also becomes quite evident. During the last ten years imports have increased by 106 percent, exports by only 51 percent. It is also worth noting that during the last twenty years imports have increased steadily even though the proportion of dutiable goods during the second half of this period increased to sixty percent from the forty percent in the first half. This accounts for the increase in average duty on the value of imports in the second ten years period to about seven percent, from the five and three-quarters percent in the earlier period, in spite of tariff reductions under the trade agreements. The cost advantage which our foreign competitors have had was in many cases obviously sufficient to offset the relatively high duties on the goods which they sent us. The reduction in duties under the trade agreements during the period merely increased their advantage, an ominous portent of what we can expect as the Kennedy Round reductions become effective. Even more important, however, is the composition of our exports and imports since our trade agreements under GATT became effective in 1948. Since that time our exports of crude materials and foodstuffs have about doubled and our exports of semi- and finished manufactures, of which our much sought after sophisticated equipment has been an important component, have increased about two and onehalf times. In the meanwhile, however, our imports of crude materials and foodstuffs, which involve relatively little labor, have also doubled, but our imports of semi- and finished manufactures which do involve considerable labor, have increased sevenfold. In other words, the big advantage of lower labor and related costs in many industries abroad has clearly been exploited by foreign countries under the reductions in our tariffs granted in the trade agreements. These facts are not offered to disparage foreign trade. International trade is necessary and inevitable as exchange of goods takes place between countries which produce goods that others need but do not themselves produce or do not produce as economically. As production and resultant affluence increase in the various countries, this international exchange of goods naturally tends to increase. If there were free exchange of labor, money, and other economic factors among the nations, free international trade would be as natural as it has become among the states of this country. But that is now far from being the situation, and adjustments must be made in our international trade economically and realistically to reflect this fact. If the nations engaged in international trade do not accept this practical necessity and make these adjustments with a reasonable degree of understanding and willingness, then indeed serious strains will develop and “retaliation" will become the name of the game. As the President affirms in his message to the Congress on May 28 on the proposed Trade Agreements Act of 1968, "Reciprocity and fair play are the essential standards for international trade." It is about time for us really to insist on these standards. The essential point of all this is that, on the whole, the beneficial impact of our foreign trade on our overall economy and the success of our foreign trade policy have not been so overwhelming as to warrant the expansion of our exports to the point where the accompanying increase in unneeded imports endanger important segments of our economy. Stubborn adherence to some of the faulty principles of our foreign trade policy have resulted in inequities which have hurt, in some cases badly hurt, a number of domestic industries such as the brass mill industry, not only by a decline in business, but just as importantly by restricting vital growth. It has led to indifference and inertia on the part of government agencies in recognizing the serious inroads of imports even in vital domestic industries, and has resulted in unduly prolonged studies and investigations without definite results. The general assumption appears to be that any industry seeking relief from imports somehow has an ulterior motive not in the public interest. DEFINITIVE ACTION AGAINST DUMPING IS IMPERATIVE The Antidumping Act of 1921 recognized dumping for what it really is; a discriminatory and therefore unfair trade practice involving sales by foreign vendors to buyers in this country at prices lower than they charge at home. This interpretation of dumping is quite consistent with the structure of our domestic laws and regulations against discriminatory pricing as being repugnant to fair competition. But an idea that claims of dumping might and would be used as a non-tariff barrier against imports has gradually developed. It has in recent years apparently become one of the principal aspects of the dumping problem as our latter-day foreign policy steadily edged toward international free trade. 95-159-68-pt. 5-35 Over the years the enforcement of the Act has become quite ineffective and the efforts to establish a finding of dumping under regulations implementing the Act, a frustrating and futile experience. The available record of dumping cases (1934-1967) illustrates this discouraging situation: Either a law against dumping is not needed because this unfair practice is really rare (which many injured industries will certainly dispute!) or the law as administered has been ineffective. The brass mill industry has had two painful instances of how ineffective the antidumping procedures can be, even when the Treasury Department has established presumptive evidence of the price discrimination involved. In one case, for example, copper tube was being sold in this country by a Canadian company at a special discount not available to its Canadian customers. After several years of investigation based on extensive evidence furnished by the domestic industry, during which time, of course, the dumping continued, the Treasury Department confirmed that dumping had occurred. It dismissed the complaint, however, on the company's assurance that dumping had ceased and relied on its promise that it would not be resumed. There is evidence that dumping has since recurred, although somewhat more subtlety managed. But no further action appears practicable under present interpretation of the law and regulations. A second case involved sheet copper from Yugoslavia, sold in this country at a price offered regularly at ten percent below the competition. Its result was a disastrous price demoralization in the concentrated markets in this country where the Yugoslavian product was sold. As far as the domestic mills were concerned, the prices which they had to lower drastically in a vain attempt to meet this local competition, however, had to be generally offered in a far wider market to avoid alleged price discrimination under our domestic laws. The Treasury again made a preliminary finding of dumping, but ultimately dismissed the case because it could not satisfy itself as to the price in Yugoslavia and had to depend on prices in certain free countries abroad. Also, it reasoned that the quantity involved was relatively small; related to the national market this was true, but the Treasury disregarded the chain effect of the dumping on the entire domestic market. It was because of experiences of this kind that the brass mill industry strongly supported the efforts of Senator Hartke and Congressman Herlong and more than 100 fellow senators and congressmen in bills successively introduced in the Congress since 1965, to make government action against dumping reasonably effective without opening the door to its possible misuse as a non-tariff barrier. When in 1964 the Treasury did issue new regulations in apparent recognition of the ineffectiveness of the antidumping procedure, these fell considerably short of requirements. The conclusion still remains that remedial legislation is needed. We must, therefore, repeat our urgent request that S. 1726 and the companion bills in the House be passed and so make the Antidumping Act what it should be, an effective weapon against an exceedingly unfair trade practice. Despite the fact that the Trade Expansion Act of 1962 gave our Kennedy Round negotiation team no authority to deal with dumping, and notwithstanding the adoption in 1966 of S. Con. Res. 100, stating it was the sense of the Congress that no agreement or other arrangements applicable under the laws of the United States should be entered into under the Trade Expansion Act of 1962 except in accordance with prior legislative authority delegated by the Congress, the so-called International Antidumping Code was agreed to in the Kennedy Round, with an effective date of July 1, 1968. In view of a general complaint that the Inter national Antidumping Code was in serious conflict with the Antidumping Act of 1921 and would tend even further to vitiate the effectiveness of our antidumping procedure, S. Con. Res. 38 was introduced, stating it to be the sense of Congress that the provisions of the International Antidumping Code are inconsistent with, and in conflict with, the provisions of the Antidumping Act of 1921; that the President should send the International Antidumping Code to the Senate for its advice and consent; and that the provisions of the International Antidumping Code should become effective in the United States only at the time specified in legislation enacted by the Congress to implement the Code. An identical resolution, H. Con. Res. 447, has been referred to your Committee. In a report requested by the Senate Finance Committee in connection with S. Con. Res. 38, the Tariff Commission on March 13, 1968 gave as its three to two majority opinion a confirmation of the fact that the International Antidumping Code was inconsistent with, and in conflict with, the Antidumping Act of 1921 and could not be put into effect without appropriate legislation. Logically the Commission would find it impossible to enforce the Code if it is allowed to go into effect on July 1, 1968. Even the Tariff Commission minority, while disagreeing with the overall approach of the majority and recommending a case by case determination, nevertheless agreed that where inconsistencies between the Code and the Act occurred under this circumstances, the provisions of the Act should prevail. Obviously without Congressional action, which the minority fails to mention, its recommendation would be an invitation to further chaos. In the meanwhile the Treasury published proposed extensive amendments to its Antidumping Regulations to conform them to the International Antidumping Code, and invited the written opinions of those interested. No report has been made on the opinions received, but the Treasury has now issued amended Antidumping Regulations (T. D. 66-148) which after purportedly giving due consideration to these opinions, put the conforming regulations in effect on July 1, 1968. This date is only a short time ahead. Immediate Congressional action is imperative to prevent the International Antidumping Code and the Treasury's new conforming regulations from going into effect as planned. Without such action, the preemption by the Kennedy Round negotiators of the legislative power to amend the Antidumping Act of 1921 without Congressional delegation, would go unchallenged. The resultant legal complications as disputes over the control of our antidumping procedure arose, together with the impracticability of the required simultaneous consideration of the complaints by both the Treasury and the Tariff Commission and the far more restricted interpretation of injury, domestic industry, the market and other pertinent factors, would reduce even further the already slim chance of effective remedial action in bonafide dumping cases. RECOMMENDATIONS The experience of the brass mill industry with our foreign trade policy under the circumstances and conditions related above, leads to its firm conviction that a number of changes in this policy are imperative. Accordingly, we urge that the following recommendations be given favorable consideration by the Committee. 1. Some Congressional directive is in order, requiring that our foreign merchandise trade statistics be presented in such a way as to show accurately what we have actually received for our commercial exports and what we have paid for our imports landed in this country, on a businesslike basis. If the statistical data issued by government are adjusted to reflect good commercial practice, the alleged large surpluses in our merchandise foreign trade dramatically fade away; a far more realistic attitude toward our foreign trade policy would ensue than is encouraged by the government's foreign trade statistics as they are now generally publicized. 2. All tariff and non-tariff restrictions of all the countries which are members of GATT should be catalogued and made available for review and adjustment on a fair equivalent basis. A generally accepted international standard classification of commodities would appear imperative to permit this to be done fairly and effectively. 3. Whether by direct amendment of the Trade Expansion Act of 1962 or by appropriate provisions in the proposed Trade Expansion Act of 1968, it should be made more readily possible for industries suffering actual injury from imports, or threatened with such injury, to obtain prompt remedial action by the govern ment. The availability of adjustment assistance offered in the Trade Expansion Act of 1968 to companies and workers injured by imports is, of course, important and desirable. It does not apply, however, to situations where the integrity of whole industries or substantial parts thereof is threatened, and where these industries are too important in the domestic economy to be liquidated by transfer of their management and workers to other fields. To provide for such situations, it is recommended that the Trade Expansion Act of 1962 be amended in the following respects: (A) Sec. 201(b) (2) and Sec. 351(b) (1) should be augmented by adding: “provided that a specific rate of duty existing on July 1, 1934 may be converted to its ad valorem equivalent based on the value of imports of the article concerned during the calendar year 1934, and the equivalent ad valorem rate of duty thus determined may be increased by not more than 50 percent." This is quite essential to provide reasonable relief if this Section needs to be invoked on behalf of an industry like the brass mill industry whose products are largely on a specific duty basis. Taking as an example copper sheet and strip, in 1934 the average price of imports was 33 cents a pound and the duty 6.5 cents a pound. The ad valorem equivalent would be 19.7 percent. In 1967, because of inflation as well as reduction in duty, the average price of imports was 60 cents a pound and the duty 2.95 cents a pound, or an ad valorem equivalent of 4.9 percent. If the maximum 50 percent permissible increase in tariff provided by Sec. 201 (b) (2) and Sec. 351(b)(1) as presently worded had to be invoked, the allowable increase in the tariff would be 3.25 cents, and the revised tariff would be 9.75 cents, which would be only 16.2 percent on an ad valorem basis, or less than in 1934. How discriminatory this would be if this same measure of relief were granted a product on an ad valorem basis to begin with is indicated by the fact that a 50 percent increase for that product would raise the tariff to 29.55 percent as against 19.7 percent in 1934, whereas for the brass mill product in this example, the ad valorem equivalent duty would actually be lowered from the same 19.7 percent in 1934 to 16.2 percent! (B) In Sec. 301(b) (1) the words "as a result in major part of concessions granted under trade agreements" should be deleted for the same reason that it is in Sec. 301 (c) (1) and Sec. 301 (c) (2) in the proposed Trade Expansion Act of 1968. (C) To Sec. 301 (b) (2) should be added, as one of the economic factors to be taken into consideration by the Tariff Commission as relevant to injury or threatened injury to a domestic industry from increased imports, the words: "decline in normal or prospective growth." 4. For certain industries, as appears to be the accepted fact for some of our agricultural products, quotas may be the only practical approach to prevent injury from unneeded imports. Provision should therefore be made for such relief, with certain criteria stated as presumptive evidence of actual or potential injury. Such criteria might include the percentage that imports have taken of the domestic market which the industry has the capacity to serve, and a ceiling for imports which if exceeded would be economically untenable. Such criteria might be incorporated in Sec. 352 (Orderly Marketing Agreements) by appropriate amendment, or by separate legislation. 5. In any further trade negotiations carried on under the Trade Expansion Act, appropriately selected representatives from industry should be consulted while the negotiations are in progress. They should preferably participate in some manner in these negotiations. Industry representatives cannot be of any practical service if they are not kept informed of the give and take during the negotiations. Our attitude in this respect should be as realistic and business-like as that of our foreign trading partners. 6. Prompt favorable action is needed in the amendment of the Antidumping Act of 1921, such as is proposed in H.R. 408 (Mr. Conte) and a number of identical bills which have been introduced in the House (similar to S. 1726 by Mr. Hartke and co-sponsors in the Senate). Such action is quite necessary to provide effective relief from the unfair trade practice of dumping, within the spirit and intent of the Antidumping Act of 1921. 7. Finally and most important, immediate action needs to be taken on H. Con. Res. 447 (companion resolution to S. Con. Res. 38) which states in effect that it is the sense of the Congress that the International Antidumping Code be sub mitted to Senate for advice and consent and that its provisions become effective in the United States only at the time specified by appropriate legislation. As July 1, 1968 is the date set for the International Antidumping Code to go into effect, there is only a very short time left to avoid the confusion bordering on chaos which would result from the conflict between the Antidumping Act of 1921 and the International Antidumping Code. MEMBER COMPANIES, COPPER & BRASS FABRICATORS COUNCIL, INC. Anaconda American Brass Company, 414 Meadow Street, Waterbury, Connecticut 06702. Bohn Aluminum & Brass Company, 1400 Lafayette Building, Detroit, Michigan 48226. Bridgeport Brass Company, 30 Grant Street, Bridgeport, Connecticut 06602. Bridgeport Rolling Mills Company, Bridgeport, Connecticut 06602. The Bristol Brass Corporation, 580 Broad Street, Bristol, Connecticut 06010. Cerro Copper & Brass Company, Division of Cerro Corporation, 16600 St. Clair Avenue, Cleveland, Ohio 44110. Chase Brass & Copper Co., Incorporated, Tower East Building, 20600 Chagrin Boulevard, Cleveland, Ohio 44122. Chicago Extruded Metals Company, 1821 South 54th Street, Cicero, Illinois 60650. Hussey Metals Division, Copper Range Company, Leetsdale, Pennsylvania 15056. The Miller Company, 99 Center Street, Meriden, Connecticut 06450. The National Copper & Smelting Co., 6075 Cochran Road, Solon, Ohio 44139. Olin Mathieson Chemical Corporation, Brass Division, East Alton, Illinois 62024. Penn Brass & Copper Co., 3837 West 20th Street, Erie, Pennsylvania 16505. Phelps Dodge Copper Products Corporation, 300 Park Avenue, New York New York 10022. Precision Tube Company, Inc., North Wales, Pennsylvania 19454. Reading Tube Co., 350 Fifth Avenue, Empire State Building, New York, New York 10001. Revere Copper and Brass Incorporated, 230 Park Avenue, New York, New York 10017. Scovill Manufacturing Company, 99 Mill Street, Waterbury, Connecticut 06720. Triangle Conduit & Cable Co., Inc., New Brunswick, New Jersey 08903. Tubing Division, Robintech Incorporated, Mount Kisco, New York 10549. Volco Brass & Copper Company Kenilworth, New Jersey 07033. Waterbury Rolling Mills, Inc., East Aurora Street, Waterbury, Connecticut 06720. |