Secretary ROGERS. Mr. Chairman, I think my answer would be that, by and large, it has worked quite well. By and large, there has been a good deal of reciprocity. But I think anyone would have to acknowledge now that there are certainly areas where there is some doubt about whether reciprocity or the spirit of reciprocity exists. We in the Department of State are quite conscious of that.

We are going to do what we can to change that attitude on the part of some of our friends and allies.

The CHAIRMAN. Pardon me for interrupting you, Mr. Secretary, but why do we have to go to the trouble, actually, with these nations with which we carry on trade, this colloquy of trying to convince, in the light of what we have done? That is the thing that disturbs me. We have demonstrated our desires.

Secretary ROGERS. I think that is right. I think it is a valid point. First, I think everyone always feels that his side is right. We start out thinking we are right.

The CHAIRMAN. I just don't feel that way. I know we have done the right thing insofar as our leadership is concerned in trying to demonstrate what should occur in this whole area.

I say again, no country has ever gone as far as we did in that legislation. We even said we would give the President authority to reduce rates of duties to zero. It never came about because Great Britain has never been admitted to the Common Market.

We said we would give authority to the President on those articles that represent 80 percent of the free world's export to go to zero, if they would, with respect to the duties on those particular articles. We also agreed to zero with respect to the duties on articles that were produced in the tropical areas, the underdeveloped areas of the world. We gave that authority.

But every time I talk to an American businessman, I find that some new impediment is put in his way by this or that country of the world that holds itself out as being a believer in more liberal trade.

That, to me, is not reciprocity.

I am almost at the point of becoming weary of trying to have to convince people all over of the virtues of this when they, themselves, have access to what is here, perhaps the only open market in the world, on most of what they produce.

Everybody has some restriction on us; we have very little restriction on anyone else.

Secretary ROGERS. I think that the views you have expressed are the views that a lot of Americans have. I think it would be quite easy, in view of that, to enter into a trade war. I think that past history indicates that that would be very unfortunate.

The CHAIRMAN. I agree with you. I don't want that. I want to get rid of these irritants.

But the irritants are not all on our part toward them. Yet, when we talk to people who represent interests abroad, I seem to get the impression that they think that all of the irritants are on our part toward them. They overlook what appears to be quite an irri

tant to us.

Secretary ROGERS. I think that is going to be particularly true in the future of the Community, too, because as it is enlarged there are going to be additional irritants that we are going to be faced with.

I suppose some of them will be inevitable. We have indicated a willingness to pay a price for a more integrated Europe, but we have also indicated to the Community that it shouldn't be a very high price, that they have to take into consideration the very points that you are making.

We have had discussions with several of the members of the Community about it. One of the things we are going to try to do is work out a regular arrangement so that we can consult with them as these developments occur, to see if we can avoid some of these irritants.

There is no doubt that that will be a natural result from the enlargement of the Community.

The CHAIRMAN. But the point with me is this: Even though we are the world's largest trader, individual trader, in international affairs, still, so far as our own country is concerned, foreign trade represents a very small part of our total activity, whereas most of the counrties of the world trade represent a far greater part of their total activity. It looks to me like they would have more interest, than I think they do have, in trying to be reciprocal in their treatment of us.

I am talking about reciprocal treatment, not discrimination. Secretary ROGERS. I think we have a responsibility in the State Department to make them look up to this. There is no doubt about it that trade will assume a greater importance in foreign policy in the years ahead.

In order to have Americans understand and be willing to engage in free trade we have to have reciprocity. We are quite conscious of that.

We are working on it and we will continue to. I hope that maybe next year we will have some progress that we can report to you. The CHAIRMAN. I hope we won't go to the GATT with hat in hand and let them think we are trying to beg them to do something.

Frankly, I think the time has arrived when the people of the world must recognize that we are just not going alone, by ourselves, up this trail, that they have to go with us.

I don't think they feel the compulsion to do that to the extent that is required to maintain this program, and the continuation of this program. I don't want to see it fall. That is why I am so concerned about the situation here. And neither do I want to see the American market the only open market. Neither do I want to see us have to be the recipient of the excess production of all of the countries of the world when we have excess production here, the exports of which are restricted in most areas of the world to a far greater extent than we restrict any of their products.

My whole purpose is to try to stimulate our own people here and to stimulate people abroad into recognition of this very fundamental fact. I have talked to a number of people from the European Common Market who are quite well aware that irritants exist today that if not reonciled will lead to greater problems that can take us completely off this track that we are on today.

They are very anxious that we sit down, that we talk man-to-man in a very self-interest type of talk.

I am not blaming anybody. You haven't been in office when all of this happened. President Nixon was not in office when all of this happened.

Very frankly, I think we have been outsmarted and outtraded. I congratulate those that can do that to us. They have done it. But what worries me now is that we are going to have to sit down and bargain with them to get rid of restrictions and we have nothing left to bargain with.

Well, there is the American selling price, and we have bargained that away if the Congress gives it up. But that is infinitestimal to the restrictions that are placed by other countries on us.

I don't have any love of the American selling price. I don't feel one way or the other about it.

Secretary ROGERS. I don't want to leave the position that we don't have a bargaining position. I think hearings of this kind are helpful. There is an awareness, particularly in the Common Market, that this feeling is growing in the United States, that there has to be more reciprocity.

I don't want to name names, but some of the people who are leaders of these nations I have talked to are quite aware of it. They are quite aware of the danger that exists in the future for the Common Market if they don't take this more fully into account.

I don't think any nation of the world thinks we have lost our bargaining position. I think maybe we can be faulted for not pressing hard enough. Maybe, as you have suggested, we have been out-traded, but I don't believe we have lost our bargaining position.

The CHAIRMAN. I understand our tariffs are lower, by and large, on the average, than the tariffs of most any of the other countries of the world. They have far more impediments that are not in the nature of tariffs than we do.

If we have to go to Greece and bargain with Greece to change the highway safety regulations to the extent of permitting one of our middle-size cars to be driven on the highways in Greece, how do we go about bargaining? What do we give them in return?

If the cars we make here do not meet their standards by a few inches, they are too long and, therefore, dangerous on the highways, and we can't sell them-they would like to have General Motors put a big factory in over there, of course, then they would probably change their standards. How do you go about dealing with a situation like that? On what basis do you negotiate? That is not a tariff matter.

It may have been changed, but the chairman of the board of General Motors within the last 3, 4, or 5 years, told me that they couldn't sell a car made by General Motors in Greece because of these safety standards, but that the standards were such that any European car could be sold there.

Secretary ROGERS. I am not familiar with that, Mr. Chairman. The CHAIRMAN. I say, though, that if it is a fact, and I think it is, how do you go about bargaining away something like that, getting it out? That is their safety law. I think we would probably be better off here if we had some safety laws of our own that would keep some of these automobiles equipped with a lawnmower-type motor from darting in and out of the lanes and making it almost impossible for a Member of Congress to get to work without getting run over. But that is not the jurisdiction of this committee.

I could go on and on, but I think you and I are pretty much in accord.

Secretary ROGERS. Yes; we are.

The CHAIRMAN. We said yesterday to Secretary Stans that we would hear him toward the end of our public hearing and get a report from him on the progress that he has made up to then about a voluntary arrangement on textiles that he has been working so diligently to accomplish in the last several months. Probably the hearings will end the second week, we hope, of June. That is almost a month. It looks to me like if people are willing to settle differences and get down to the elimination of irritants, it could be done within that period of time. Certainly, we would hope so, because I don't want to legislate quotas any more than you do. Neither do I want to have Secretary Stans come back a year from now and tell us that we have lost another 50,000 or 60,00 employees in the textile industry, and that our shoe people are working, in place of 3 or 4 days a week as they are now, 1 or 2 days a week.

We have our own interests here to protect. If we can't get the cooperation of those that are causing us these problems, then we just have to do the best we can.

Secretary ROGERS. I think, too, Mr. Chairman; there is another matter of concern as far as we are concerned. The fact that we have spent so much time on this particular issue of textiles, has in effect, I think, put into the background some of the other trade barriers that we should be involved with and discussing.

The CHAIRMAN. Actually, the voluntary arrangement on steel was a 3-year situation. We don't know whether or not there will be any willingness to continue that as there should be for a longer period of time.

I pointed out yesterday that our increases in imports of machinery and things of that sort, both electrical and nonelectrical, have very materially increased, authomobiles and everything else you can think of having increased, too.

There is a decided change, apparently, in the attitude of people who belong to the unions, the working people involved in this. They were always along with the farm population about the strongest advocates of this program.

If we don't accomplish the result of eliminating the fears that exist here in the United States through something, then we lose large blocks of support for a program that will make it in time impossible for Congress to enact a continuation of that type of a program.

It is just that simple to me. It is what I don't want to see happen, and I know you don't want to see it happen.

I think the greatest service that any of us can render our country today is to see to it that our friends abroad understand our problems sufficiently to where we get their full cooperation in the elimination of these irritants before it gets to the point that they have become a trade war.

I am sorry to take so much time.

Mr. Byrnes.

Mr. BYRNES. Thank you, Mr. Chairman.

Mr. Secretary, I do appreciate your appearance before us. I think we all do.

I must say that what concerns me, and I think it is the same thing that concerns the chairman, is that through our 18 Congresses and six

Presidents since 1934, as you point out, we have taken a basic policy and basic attitude toward freeing up trade.

I wonder whether this history hasn't put us in a position where we are taken for granted in world trade. It seems we have left little doubt as to whether we are going to be Yankee traders, as far as our interests are concerned.

This certainly is not an attempt to try to lecture you, but it is an attempt to give you my viewpoint. I don't get a chance to see you very often, knowing you are so busy, so I will take this opportunity to try a little communicating.

The thrust of your remarks as Secretary of State is that we hardly dare to harden our attitude; that any move which attempts to harden it will be interpreted as a step toward a restrictionist policy.

It seems to me if you are going to have freer trade, other traders have to stop taking us for granted and we have to harden our attitude. We are always warned that there will be a trade war if we take a restrictionist attitude. But isn't it about time that we tell the other countries, "If you are going to take a restrictionist view," which we know some of them do, "we can be restrictionist also, and we can harden and we will have to harden."

It seems to me they leave no alternatives. I think we do an injustice if we constantly tell them they can do almost anything they want, that we will continue to keep this almost completely open market here even though they close theirs.

What I am doing is repeating, to some extent, I am sure, what the chairman he said. But this point has been concerning me all along, that we were moving too much on a unilateral basis, even though we called it multilateral.

Let me ask this about the Common Market, Mr. Secretary. We were told that this was going to be a great outward-looking trade group, when it was first presented. Yet, don't you find numerous evidences that it is quite inward looking in its trade policies and tariff policies? And won't its enlargement, which you envision, simply be an enlargement of an inward-looking group rather than an outward-looking group?

Secretary ROGERS. I think there is a lot to that. It is true especially, I think, in agricultural products. I think at least some of the members are quite aware of that. In their discussions with me they say they have tended to look inward too much and they have to change their attitude. They can't follow that path. I think it is a very real danger.

I would like to come back to the first part of your comment because I think I should tell you that I didn't, by my statement, intend to suggest that we were going to take sort of an apologetic position or a weak position in our discussions on these trade matters.

I phrased the statement the way I did because I think it is a very easy thing for us, because what you said I think is correct, to get so annoyed we sort of decide let us give it up, let us change the direction of our policy.

I think that would be a mistake. I felt sure when I came here that this committee would give me enough ammunition so that I could use it in negotiations we are going to have.

I don't think there is any lack of understanding on the part of some of the nations we are dealing with that there is a growing feeling in