industry. As specified in paragraph (3)

of that subsection, increased imports shall be considered to cause or
threaten serious injury when the Commission finds that they have been
"the major factor" in causing or threatening such injury.

It is true that the omission of the preliminary requirement
of showing that increased imports are due "in major part" to concessions
granted under trade agreements will eliminate one of the bases upon
which the Commission has frequently denied relief to domestic industries,
firms, and workers seeking relief under the Tariff Adjustment and Other
Adjustment Assistance Title of the 1962 Act. But a significant stumbling
block in these cases has also been the necessity for the petitioner to
prove that the increased imports have been "the major factor" in causing
or threatening serious injury. Shifting from a conceptual test of "the
major factor" to "the primary cause" is virtually a distinction without
a difference.

consumers and to efficient U.S. producers would be severe
and the benefits, if any, to protected domestic producers,
would be unwarranted.

In this regard the Administration recognizes that it
is in the national interest to ease the adjustment problems
which can result from increases in imports. We feel that
· the safeguard provisions of the trade bill fully meet
this responsibility.

Furthermore, the "primary cause"

provision relaxes the admittedly stringent "major cause"
test without making the connection between imports and
injury so tenuous that the underlying rationale
import relief is lost.

for