I am happy to express my appreciation for this opportunity to present to your important committee our views on the Trade Agreements Extension Act which you are considering. Many of your members are present who have heard me explain in previous years before your committee the long-time support which our organization has given to the bills introduced to carry out the objectives of reciprocal trade agreements. As an outcome of our 59th annual national convention, held October 1954 in Richmond, Va., the following resolution authorizes me to appear before you in favor of this legislation which we hope will be enacted in this 1st session of the 84th Congress: Whereas the continuation of the cold war has intensified the effects of the disruption of world trade brought on by World War II, thus increasing the economic problems and difficulties in nations friendly to our country; and Whereas these problems and difficulties will take many years for solution even though a reasonable accommodation may be reached in the cold war; and Whereas such countries and ours are agreed that trade, not aid, should supplant as rapidly as possible the grants-in-aid which have been made under the mutual security program; and Whereas sales of the products and produce of our friendly world neighbors will provide them with the dollars to pay for the products and agricultural commodities which they must import from us and which we are eager to export: Now, therefore, be it Resolved, That the Jewish War Veterans of the United States of America in 59th Annual National Convention assembled in Richmond, Va., October 13-17, 1954, urge a 3-year extension of the Reciprocal Trade Agreements Act in a form which will make it easy to intensify activities under that act; and be it further Resolved, That offshore procurement be expanded in every way possible so that friendly nations may earn the dollars which will decrease the need for loans and grants and make aid by trade a reality. You have had before you the members of the President's Cabinet and other witnesses, experts in foreign trade, in the economics of our country and of the world who have presented innumerable sound and forceful facts which support the sentiments expressed in our resolution. The bill before you is moderate in its language and limits the freedom of the executive department rather closely. Please note that the first resolve clause of our resolution, urges a 3-year extension of the Reciprocal Trade Agreements Act in a form which will make it easy to intensify activities under that act. The peril-point provision currently in the law, certainly tends to slow down negotiations for agreements and makes them more difficult. The escape clause tends to vitiate the value of the agreements which concluded because the probability of complaints and the uncertainty created by possible adverse decisions, halts planning of activities by foreign producers who might otherwise proceed with merchandising activities for their products in our markets. So far as the escape-clause investigations are concerned, the January 7, 1955, report of the United States Tariff Commission enumerates the results of 59 applications since the clause went into effect. Of these applications, 3 are still pending, 3 investigations were dismissed at applicant's request; 2 were terminated unanimously June 1954 without formal findings. Fourteen applications were dismissed after preliminary inquiry under procedure provided for in executive order. Of these, 8 were unanimously dismissed; on 3, the Commission split 3 to 3, and on 3 the Commission split 5 to 1, 4 to 2, and 4 to 2. On 22 investigations the Commission decided against escape action and no reports were sent to the President; on 12, the Commission decided in favor of escape action and the report was sent to the President, and on 3 the vote of the Commission was evenly divided and the report was sent to the President. Thus, in response to 5 applications, the Tariff Commission has been willing only 15 times, to send reports to the President calling for consideration of escape action. In only five cases, did the President decide to invoke the escape clause. Three times it was President Truman and two times it was President Eisenhower. In 10 cases, the President declined to invoke the escape clause. Twice it was President Truman who was involved and eight times President Eisenhower declined to accept the recommendations of the Tariff Commission. This record of escape-clause use certainly does not justify the implication that reciprocal trade agreements are ruining our industry in wholesale fashion. Over a period of many years, 2 painstaking Presidents, solicitous for the welfare of our workers and our industries, and mindful of our Nation's security needs, have decided only 5 times after weighing all the facts and the recommendations sent to the White House by the Tariff Commission, to invoke the escape clause. Furthermore, only about 50 products, many of them relatively unimportant, are involved in the complaints. As a war veterans' organization-incidentally, the Jewish War Veterans are, today, the oldest active war veterans' organization in the country one of our major interests in this legislation is the defense and security of our country. The promotion of foreign trade brings to us numerous materials which are essential to our defense and which are unavailable or in limited supply in our own country. These products and others which can find a market in our country under the concessions of the reciprocal trade agreements, provide the means to pay for our exports to those countries and thereby strengthen our economy which is the basic foundation of our defense capacity. Likewise, the economies of the countries with which we make these agreements are strengthened by their ability to buy from and sell to us, the things they need; thereby, they are helped to resist the infiltrations and subversive activities of the Communist regimes in Russia and its satellites. Further, their strengthened economies permit them to build their military defenses against potential aggression by Soviet Russia and its satellites. To the extent that our neighbors of the free world can be a bastion of defense, politically, economically, and militarily, against the only potential aggressor whom we might be called upon to face, our own country can lessen the cost of its own Military Establishment. We can also cut down on grants-in-aid for military and economic needs of our allies. Most of all, these beneficial results of the reciprocal trade agreements program can be a very important factor in maintaining peace because it will deter Russian aggression which could lead to war. Many of you sitting on this committee as Members of Congress have, over the years, approved the spending of billions of dollars for the costs of war and its consequences. When you consider those huge dollar costs and, even more costly, the thousands of dead and disabled, the complaints that have been made about reciprocal trade agreements will fall into perspective. Methods can be found to allay the problems which create the justifiable complaints without jeopardizing the defense and security of our country. May I respectfully urge you to enact as promptly as possible the legislation you are considering in a form which will make it easy to intensify activities under that act. The CHAIRMAN. Does that complete your statement, Mr. Weitzer? Mr. WEITZER. Yes, sir. If I may stick my neck out and offer a comment on the question which was raised here earlier this morning about this problem of industries being put out of business, and particularly the difficulties of the coal business, I would like to state this: I wonder what is going to happen 10 years from now when atomic energy takes away a big part of this market? The CHAIRMAN. Does that complete your statement? Mr. WEITZER. Yes, sir. The CHAIRMAN. We thank you for your appearance and the information given the committee. Are there any questions? If not, we thank you, sir, for your presence. (The following statement was submitted for the record:) STATEMENT ON H. R. 1, 84TH CONGRESS, BY JOHN R. HOLDEN, NATIONAL LEGISLATIVE AMVETS, a congressionally chartered organization composed exclusively of World War II and Korean conflict veterans, appreciate the opportunity to speak in support of the provisions of H. R. 1. Having witnessed at firsthand during our service on the farflung battlefronts of the world, the misery, privation, suffering, and starvation caused by war, we believe it is our obligation to speak and our right to be heard on this important issue which obviously affects the national security and world peace. AMVETS wholeheartedly supports the principle of gradual and selective reductions of United States tariffs and the modification of other restrictions on our trade with foreign countries. We further support the belief that our trade policy is inescapably linked to this Nation's foreign policy. The survival of free nations depends to a great extent on whether the United States is able to keep allies who are strong-allies who are willing to cooperate in strengthening the free world and resisting Communist aggression. Our tariff policy affects the economic strength of our allies. Their economic strength affects their military strength and political stability-in short, their value as free-world allies. We find it extremely difficult to reconcile the action of the 83d Congress on this question with the repeated insistence of some congressional leaders that strategic trade between the free world and the Communist bloc must be curtailed at all costs. We think it timely to point out that some of the free nations already appear to be expanding their trade with Iron Curtain countries, because of the difficulty they have encountered in developing mutually beneficial reciprocal trade agreements with our own country. We believe further that the Communist bloc will exploit any opportunities for expanding their international trade which the free world provides them. Consequently, we strongly urge that this committee give serious consideration to the grave problems of United States security and prosperity involved in our international economic policy. The measure before you today will permit the United States to take the initiative in strengthening the community of economic and political interest between our allies and ourselves. It would create less indecision about our trade policy by extending the President's trade agreements authority for 3 more years. It would permit modification of many of the present technical regulations which tend to hamper and restrict the expansion of our international trade. In short, it will permit the United States to assume the responsibility of leadership in liberalizing free-world trade. We therefore urge that this committee report favorably H. R. 1. The CHAIRMAN. The next witness on the calendar is Mr. Robert R. Nathan, chairman, executive committee, Americans for Democratic Action. Mr. Nathan, will you please give your name, address, and the capacity in which you appear, for the record? STATEMENT OF ROBERT R. NATHAN, CHAIRMAN, EXECUTIVE COMMITTEE, AMERICANS FOR DEMOCRATIC ACTION Mr. NATHAN. Yes, sir. Mr. Chairman and members of the committee, my name is Robert R. Nathan. My offices are here in Washington, D. C. I am appearing today as chairman of the executive committee of the Americans for Democratic Action. The CHAIRMAN. You are recognized and may proceed to present your prepared statement without interruption. Mr. NATHAN. Thank you, sir. I appreciate the opportunity to present to you ADA's views in support of the trade agreements program, in general, and, specifically, H. R. 1 which we consider a necessary step to further the position of the United States in world trade. As an organization pledged to policies for strengthening the free world, to enhance the welfare of free people and their ability to resist Communist aggression, ADA recognizes the fundamental importance of international trade and the central role the United States must play in world trade. This country is the greatest producer and consumer of goods, and what is in the long run good for our economy also in the long run benefits the free world. In recognizing this, ADA, at its 1954 convention held here in Washington declared its support of— all measures which would lessen the restrictions on international trade *** and as a minimum the continuation of the present reciprocal trade agreements legislation without peril-point or escape clauses. That is a quote from the convention platform. We take this position not out of altruism or compassion for the rest of the world, but because we believe it is essential to the well-being of the United States. I will not take the committee's time to review the well-known and impressive statistics of United States foreign trade. Suffice it to say that an important part of the United States economy, including agriculture and commerce as well as industry, depend in significant degree on their business abroad, and our customers abroad depend on us as a source of supply. By the same token, in many essential respects we depend on foreign sources of goods which we need, cannot produce, and must therefore import. Moreover, it is by now recognized as axiomatic that our exports and overseas investments can be maintained only if we buy from abroad. Otherwise, we are giving away the goods we export, as we have done so extensively in the past. Today we have an overriding reason of self-interest in expanding trade. Many of our free world partners depend for their very existence on international trade. We must help in every way we can to encourage many-sided trade among free nations or see them driven by necessity to trade increasingly with the Soviet bloc. Limitations on trade opportunities will retard economic development of many countries. Japan is the most urgent example and it is 57600-55-pt. 1- -52 encouraging that H. R. 1 contains special provisions to bring Japan further into the trade orbit of the free world. The reciprocal trade program has proved its worth over 20 years. It seems strange now that it should be fighting for its life. It has expanded not only our trade but our friendships. It has helped United States industry and agriculture as well as United States foreign relationships. The General Agreement on Tariffs and Trade has been successful, and is now being negotiated on an expanded, permanent basis. Now we have an opportunity to move ahead with this legislation or at least maintain our position. The conditions of international trade are in many respects like the . conditions of national trade. Competition and the constant shifts of labor and materials to expand and improve production are as necessary in the one as in the other. In this competition the United States has been spectacularly successful. Just as in our national economic policies we seek to maximize our national production, in our international economic policies we seek the overall benefit to the United States economy. In general, United States industry and agriculture, in spite of higher wages they pay, continue to enjoy a competitive advantage because of their unapproached efficiency. But because competition bears heavily on some competitors, those perhaps less favorably situated or less efficient, the Trade Agreements Act wisely provides for gradual reductions in tariffs, and limits the extent of the reductions permitted within a specified time. It is clear that the steady progress toward lowering trade barriers has not proved incompatible with an enormous increase in national production over the past 20 years, while imports and exports have risen greatly. One of the principal barriers which remains to be removed is the uncertainty as to United States foreign trade policy and programs which discourage foreign producers from making long-term commitments for distribution and servicing necessary to enable them to serve the United States market adequately. I have had the privilege of representing both American exporters and foreign governments. Currently, my firm is engaged as economic adviser to the Government of the Union of Burma. We have represented other governments. I know from my own experience in representing American exporters that uncertainties in importing countries can be as effective as tariffs in closing international markets. Unless the man who is selling has an idea of continuity and what the terms of his sales are going to be for a considerable period of time, he is not going to make long-term commitments effectively. For this reason, ADA recommends that the Trade Agreements Act be made a permanent part of our tariff laws and that the peril point and escape clauses be eliminated so that nations with whom we trade will have no doubt that it will continue to be our policy to find and effectuate new opportunities to expand trade, both reciprocally and unilaterally. It is worth noting that nothing has been accomplished under the temporary authority, regretfully, in the past 2 years. We agree that limits should continue to be set on the permissible extent of tariff reductions, so that American producers will also be able to plan with assurance and so that the impact will be gradual. bound to come, but we must face it and recognize it. Some impact is |