The Committee for Reciprocity Information believes it is desirable to indicate the types of information and data that are ordinarily most helpful to the inter departmental trade-agreements organization in the performance of its functions. This applies to the presentation of oral views with regard to current trade-agreement negotiations, as well as to the presentation of problems that may arise in connection with existing trade agreements.

Written briefs are submitted to the Committee in 15 copies (one of which is under oath) and in accordance with a few other simple rules which are stated in announcements. Written briefs submitted to the Committee, except material offered and accepted in confidence, are available for inspection by interested persons. Material offered in confidence should be prepared on separate sheets and clearly marked "For Official Use Only of Committee for Reciprocity Information." All information submitted to the Committee by interested parties is transmitted to the interdepartmental trade-agreements organization.

The Committee welcomes the full presentation of oral testimony but it is preferable that such testimony should expand or supplement rather than merely repeat data previously presented in writing, except as relevant to additional views presented. Also, the hearings provide an opportunity to cover developments which have taken place since a brief was submitted, or to present information not easily susceptible of explanation in writing. It is particularly desirable that detailed or voluminous statistical material be presented in writing rather than orally.

The Committee desires to discourage the presentation of irrelevant information. The emphasis should be on presentation of factual information and views pertinent to the specific matters under consideration. All-inclusive requests and general protests are unlikely to prove helpful.

DATA WITH RESPECT TO IMPORT ITEMS

As regards possible concessions by the United States on import articles, it is suggested that in any representation in behalf of domestic industry, attention should be given to:

1. The precise interest which the writer or witness has in the proposed negotiations; the organization or concern which he represents, its location, productive capacity, character, and quantity of output, and importance in the given industry. 2. The character of the domestic industry concerned; uses of its products; general location of plants; the number and character of the employees, in terms of temporary or permanent character of jobs, the degree of specialization of skills, movement in and out of industry, dependence on local job resources; the quantity and value of the annual output; the position of the industry in the national business structure; and available information concerning costs in the domestic industry in comparison with costs in the principal competing foreign countries. In the latter connection, comparative data on labor costs should relate primarily to cost per unit of output (resulting from the combination of the productivity of labor and rates of wages). Information regarding wages alone, independent of productivity, is of only limited value.

3. The extent and character of the competition to which the domestic industry has been or may be subjected by reasons of imports, indicating by description and by price brackets, if possible, the precise products in which competition has chiefly been encountered or is to be foreseen. If competition is localized, the markets in which competition is expected might also be indicated. Since there is a possibility that, to a limited extent, existing tariff items may be subclassified with a view to distinguishing those types or classes of the general commodity which differ as regards the extent of foreign competition; suggestions for possible subclassification may also be made. These suggestions should, however, be for subclassifications along natural lines recognized in the trade and should not involve excessively fine distinctions.

4. Data on sources of past imports, and prospective changes in sources if the United States duties should be reduced.

5. Data on consumption of the products involved, including trends of past consumption and factors likely to influence future consumption.

6. The experience of the industry with export markets.

7. Particularly useful are details of a kind not revealed by official statistics and known only within the trade, such as those relating to types and grades produced or imported, style trends, recent inventions, improvements in processes, and the like.

8. In those special cases where claim is made that the national security is involved in consideration of the tariff on any item, full substantiating data should be submitted.

9. If the interest of the domestic industry is in obtaining a reduction of the United States tariff on a product which it utilizes in its operations, it should submit, in addition to such information referred to in the final paragraph of this section as may be pertinent to its particular situation, full information regarding the nature and extent of the impediment to its operations resulting from the existing tariff on the item under reference.

Importers or others desiring a reduction in the United States duty on any commodity should submit data relating to domestic industry and to imports similar to that suggested in the preceding paragraphs and should also furnish information often not readily available from published sources, regarding conditions and trends in the foreign industry as affecting imports into the United States. Where appropriate, information should be submitted with regard to competition between imports and the nearest comparable domestic product, including the extent to which they are actually interchangeable, taking into account grade and quality, consumer preferences for foreign or domestic specialties, seasonality in imports or domestic production, and other pertinent factors. The number and character of employees, whether skilled or unskilled, engaged in processing and distributing imports might also be indicated.

DATA WITH RESPECT TO EXPORT ITEMS

Representations concerning concessions to be requested of a foreign government should include information, as far as possible, on the following points:

1. The precise interest which the writer or witness has in the proposed negotiations; the organization or concern which he represents, its location, capacity, character and quantity of output, production and sales for export, importance in the given industry, etc.

2. The character of the domestic industry concerned; uses of its products; general location of its plants; the number and character of employees; the quantity and value of annual output; and the position of the industry in the national business structure.

3. Description of commodities for which concessions are sought.

4. Production of commodities itemized under paragraph 3 of this section and percent exported. (Give figures for the individual firm and the domestic industry as a whole.)

5. Sales experience of the concern, and of the industry generally, in the foreign country with which a trade agreement is contemplated.

6. Information regarding the development of competing industry in foreign market; whether development is part of foreign governmental plan, together with all available information regarding such plan.

7. Full information concerning the trade barriers from which relief is requested, with suggestions as to specific changes desired, and with particular reference, where applicable, to the following:

(a) Import duties and other charges (give, when possible, tariff classification, item numbers, nomenclature, and approximate ad valorem equivalent of specific duties, methods of valuation, basis of duty, kind of duty, fines, et cetera.) (b) Tariff preferences (indicate nature, extent, and effect of preference). (c) Quantitative restrictions (quotas).

(d) Clearing, barter, or other agreements involving discrimination against the United States.

(e) Import licensing requirements.

(f) Exchange control restrictions.

(g) Government monopolies or other forms of state trading.

(h) Customs regulations (marking requirements, documentation, and other formalities).

8. Supporting data available to the trade, such as:

(a) The competitive situation in the foreign market, both with respect to the competition with domestic production and with imports from sources other than the United States.

(b) Peculiar marketing or other conditions such as those involved in cartel organizations, government subsidy to domestic production, or other similar factors. 9. In the case of countries with which our trade was interrupted by the war, it would in general be desirable to base requests for concessions on both prewar and postwar trading experience.

The CHAIRMAN. The next witness is the Honorable Ezra Taft Benson, Secretary of Agriculture.

STATEMENT OF HON. EZRA TAFT BENSON, SECRETARY OF AGRICULTURE, ACCOMPANIED BY TRUE D. MORSE, UNDER SECRETARY; EARL L. BUTZ, ASSISTANT SECRETARY; WILLIAM LODWICK, DIRECTOR OF FOREIGN AGRICULTURAL SERVICE; DON PAARLBERG, ASSISTANT TO THE SECRETARY; AND EDWARD M. SHULMAN, ASSISTANT SOLICITOR

The CHAIRMAN. The Chair is advised that Secretary Benson is accompanied by the following officials, who are present with him at the witness table: True D. Morse, Under Secretary; Earl L. Butz, Assistant Secretary; William Lodwick, Director of Foreign Agricultural Service; and Don Paarlberg, assistant to the Secretary. Is that correct?

Secretary BENSON. Yes. And Mr. Shulman is here; the Assistant Solicitor.

The CHAIRMAN. And Mr. Shulman, Assistant Solicitor of the Department of Agriculture?

Secretary BENSON. That is right.

The CHAIRMAN. Mr. Secretary, you are at liberty to confer with your associates or refer any questions as to details to them that you may desire.

Secretary BENSON. Thank you, Mr. Chairman.

The CHAIRMAN. Mr. Secretary, the committee is glad to extend to you a most cordial welcome. We appreciate your appearance. You are now recognized for your statement.

Mr. REED. Mr. Chairman, I wish to concur in your remarks.
Secretary BENSON. Thank you very much.

Mr. Chairman and members of the committee, I have a brief statement. If I may, I would like to read that first.

The CHAIRMAN. Without objection, you may complete your statement without interruption, Mr. Secretary.

Secretary BENSON. Thank you very much.

I am pleased to have the opportunity to appear before this committee in support of the extension of the authority of the President to enter into trade agreements for the period of 3 years from June 12, 1955, until the close of June 30, 1958.

General advantages of specialization and trade: The prosperity of the United States has been built largely upon specialization. We have progressed far from Colonial days, when each American family had to produce its own needs. Today practically every person is a specialist, producing only a few goods or services and buying all the other things he needs.

The modern farmer is a specialist. He is, you might say, a manufacturer. He combines his land, personal, family, and hired labor; capital; seed, fertilizer, et cetera; and produces products for the market. He uses increasing amounts of machinery and other capital and he concentrates his efforts on a few commodities which are suited to his particular farm. This has led to specialized areas: cotton and tobacco in the Southeast, corn and hogs in the Midwest, potatoes in Idaho, and Aroostook County, Maine, and so on.

Clearly, this specialization would have been impossible without trade. We have been able to specialize because the producer could

find markets for his goods. Without our borders, we have fostered the development of trade between the 48 States.

The United States is the largest single area in the world within which trade is relatively unrestricted. This policy has helped farmers as well as wage earners and businessmen.

As a nation we have gained from trade with other nations. We have gained by importing some goods that could be produced more economically abroad. And we need foreign markets for many American goods, including the products of American farmers.

Agriculture's interest in exports: American agriculture has a vital interest in foreign trade and in policy affecting that trade. In recent years the production of 30 to 50 million acres of our cropland has going to foreign consumers. The prosperity of our agricultural economy is significantly affected by this important foreign market.

At the present time approximately 10 percent of our agricultural income is derived from exports. On a value basis our farm exports totaled almost $2.4 billion during the months of January through October 1954. Thus we can conservatively estimate that these exports for the full calendar year 1954 will approximate $3 billion.

While all producers of farm commodities gain from foreign marketings, producers of some commodities depend more heavily on exports. United States exports in the most recent marketing year, 1953-54, accounted for 45 percent of our rice crop, 26 percent of the tobacco crop, 24 percent of the cotton crop, 21 percent of the soybean crop, almost 19 percent of the wheat crop, and 18 percent of the lard production. Other commodities for which a sizable share of production is exported are inedible tallow and greases, 45 percent; grain sorghums, 14 percent; and dried prunes, 29 percent.

Exporting these large shares of farm production helps to minimize the difficulties that result from burdensome surpluses and acreage cutbacks. It is with good reason that we are doing our utmost to hold and expand the foreign market for such commodities.

Agriculture's stake in industrial exports: To have a prosperous agriculture in the United States we also must have industry prospering and expanding. This will assure us of more laborers being employed, for more house per week, which in turn will mean more take-home pay. These people will buy more food, thus exerting an upward pressure on demand for farm products.

We in agriculture do want American industry to be prosperous, to expand and hence to employ more laborers at higher wages. Increased exports of industrial products in recent years have strengthened America's industrial economy considerably. This has been beneficial to the American farmers because it has assured laborers in industry good wages. These earnings have been used to maintain high levels of consumption of such farm products as beef, dairy products, fruits, and vegetables, as well as many others.

The legislation which we are now discussing intends to provide for expanding foreign markets for both industrial and agricultural products of the United States.

Consumer interest in foreign trade: United States foreign trade, like our domestic trade, permits a more economical use of our resources by promoting specialization of production. Taking the economy as a whole, we enjoy higher real wage levels and living standards with foreign trade than would be possible if we relied solely on supplies and markets within our own borders.

The economic advantage of foreign trade is very clear when we buy abroad things which we do not produce in the United States. Examples are coffee, bananas, cocoa, tea, and raw rubber. To provide substitutes for these imports within our own country would entail a most uneconomical use of our resources. At the same time we would lose the advantage of obtaining these imports in exchange for the products which we produce with greater efficiency than most other countries. From this it can be seen that because of foreign trade our American consumers do enjoy a greater diversity of products, as well as a more bountiful supply of both farm and nonfarm products.

Consumers should also be interested in the tariff structure. High tariffs reduce the quantity of American exports. Because typical American agricultural and industrial exports are the products of some of the most efficient producers in the world, other countries are anxious to buy more from us. But their purchases in this country are limited by their dollar earnings. Increasing the effective demand for United States exports depends upon increasing the supply of dollars abroad.

One important way of doing this is to increase our imports. Trade is a two-way proposition. The vast demand for American products abroad assures us that most dollars spent in foreign countries will come back here in one way or another in the form of increased orders for United States exports. Thus if we want to continue exporting sizable quantities of both farm and nonfarm products we must carefully review our tariff rates to see that they do not tend to block the free flow of goods from the United States.

Why continue the Trade Agreements Act? I have already stated several specific reasons why it would be advantageous to have this act continued. There are other pertinent factors which I wish to call briefly to your attention.

The bill for the extension of the Trade Agreements Act has received serious study on the part of a bipartisan commission established by Congress. The Commission sought the best available sources of information. The result was a recommendation that the United States undertake gradual reduction of trade barriers in cooperation with friendly foreign countries. The bill reflects the thinking of all segments of our economy inasmuch as the members of the Commission represent the various segments. This bill is supported by major farm organizations.

In the spring of 1954, a Presidential agricultural trade mission. was appointed to inquire into the problems confronting the United States in the exporting of agricultural products and the problems facing foreign nations in exporting to us. One of the mission's important recommendations was to extend the Reciprocal Trade Agreements Act for not less than a 3-year period. The mission reported that this would facilitate agricultural exports by the removal of the uncertainty of the United States position with reference to promoting freer trade.

I wish to stress my wholehearted agreement on this point: It is highly desirable to have more than the customary 1-year extension of this act. Countries which are interested in promoting foreign trade can plan their programs with some assurance of continuing international trade agreements.

I also wish to stress the importance to agriculture of a healthy restoration of foreign trade and a gradual reduction in trade barriers.