Mr. CURTIS. It may be freezing it at that point. Of course, the projections are that the overall industry production will increase which would benefit both Canada and the United States.

Mr. STUBBLEFIELD. Would not the $240 million production figure tend to preclude any importation of American products into Canada for the next 3 years?

Mr. CURTIS. No, I do not think so. At least according to the testimony and this is on all sides they do anticipate growth. There is a growth factor. The thing is we will not participate to the same percentage in this increase of that new market.

Mr. STUBBLEFIELD. That is the point I am making. They would not participate until this $240 million figure was exceeded in sales and production; is that right?

Mr. CURTIS. That is correct. Mr. STUBBLEFIELD. I thank the gentleman.

Mr. CURTIS. In essence, and I want to reiterate, I will vote for this bill because of Canadian-American relations and because of what we would be confronted with if we go backward. I am reluctantly voting for this. Again I am trying to make a record so that the administration will get back on the

track of our basic trade policies and

trade theories.

We have to stop this process, this busi

ness of bilateral agreements and industry by industry agreements which can only bring us back to the thirties and the days of the Smoot-Hawley Tariff. This is why we moved to the multilateral and most favored nation concept of trading with trade across the board and not industry by industry, product by product. If we ever start doing it on an industry by industry, product by product, or nation by nation basis, this is just going to

end, I regret to say, in a fiasco.

Mr. HALL. Mr. Chairman, will the gentleman yield?

Mr. CURTIS. I yield to the gentle

man.

Mr. HALL. I have a specific question based on a maker of electrical cables, or bridles, as they are called, for the car industry.

I believe this is one of the principal subcontractors or suppliers to many of the assembly line car producers before the final product rolls out for retail consumption. They use great amounts of steel. They use great amounts of copper. They manufacture these assemblies and they simply have to be put in place hooked up to the ignition, the spark plugs and the dashboard-and off they go.

These people have complained bitterly about the original agreement and the effect it has had on them as subsuppliers, both under the variable tariff agreement Canada first imposed and subsequently.

I wonder if the gentleman could answer the question as to whether this has been taken care of in the final bill, (a) from the point of view of the bridle suppliers for the assembly lines, and (b), what effect it will have on the steel producers and copper producers?

Steel is very much in argument today, as to whether there will be a strike. Although supplies have been laid up ahead of time, this seems a vital thing at a time we are asked to agree to a cartel arrangement such as this.

Mr. CURTIS. The answer, I regret to say, is that these people are not taken care of, except insofar as they can make their deals with the big three auto companies. The auto companies have it in their power to make up whatever package they want to on the 60 percent to be manufactured in Canada. This is the danger. This amounts again to government by men and not government by law.

No, there is no protection against this kind of thing, except, as I say-and this is a form of protection-as they can make deals with the big auto companies.

Mr. HALL. This first vitally affected these bridle manufacturers at the time we lost the Studebaker plant to Canada. I will not go into the merits of whether that was good, bad, or indifferent; but they objected violently to the situation in which they were placed at that time. I believe these bridle manufacturers did not supply the Studebaker organization an assembly line after they moved across the line into Canada. They do have other contracts.

As the gentleman says, if they cannot protect themselves with the big three, can

they in fact protect themselves across the line in Canada?

tainly zeroing in on this problem. Mr. CURTIS. The gentleman is cer

talking negatively. There is the other Let me say another thing. I have been side of the coin. That can be gotten by reading the administration presentation.

administration people when they came in If this were the beginning, as I told the to see me, of really a free United StatesCanada trade area, and it were across the board including paper, lumber, and all sorts of things--it would seem to me there might be some justification and it might be put in accord with GATT.

However, when it is done on a limited basis, with only one industry, important as that industry is, the situation is differ

ent.

I believe it is a true statement in the majority report, to talk about the "pluses" when they refer to the importance of this agreement to the automotive industry. This honestly is a "plus" for our big auto companies. But I believe that in the long run the United States benefits from the fact that we have thousands of little industries, small businesses, and so forth. To put them to any extent in this kind of straitjacket of a political agreement a treaty-I believe is unwise.

Mr. BRADEMAS. Mr. Chairman, will the gentleman yield?

Mr. CURTIS. I yield to the gentleman from Indiana.

Mr. BRADEMAS. I have listened again with great interest to what the gentleman had to say. I hope I represent his attitude correctly when I say he suggests that this legislation and this agreement move in the direction of bilateralism and away from multilateralism in international trade.

Mr. CURTIS. That is correct.

Mr. BRADEMAS. If the gentleman will allow me to do so, I will read just two sentences from a statement made on the 15th of July 1965 by the Honorable Michael Blumenthal, the deputy special representative for trade negotiations of our Government, in an address he delivered in Germany. He said:

All of the major industrialized countries are under pressures of various sorts or have been tempted at one time or another to depart from MFN (most favored nation). We must resist this temptation. We must be particularly careful not to vitiate the MFN principle in our search for expedient solutions to immediate problems.

Would the gentleman from Missouri agree with me that this legislation does fly in the face of the kind of declaration of principle by a representative of our Government that I have just read?

Mr. CURTIS. Yes. And we are in the process of diagnosing schizophrenia in the administration.

Mr. BRADEMAS. I thank the gentleman.

Mr. CURTIS. Mr. Chairman, the leg

islation (H.R. 9042) implementing the Canada-United States Automotive Products Agreement has many flaws. Though in a sense it can be considered a creative

and bold solution to a problem which

seemed difficult at best to resolve, its faults should make us seriously question its advisability.

Briefly stated, the root cause of the Automotive Products Agreement is the provision in section 303 of the Tariff Act of 1930, which allows for the autoduties on imports to the United States matic imposition of countervailing which have been the subject of subsidy

or bounty.

AN IMPERFECT SOLUTION TO A REAL PROBLEM

In this case, the Canadian Government had subsidized by a complex tariff rebate scheme, the export of Canadian auto parts to the United States. A U.S. parts maker complained that this subsidization of exports was in violation of section 303 of the 1930 Tariff Act. Reluctant to impose the countervailing duty authorized by this act, the U.S. Government argued that any U.S. retaliation against the Canadian duty would result in would result in Canadian counterretaliation, and thus a Canada-United States trade war.

That is, almost beyond question, a specious argument. The long history of Canada-United States relations shows that even the hottest disputes can be solved in normal ways. I do not think it at all unlikely that the dispute about the Canadian scheme to encourage auto parts exports could have been settled without resort to this truly extraordinary and troublesome trading arrangement. U.S. officials give themselves too little credit in claiming that this device was the way to resolve the rebate plan dilemma.

For the sake of perspective, however, I want to state that the Canada-United States agreement is forward looking in that it has tried to take account of and satisfy one of Canada's oldest and most important economic problems: How to achieve an economic automotive industry. U.S. officials could, nonetheless,

have taken an even bolder and more enlightened approach to the problems of Canadian industry. They need not have discriminated against all other United States and Canadian industries by giving special treatment to automobiles. They could have incorporated the automotive products agreement into a larger plan to gradually create true free trade between Canada and the United States. They could have taken this opportunity to schedule movement toward a true free trade area using the automotive agreement as a beachhead for the

effort.

The views of the Republican members of the Ways and Means Committee, submitted independently in the committee report on this bill, very well explain our objections to it.

INTERNATIONAL TRADE POLICY IMPLICATIONS

I would like to focus here, however, on an aspect of the bill which is very important to me as one of the four congressional members of the U.S. delegation for trade negotiations. This is the group, headed by Governor Herter, the President's Special Representative for Trade Negotiations, which is responsible for conducting trade negotiations under the General Agreement on Tariffs and Trade (GATT). It is in relation to the U.S. commitment to trade expansion and our deep involvement in the effort to find sound ways to help less-developed countries grow that the Canada-United States agreement and this legislation can be most fundamentally criticized.

The United States has since the beginning of the reciprocal trade expansion effort in 1934 championed the cause of fairer or freer trade on a multilateral, reciprocal, nondiscriminatory basis. We have led the effort to end special, bilateral trade pacts. We have opposed the creation of spheres of trading influence in which one developed country establishes preferential trade and payments ties with weaker, less-developed countries We have accepted the formation of common market and free trade area arrangements with hesitation on grounds of their overriding political importance and with assurances that they would be outwardlooking in their trading relationships. We have opposed the special barter-trade devices used by the Soviet Union and other Communist nations to tie less-developed countries to them through trade.

WORLD TRADE AND THE DEVELOPING COUNTRIES

But the most recent, and in many ways the most convincing, proposals that would jeopardize the principles of world trade we have established are the proposals of the United Nations Conference on Trade and Development (UNCTAD).

About 80 less-developed countries brought about the 1964 United Nations Conference on Trade and Development. Many of the recommendations of this

conference run counter both to traditional trade policies espoused by the United States and to what we believe is sound economic principle. U.S. officials have both during UNCTAD and since in meetings at New York and in Geneva-defended U.S. policy while trying to seek remedies for the legitimate

grievances of the developing countries. Our position at UNCTAD should not be one of defending an old trade order, but rather one of developing sound economic principles which are rooted in basic U.S. trade policy, to help the developing nations, and most importantly to insure that all help is based on sound international trade theory. Thus, we have opposed many of the unrealistic restrictive, and costly proposals of the UNCTAD.

When viewed in this light the agreement creating special trading arrangements for a single industry exclusive to Canada and the United States takes on an invidious hue. It is a preferential agreement. It gives the developing countries grounds to ask us to sanction special arrangements in their favor.

OBTAINING GATT APPROVAL

It is quite clear that the CanadaUnited States agreement will have serious and harmful implications that will make our dealings with developing countries more difficult. Apart from this consideration, however, is the problem of obtaining approval for the CanadaUnited States agreement under the terms of the GATT.

The fact is that the Canada-United States agreement is not in accord with the fair trade principles of the GATT. The United States will have to obtain a waiver from our fellow GATT participants in order to remain in good standing. This is a procedure frequently undertaken by other countries in the past, and the United States has given its approval to these waivers for others. Thus, it is reasonable to expect that we in turn will receive a waiver. But we may be paying a high price.

The expectation we will receive a waiver is supported by the fact that the Canada-United States agreement has the backing of Mr. Eric Wyndham-White, the respected Director General of GATT. In negotiating this agreement the United States sought and obtained Mr. Wyndham-White's advice and somewhat reluctant approval.

At a press conference in the United States on April 29, this year, Mr. Wyndham-White said:

The implementation of the agreement by the United States would involve at least a technical departure from the most favored nation clause in the sense that it would provide for free entry for Canada whilst it would maintain the duty for automobiles from other sources of supply. I say technical because as I understand the case, as presented recently by the United States in the GATT, this departure would not in fact, owing to the special circumstances of the trade, have practices of other parties to the GATT. any practical trade effects on the exporting

Then Mr. Wyndham-White questioned the Canada-United States agreement from the point of view of the U.S. trade principles I have cited above, and in light of our bargaining position vis-a-vis

the developing countries. He said:

Coming at a time when the whole question of preferences and the most favored nation clause is very much debated, it is bound to be used as an argument by those who have accused the United States of a very great rigidity when it comes to the preferences which other people are interested in, compared with perhaps a certain relaxed attitude pared with perhaps a certain relaxed attitude

when it comes to a departure from the most favored nation clause when it is a question of accommodating a U.S. policy.

Then Mr. Wyndham-White commented:

Precedents are dangerous things to establish. Perhaps that was one of the thoughts that was moving through the back of my mind when I advised that there are other ways of dealing with this problem.

NEED FOR FULL CONSIDERATION

I have announced my intention to vote for this bill, but only with hesitation. I would only ask that we consider thoroughly the international trade implications of the bill during our discussions of it.

Mr. MILLS. Mr. Chairman, I yield 15 minutes to the distinguished gentlewoman from Michigan [Mrs. GRIFFITHS).

Mrs. GRIFFITHS. Mr. Chairman, I would like to say to the gentleman who preceded me that there are two kinds of cartels-those trade agreements which benefit us are good cartels and those trade agreements which benefit others can be bad cartels, the latter are usually of European origin.

I would like to say immediately, while it is true that this is a bilateral trade agreement and not multilateral, applying to all countries, this is a good policy in this case, just as the Coal and Steel Community of Europe was good policy or the European Economic Community was good policy for them. We should not deprive ourselves of this opportunity to extend our own trading partners, particularly in this case where 90 percent of all the Canadian automobile plants are owned by U.S. companies and they are only a few miles apart. Economically it should be one industry. I feel that the State Department is really to be congratulated on their treaty.

I would like to say further it would have been exceedingly difficult for the President to have come to Congress and said this, this, and this is what I will agree to and nothing else and then ask our permission to make that agreement. I think the President did it in the only way he could; he had a right to do it that way. You do not advise in advance what you will settle for.

Now, having said something nice about the State Department, which I really feel is going a long way, I am glad that they negotiated the Canadian auto tariff agreement. I think it is forwardlooking and shows understanding of the problems of Canada and of industry, but it goes further than that, Mr. Chairman. It also shows that the State Department, when pressed, can even try a new method for solving an old problem; and proteclem. Every country, whether fully detion, Mr. Chairman, is an old, old probveloped or developing, views with consternation the importation of any large quantity of foreign goods but regards as its rightful due the exportation of its

own goods.

The remedies against the imports are numerous, and most of them have been at one time or another tried by every nation. Thus Canada tried the duty remission plan on auto parts. Some have suggested that our answer should have been countervailing duties and an appeal

to GATT or, in the final analysis, the increase of tariffs against Canada's products. Each of these remedies is old; and each of these remedies diminishes us and Canada. We, who grew to economic greatness because of our vast free trade area, which gave us access to raw ma

terials without tariff duties and customers who paid no tariff duties-certainly we realize that at this late point in the 20th century we as the leading Nation of the world, cannot say to our closest neighbor and one of our best customers, "Give us complete access to your market on our terms or you cannot sell us any

thing."

On the other hand, Canada had a choice of many of the remedies than this

agreement. She could have made this same deal with the European Common Market. And certainly it is not too much to point out that most of the automotive plants in the Common Market are owned by the same people who own our own plants. She could have made this deal by setting up her own industry, as Brazil

and Mexico have gone. She could have simply put the tariffs so high on us that

we could not have sold to her.

And it is not enough to say that Canada would not have put up with it. Canada would have put up with it before she starved.

This agreement goes a long way to

ward making one automobile market of Canada and the United States. Why shouldn't Canada, as a great national power, share in that market? Whether the result of the agreement is to lower the price of cars-which I hope it will do to the total market, or raise the wages of the workers-and I point out it is one union-the result should be a greatly expanded market for the items that go into the composition of a car, as well as other items.

In other words, a trade war with Canada, suggested by the timid, makes us poorer, too; while the increased prosperity of Canada increases our prosperity. The intent of this agreement is to help Canada and ourselves. I congratulate the State Department. I hope this agreement works so well that our great and good neighbor, Mexico, chooses to join in the same agreement.

But I would go further. I trust that Central and South America also find that such arrangements are beneficial and that they, too, can be joined in an everincreasing trade area; and that thus with a new method the New World can answer the European Economic Community.

Now, before anyone says further that we are losing business, I would like to report that in the first 5 months of 1965 the United States had a trade surplus of $310.2 million in automotive products. This compared with the first 5 months of 1964 of $278.8 million.

In cars we had a surplus of $29.8 million as opposed to $10.8 million for 1964. In trucks and buses, the U.S. surplus was $9.6 million, as compared with $8.1 million for the same period of 1964. In parts the U.S. surplus was $270.8 million as opposed to $257.9 million for the same period of 1964.

Mr. Chairman, I support this bill and I urge its passage. I believe that with

its passage a new prosperity will come to North America.

Mr. KEOGH. Mr. Chairman, will the gentlelady yield?

Mrs. GRIFFITHS. I yield to the gentleman from New York.

Mr. KEOGH. Mr. Chairman, permit me to compliment the gentlelady on her typically excellent statement. But we who are privileged to serve on the committee with her know that excellent statements from her are the rule and not the exception.

And, Mr. Chairman, meaning not in any way to deprecate the force of her statement, I would like here to say that I share completely her views on the importance of this agreement, and the im

portance of the enactment of this bill; and this, in my opinion, will blaze, I hope, a trail for further agreements of this precise type.

Mrs. GRIFFITHS. I thank the gentle

man very much.

Mr. Chairman, I would like to answer one further criticism. There is no provision whatever in this agreement relating to the maintenance of 60 percent, or any other level of Canadian production for increases in auto sales over 1964. The Canadian companies have given the Canadian Government undertakings to increase their future Canadian value added in this way. However, the failure of any company to do so will not affect the removal of tariffs because that is brought about by the agreement, not by the letters of undertaking.

Mr.

BYRNES of Wisconsin. Mr. Chairman, I yield 5 minutes to the gentleman from California [Mr. UTT]. Mr. UTT. Mr. Chairman, I rise in opposition to the bill. I am not only going to talk against the bill but I happen to be one of those who is going to vote against it also.

Mr. Chairman, I realize that my remarks probably will not influence many votes, but I would like to say I am in favor of free trade between Canada and the United States. I believe it would be good for both countries. But, of course, this is not a free trade bill. this is not a free trade bill. It is a special preference to four of our biggest corporations. What you will be voting for this afternoon will represent a $50 for this afternoon will represent a $50 million windfall for the four biggest corporations in America. If you want to do it, it is all right. But I can recall the days when Charlie Wilson made the statement that "What is good for General Motors is good for the United States." The Democrats laughed him out of office and he had to resign as Secretary of Defense.

Mr. Chairman, the Democrats have taken that slogan and they say that what is good for the four big automobile companies is good for the United States. That is known as the "trickle down" theory. I have always supported the "trickle down" theory, believing that if you give the benefit at the top, eventually it gets down to the little man and it is enjoyed by all.

Mr. Chairman, I hope that my opponent next year will recognize the fact that his party has now adopted the "trickle down" theory.

Mr. Chairman, my principal objection to this bill is the financial adjustment assistance provision. I believe the balance of the bill is proper and that it should be passed. should be passed. But if we are giving a $50 million windfall to General Motors, to Chrysler, to Ford and to American Motors, and if this is so valuable to them, I feel they should stand the financial adjustment assistance for any displacement of workers of the automotive industry. I do not feel that it should be paid for out of the U.S. Treasury. That is what we are doing today, we are giving a $50 million windfall to these great corporations and then we are asking the taxpayers to pick up the tab for the displacement of workers in this industry.

Moreover, Mr. Chairman, the bill itself is not, as I said, a free trade agreement. If you are an automotive parts dealer

in Canada, you cannot import parts from

America without paying a tariff, but only

if you are one of these four giant automobile dealers. And, if you are a person dealing in auto parts in the United States you cannot import from Canada parts without paying the regular tariff. This benefit is designed only for the preferred four big corporations. So, we are passing preferential legislation to help four of our biggest corporations in America. We are giving them a windfall. We say, "If you upset our American labor market, then the American taxpayer will pick up the tab."

Again, Mr. Chairman, I say if it is valuable enough to these corporations to have this legislation, then they should agree to pick up the tab for the displaced labor.

This legislation is a poverty program in reverse.

In connection with the adjustment assistance section, those that are affected will get unemployment compensation, which is approximately 26 weeks to 52 weeks. They also have a labor contract which gives them additional unemployment compensation, and on top of that they can come to the Federal Government for additional compensation. This could result in the payment of $400 or $500 a week to some of the workers who are displaced. There is no regulation on how this money shall be paid out for assistance. assistance. Under the Trade Adjustment Act of 1963 we set up a very strict criteria under which anyone could get assistance, but under this section they make application and if the administration decides they are entitled to it they will be paid. The criteria is not strict enough to work, and we could end up by paying millions of dollars a year in financial adjustments which should be paid by Ford, Chrysler, General Motors, and American Motors. For that reason I will offer a straight motion to recommit.

Mr. MILLS. Mr. Chairman, I yield 3 minutes to the gentleman from Indiana [Mr. BRADEMAS].

Mr. BRADEMAS. Mr. Chairman, I rise in opposition to H.R. 9042, the Automotive Products Trade Act of 1965.

As the distinguished chairman of the great Committee on Ways and Means [Mr. MILLS] said a few minutes ago, the agreement authorized by this bill may

result in—and I believe I quote him correctly-"some dislocation here and there." That is what bothers me about the bill-nobody has said just "where" the "here and there" are.

I have yet to be convinced that the results of this United States-Canadian agreement will not be injurious to American automobile parts manufacturers whose plants are located exclusively in the United States. The very fact that this bill makes provision for adjustment assistance is an indication of an expectation that some American workers might lose their jobs.

Scarcely one week after this agreement was signed by President Johnson and Canadian Prime Minister Pearson the Modine Manufacturing Co., which has a plant in La Porte, Ind., in my congressional district, announced that it might establish a plant in Canada in order to protect its share of the automobile radiator market and that it was investigating sites in Canada.

In December 1964, I am advised, as a direct result of the Canadian duty remission scheme then in effect, the production of automobile radiators at the McCord Corp. plant in Plymouth, Ind., in my congressional district, was transferred to the McCord plant in Orangeville, Ontario. Approximately 65 people lost their jobs.

The distinguished chairman of the Committee on Ways and Means [Mr. MILLS] has just admitted that our Government might well have invoked countervailing duty orders to offset the Canadian duty remission scheme, but such orders were never issued by our Government. Instead, we got this agreement. And, as I have said, after this agreement was signed, the Modine Manufacturing Co. continued to warn of the possible loss of American jobs. Possibly 500 jobs are at stake in La Porte, Ind., alone.

An important question about this agreement, which still lacks an adequate answer, is: "To what extent will this agreement result in exporting United States automobile parts manufacturing firms and the jobs of American workers they employ to Canada?"

I am one of those who believe that our Nation's No. 1 economic problem is unemployment. I am particularly sensitive about unemployment in my own congressional district because it was only 20 months ago that the Studebaker Corp. closed the gates of its automobile plant in South Bend, Ind., leaving over 7,000 workers jobless. Ironically, or perhaps not so ironically, Studebaker moved its automobile manufacturing to Canada.

During my years in Congress I have consistently supported free trade legislation and the general relaxation of tariff barriers. I will continue to do so. But this agreement should not be mistaken by anyone as a free trade agreement. Only certain Canadian manufacturers, including the subsidiaries of American automobile manufacturers, are eligible for duty-free imports, and then only if they agree to increase their production and to abide by other Canadian Government guidelines.

Furthermore, I question how this bilateral agreement can be reconciled with

our Government's stated policy of liberal multilateral trade relations based on the most-favored-nation principle. All GATT countries have the right to be accorded the same treatment as Canada. But this bilateral agreement undermines GATT and the most-favored-nation principle by substituting an expedient scheme for a reasoned, fair solution. It seems to me this agreement represents a repudiation of our Government's fundamental principles of trade policy. I, therefore, urge congressional disapproval of H.R. 9042.

Mr. Chairman, I ask unanimous consent to include following my remarks the text of a letter sent yesterday to all Members of the House opposing passage of this bill and signed by the gentlemen from Kentucky [Mr. STUBBLEFIELD), from Illinois [Mr. McCLORY], from Virginia [Mr. MARSH], from Wisconsin [Mr. STALBAUM], and myself.

CONGRESS OF THE UNITED STATES,

HOUSE OF REPRESENTATIVES, Washington, D.C., August 30, 1965. DEAR COLLEAGUES: We are writing to present for your consideration our reasons for opposing H.R. 9042-the Automotive Products Trade Act of 1965-scheduled for consideration by the House tomorrow, Tuesday, August 31.

H.R. 9042 purports to ratify and implement a "trade agreement" between the

United States and Canada on automotive products. But the underlying pact to which H.R. 9042 relates is not a trade agreement at all. The United States will give away part of its market in automotive products to Canada and get nothing in return. What the bill would really ratify and implement are private, cartel-like agreements between the Canadian affiliates of U.S. auto companies and the Canadian Government. In other words, enactment of this bill would constitute the approval by Congress of a give-away to Canada of an important segment of the U.S. market in auto products of in effect a North American cartel in the and a congressional sanction of the operation auto products field.

Our principal objections to the passage of this bill are:

1. The United States has undertaken, in the so-called trade agreement with Canada, to grant duty-free treatment to motor vehicles and original equipment parts imported by anyone from Canada. Canada in return has undertaken nothing. Canada promises to give duty-free status to automotive products imports only if they are imported by qualified Canadian vehicle producers. But a qualified Canadian producer is one who has entered into a private agreement with the Canadian Government pursuant to which he undertakes to maintain his Canadian production and sales at their highest historic level and guarantees a fixed, increased annual amount of Canadian production (for export to the United States) in years to come. In short, duty-free treatment on imports into Canada will only be extended to those who guarantee that Canada's share of the home Canadian market for automotive products remains intact and that the Canadian share of the U.S.

market will increase. Thus, the agreement is completely one-sided in favor of Canada to the detriment of U.S. companies and their workers.

2. The private agreements between the auto companies and the Canadian Government, part of which are documented in the Ways and Means Committee Report on H.R. 9042, are agreements to restrain trade. Such agreements are the very antithesis of liberal

trade and their existence raises serious antitrust implications.

3. The underlying formal agreement which H.R. 9042 purports to ratify is a bilateral agreement whose benefits are not extended to products of non-Canadian origin. This agreement constitutes an administration proposal to return to the long-since discredited policy of limited, conditional bilateralism.

The record made to date on this bill is totally devoid of any reason why the Congress should now scrap our long-standing policy of unconditional, most-favored-nation trade pacts. Indeed, the most recent administration pronouncements about the need for our adhering firmly to this fundamental principle fly in the face of the United StatesCanadian auto pact. The Honorable W. Michael Blumenthal, Deputy Special Representative for Trade Negotiations, just a few weeks ago said:

"All the major industrialized countries are under pressures of various sorts, or have been tempted at one time or another, to depart from MFN (most favored nation) in this or that area. We must resist this temptation. We must be particularly careful not to vitiate the MFN principle in our search for expedient solutions to immediate problems." Address to Dusseldorf Chamber of Commerce and Industry, Dusseldorf, Germany, July 15, 1965.

Since Mr. Blumenthal's statement repre

sents current U.S. policy on discriminatory trade pacts, how can one reconcile the United States-Canadian pact with this fundamental, overriding principle of U.S. trade policy?

4. In the present 89th Congress, over 100 Members of the House have sponsored or introduced legislation to amend the U.S. antidumping statute. Regardless of one's position on the subject of dumping and the adequacy of present U.S. law thereon, he must be concerned with any legislative proposal which would condone and excuse the sale of foreign merchandise in the United States at prices below those charged in the home market. The passage of H.R. 9042 would do this very thing.

We understand that the Ford Motor Co. of Canada, relying on the passage of this bill Canadian-made cars per month to the United by Congress, began, last March, to sell 400 States. These cars, which are being marketed in upstate New York, have been, and are being, sold at U.S. prices. The U.S. prices being charged are substantially below the Canadian prices for the same cars. In other words, the Canadian cars are being sold in the New York market at less than their fair value, at dumping prices.

We are also informed that Chrysler of Canada, beginning with the 1966 model year, will ship some 80,000 Canadian-made Chrysler cars to the United States and sell them at U.S. prices. This means that in a few weeks, some 7,500 Canadian-made cars will be

dumped every month on the U.S. market, just by two suppliers.

Regardless of one's views on what U.S. antidumping policy should be, he cannot fail to be alarmed when asked to approve legislation which will condone beforehand a potentially large scale dumping operation. Nor is his concern lessened because such dumping is supported by the U.S. auto producers. Other American industries which stand to be hurt by this practice, and other American workers whose jobs are threatened, do not approve of such dumping.

If the Canadian and the U.S. Government desire to effect a trade agreement under which all automotive parts and all completed vehicles might be sold tariff free in the other country, this would be a step quite different from that involved in H.R. 9042. Indeed, negotiations looking toward the establishment of a North American Free Trade Community would appear to be consistent with our national policy. However,