victory. Even though responsible leaders in the recipient countries also know this, desperation for markets in order to meet the aspirations of their people can tempt those governments to gamble their political independence rather than refuse Communist aid and trade. To this challenge, our basic answer is our trade-agreements program, coupled with our own aid program. The free world, as a whole, certainly offers by far the largest market for the raw materials that provide most of the money income of the less developed countries. This offer can only be realized, however, so long as the dominant free-world trade trend is in the direction of opening markets and expanding trade to the maximum. In Western Europe, we see unfolding a great new movement toward economic unity. This is the European Economic Community established by the Treaty of Rome, which entered into force on January 1, 1958. Through this treaty, six nations on the European continent Belgium, France, the German Federal Republic, Italy, Luxembourg, and the Netherlands--have agreed to eliminate all barriers to trade among themselves and to act toward others as a single economy. They will form a single common market of 170 million customers with a total import trade which, last year, was larger than that of the United States. This new market will, in time, have a single uniform tariff and a common trade policy which it will apply to imports from the United States and other countries of the free world. This development has been encouraged by the United States, both the Congress and the executive branch, since the early days of the Marshall plan. It should now be our policy to cooperate with the new Economic Community of Europe to the end that both the United States and the European Economic Community will contribute to the economic strength and well-being of the free world as a whole. The next 5 years will be the critical, formative years of the European Economic Community. This is a major reason why it is essential that the trade-agreements program be renewed this year for 5 years. During this period, long-lasting decisions will be made as the level of the European common external tariff and as to the other commercial policies which the Community will adopt. The best opportunity we will have to negotiate with the Community the tariff reductions most advantageous to our export trade will be before the new tariff becomes firmly established. We would seek to negotiate tariffs lower than those to which the countries comprising the European Economic Community are presently committed. The procedure and timetable which its members contemplate for the establishment of the Common Market illustrate the need for extending our program for not less than 5 years. The first step in reducing internal tariffs, within the Common Market, will be taken next January 1, when internal duties are to be reduced by 10 percent from their present levels. Thereafter, there will be progressive reductions until internal tariffs are completely eliminated by the end of 1972. These reductions are important to us because, after the first of next year, goods produced within the Common Market will have a steadily increasing advantage within the Common Market area over American and other free-world goods. With respect to external tariffs, the plan is this: The European Economic Community has informed us that they expect to have their proposed, or target, tariff (which they are now negotiating among themselves) available for examination by us and others about the end of 1959. The objective of this examination will be to ascertain whether the target tariff accords with the obligations which the common-market countries have previously assumed under the General Agreement on Tariffs and Trade. In this context, we shall want to be satisfied that the target external tariff is not no the whole higher, nor more restrictive than the separate tariff schedules of the six countries now in effect. We shall also look at the individual items to be certain that the commitments which others have made to us are maintained. After we have completed this examination, we will have to prepare the United States position for negotiations and choose the items on which we might be willing to consider tariff concessions. This will include peril-point investigations by the Tariff Commission. This whole process will take at least 18 months from the date on which we receive the target tariff. This timetable makes clear that under the best of circumstances negotiations with the European Economic Community cannot begin until 3 years from now. The negotiations themselves would take at least a year, bringing us at least to mid-1962. It is only prudent to allow another year for slippages. Finally, other countries will not be willing to make the complex preparations for these negotiations unless they are sure that the United States Government has authority to see them through to completion. For all these reasons the full 5-year extension is a necessity. Another point I wish to make is this. Our trade agreements program has been accepted in this country now for 24 years. I think it is clear that the program has been successful and has benefited this country greatly. I believe that most people in this country look upon the program as continuing and permanent. It would be, to my mind, unthinkable to discontinue it. On each of the 10 times that the Trade Agreements Act has come before the United States Congress for renewal, there has been a period of uneasiness and concern among out friends throughout the free world. Because the United States is the ranking supplier or consumer of so many commodities, its trade policy is a matter of vital interest to the overall economy of many countries. The question of whether the United States is going to continue to buy a given country's products so as to enable that country to accumulate dollar exchange with which to buy needed supplies for the well-being of its own people is often nearly a life-and-death proposition. For one reason or another people abroad have acquired the impression that trade restrictionist sentiment is growing in the United States. Whether this impression is correct or not-and the recent passage of this renewal bill in the House would certainly indicate the contrary-the belief injects an element of instability and danger into the future which is not conducive to cooperation or to our national security. Why then should we insist upon the reargumentation of its merits every 3 years or oftener and lead our friends abroad to fear we may suddenly reverse our trade policy. The Trade Agreements Act has become a symbol around which other free world countries develop their trade policies and make their plans. Greater stability in our program will certainly mean greater stability in their programs. Can there be any doubt that such stability would benefit us all? This stabilizing of our basic policy would not of course mean freezing our procedures; if during the 5-year period experience shows the need for improvements in the legislation, this can of course be accomplished. Mr. Chairman, a few days ago (June 6, 1958) I made a statement to the Foreign Relations Committee dealing with the basic aspects of our foreign policy. In the course of that presentation I made a statement about world trade which I should like to repeat here today: The world of today requires better economic health than was tolerable in past times. International trade is more than ever important. Our own foreign trade is now approximately $32.4 billion a year and provides employment to 41⁄2 million of our farmers and workers. International trade is even more vital to the economic life of many other free-world countries. A principal instrumentality and the outstanding symbol of our attitude to international trade is our Trade Agreements Act. The principle of the act was first adopted in 1934, and 10 times the Congress acted to renew it. Any failure now to renew it would be a grave blow to the world's economy, including our own, and it could be fatal to security. Mr. Chairman, that is a blunt statement. But to put it less bluntly would in my opinion fail to portray the immense importance to the United States of the legislation now before us. Thank you, Mr. Chairman. The CHAIRMAN. Thank you, Mr. Secretary. Senator KERR. Mr. Secretary, I am quite interested in your statement. I know you speak from a sense of deep conviction. There are differences between us with reference to this matter or certain phases of it, and I am sure you will recognize, as do I, that they do not spring from a divergent viewpoint with reference to the imperative necessity for doing the best for the welfare of our country, but only from a different viewpoint as to how best to reach that objective. In your statement, referring, I believe, to the development, as you call it, of the common market of the 170-million citizens of Belgium, France, the German Federal Republic, Italy, Luxembourg, and the Netherlands, you call that the common market? Secretary DULLES. Yes, sir, I did Senator KERR. How did you call that? Secretary DULLES. I called it by what is technically its correct- Secretary DULLES. Yes. It is popularly known as the common market. Senator KERR. You say they are going to try to reach an agreement as to what tariff will be charged on items imported to any part of that European Economic Community? Secretary DULLES. Yes, sir. Senator KERR (reading): This whole process will take at least 18 months from the date which we receive the target tariff and then you say: This timetable makes clear that under the best of circumstances negotiations. with the European Economic Community cannot begin until 3 years from now. Congress will still be here, won't it? Secretary DULLES. Yes, sir. Senator KERR. You were speaking here of what you regard as the necessity for a 5-year extension? Secretary DULLES. Yes, sir. Senator KERR. Actually from your statement it seems to me that it would be a minimum of 3 years before the negotiations you refer to as a future necessity will even start? Secretary DULLES. Yes, sir. Senator KERR. So that if Congress saw fit to renew this act for 2 years and then had the matter before it, it would still be a year from that time before we can even, as you say, under the best of circumstances, begin to negotiate with the European Economic Community, would it not? Secretary DULLES. Yes, sir. Senator KERR. I have a concern as you do and as you have expressed it very eloquently here, as to the uneasiness that might be developed in the minds of our friends. You think that is important, don't you? Secretary DULLES. I do. Senator KERR. Do you regard the mental attitude of the American people with equal regard? Secretary DULLES. Yes, sir. Senator KERR. Is it not just as necessary for us to operate this program, to develop it and to maintain it on a basis that will reinforce the confidence of the American people as it is that we operate it on the basis so as not to impair, but on the other hand, reinforce the confidence of our friends? Secretary DULLES. Yes, sir. Senator KERR. You make the statement that for one reason or another people abroad have acquired the impression that trade restrictionist sentiment is growing in the United States. And then you give as an evidence that that is an incorrect impression, the recent action of the House. Are you not aware that there is a growing or increasing amount of restrictionist sentiment in the United States on this matter? Secretary DULLES. No, sir. I do not think that there is. I am told that this year for the first time the witnesses before the House committee in favor of this renewal were many more than those who opposed it, and represented far more extensive than those who opposed it. I think that there is no question, Senator, but what the overwhelming view of the American people is that the interests of the United States are going to be served by this extension. Senator KERR. Do you think that the men in the Congress had an equal opportunity with you to know what the sentiment of the American people is? Secretary DULLES. Yes, sir. Senator KERR. Well, I do not pretend to be an expert on that, nor do I pretend to have much knowledge about it beyond the borders of the State of Oklahoma; but I say this to you quite frankly, that there is more sentiment against this program in Oklahoma today than there has ever been, and I would be quite surprised if that originated in and terminated at the geographical boundaries of the State of Oklahoma. Secretary DULLES. Certainly I would not set myself up to contest with you the public opinion in Oklahoma. Senator KERR. I am not going to pretend to put myself up against you in gaging the sentiment of the United States because in the last two national elections you and your boys demonstrated that you had it more accurately gaged than I did, but I would be quite surprised if what I see so much of in Oklahoma would not find its counterpart across the Nation. The thing I say that for is this: I think it is just as important that this program be operated so as to win and keep the support and the confidence of the people of the United States as it is to operate it so as to win and keep the confidence of the people in the friendly countries with whom we are seeking to develop closer and more worthy relationships. Secretary DULLES. Let me say, Senator, on that point, that the policies reflected by this act are supported by the Department of State, not because of the fact that they give pleasure to others; they are supported because we believe that they serve the best interests of the United States. Senator KERR. I am convinced you mean that. Secretary DULLES. We try to run our foreign policy, Senator, for one purpose alone, and that is to promote the interests and welfare of the American people. Now obviously, I think, those interests and welfare cannot be promoted if you disregard our relations with others. So Senator KERR. Did you ever hear of the general who got so far ahead of his troops when he was ready to win his victory he did not have anything to win it with? Secretary DULLES. Yes, sir. Senator KERR. I mean you have got to maneuver from the position of the support of your own people, haven't you? Secretary DULLES. Yes, sir, and you have also got to give Senator KERR. You boys who get these jobs appointively do not have as keen an awareness of that as we who get them electively. Secretary DULLES. I am quite aware of that, but I am also aware of the fact that our constitutional processes put upon the President who does get his job electively and did get it as you pointed out by a pretty big vote Senator KERR. Yes. Secretary DULLES. It gives him the primary responsibility for the conduct of foreign policy, and it is his judgment that this is imperatively required for the welfare of the United States. Senator KERR. Where does that Constitution put the responsibility for the conduct of trade and commerce? And the regulation of trade and commerce? Secretary DULLES. That puts it on the Congress and the President. Senator KERR. Well, now, would you read me the part of it that puts it on the President? Just while we are sitting here in such a friendly mood. Senator KERR. Yes, Mr. Secretary. Secretary DULLES. Yes, sir. Senator KERR. Where is it? Do you happen to have it there? |