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same time limitation in tie votes as he does whether he takes positive or negative action. Now he must report, and if he takes action and imposes import relief, Congress has a veto procedure on that. If he refuses to take import relief he must report to Congress precisely why he didn't do it.

Now I recognize that you have a veto on the one side and you have only the information so that Congress could act on the other. But if there is no provision or no program under which to act we have provided that Congress must get the information if the President refuses to act and, therefore, is able to act on its own once it has that information.

Senator RIBICOFF. May I ask you to yield? I am in the process of drafting an amendment to carry out just what you suggested. I would be pleased to submit it to you and I would hope you could cosponsor it Senator TALMADGE. Thank you, sir. It seems to me we must do that. When the staff was briefing us on the House-passed bill the other day it was pointed out that under one provision in the bill importers can complain but the poor fellow who is trying to pay taxes and keep his plant going and give jobs to his employees in the face of these imports can't complain. We can't have that.

I believe my time has expired, Mr. Chairman, and I yield at this point.

CIF vs. FOB

The CHAIRMAN. Senator Bennett.

Senator BENNETT. Thank you very much, Mr. Chairman.

Like all the rest of the committee I have enjoyed the discussion of the difference between CIF and FOB but I would like the record to be very clear that our use of FOB has gone back to the beginning of the time, and if there has been any movement away from it, at least so far as records are concerned, it is this administration that has made this movement, and I wouldn't like the record to indicate that this administration is not responsible for the FOB situation.

The CHAIRMAN. If the Senator will yield, you understand I didn't just start raising the devil about this when this administration came into office. I have been complaining about it for a long time.

Senator BENNETT. In the course of your statement you said this administration should do it and hadn't done it and I just want the record to be straight on that.

The CHAIRMAN. I think I referred to it as a bipartisan deception, and I am satisfied that is just what it has been.

Senator BENNETT. We will have to blame the men who wrote the Constitution.

The CHAIRMAN. No, just blame those who keep the figures. [Laughter.]

PRESENT STATUS OF TRADE NEGOTIATIONS

Senator BENNETT. Mr. Eberle, just what is the present status of trade negotiations in a general sense? Where are we? Are we at the beginning of a situation, at the end, in the middle?

Mr. EBERLE. We are, Senator Bennett, we are really at the beginning because the United States has really no authority or at least any credibility with which to enter into negotiations and, therefore, we are at the

threshold of a very major opportunity. We will have to decide whether we want to walk into it. Preparations for the multilateral trade negotiations committee are underway. The United States cannot participate or give leadership without congressional blessing and authority on a joint basis when we bring it back so we can enter into agreements. We have the same thing going on, a whole range of international opportunities, whether they be in the food conference or wherever they might be, trade barriers, whether they be the oil, the energy, wherever we can try to solve some problems like common standards and labeling procedures. The United States has no viability or credibility at the negotiating table unless we have a procedure with Congress as to how we are going to negotiate and bring agreements back for approval and that is what we are asking for here.

Now, secondarily, we are also in the same position as that even for small deals, and I am talking about, Senator Talmadge, a question about tobacco. We could have settled that 2 years ago if we had any authority to compensate just a tiny bit, and yet we have absolutely no authority. We provided for that kind of authority in the bill so we can make some of these deals to solve some of these problems as we go along, again, authority to negotiate in conjunction with participation by Congress. So we have a great opportunity to deal internationally, to manage our problems domestically, and what we are saying is are we prepared to walk forward and accept that opportunity. I think we should.

Senator BENNETT. Just to clarify it still further, is there any-when and how did this series of negotiations start. Who supplied the incentive to start them? Or the other nations working at them? How long have they been working at them? We used to talk about the Kennedy round and assumed that was a specific pattern that began and ended at a certain time. When did this series begin?

Mr. EBERLE. If you had to set a date, they really began on August 15, 1971, when then Secretary of Treasury Connally and the President closed the gold window and said we had to look at the whole economic system. Between that date and the Smithsonian Agreement we were looking at how to get the monetary structure, the trade structure, and it is from the resulting Smithsonian Agreement that countries must now also take a look at the exchange rate monetary system and also the trade system. In February of 1972, we entered into a declaration with the European Community and with Japan that we would try to find a way to begin multilateral trade negotiations in the fall of 1973. That was the beginning of it.

They have proceeded along those lines, there have been a number of countries that have from time to time said they were not interested but as recently as during the last 3 weeks we have had the reinforcements of the European Community, the developing countries, and with Japan, all saying there is more urgency now to have a framework for trade discussions because if we don't the opportunities to move backward are very serious.

Senator BENNETT. Will these negotiations or will the pattern of negotiations continue among our partners even though we might not have the opportunity to negotiate on the basis of the powers given in this bill.

Mr. EBERLE. The answer is they will continue to negotiate but they will do so bilaterally and regionally, to the probable exclusion of the United States.

BILL SEEN IMPROVING NEGOTIATING AUTHORITY

Senator BENNETT. Just at the risk of repeating, could you outline for us again the specific differences that the passage of this bill will make with respect to your power and ability to negotiate successfully. Mr. EBERLE. Specifically the bill will authorize, first of all, advance authority on the tariff side and a credible procedure in cooperation with Congress, both during the negotiations and bringing agreements back for approval, to reduce NTB's. Our partners have said, "You have no authority. We can't come to the negotiating table until you have that authority."

In addition to that broader based multilateral negotiation or other multilateral discussions such as the Food Conference, and so forth, there are a great many bilateral issues that cauld be solved by the very authorities that we are seeking. We have no authority, as I indicated, for compensation. If we give import relief, other countries have the right to retaliate. We have no authority for small deals such as in the tobacco wrapper case as an example, where we by modifying another tariff by a very marginal amount, we could have eliminated that problem. It would allow us to get at some of these problems, and equally important to those negotiations which give an opportunity to U.S. leadership in the trading world, the bill will give us the authority from the management standpoint to get at some domestic problems. An example, if other countries are going to subsidize products in third markets, this will allow us to take action against countries which do that. We don't have any authority to do that today. We don't have authority to respond in a very prompt manner on industrial products even in the United States. As a former businessman, I simply have to say that when you are dealing with competition, even though they are trading partners, we have both to negotiate with them and have the authority to discourage derviations from those agreements. We must have the authority to see that our interests are protected in the event they do not live up to their international obligations and attempt to go around and do some things that we would consider either illegal, unfair, or unreasonable. And, incidentally, most of these authorities that I have talked about, both on the negotiating side and on the so-called reaction side, management side, all other countries have today. So that it isn't something new, but I can tell you as a negotiator we are at a handicap in going to the table without the kind of provisions that we have in the bill leaving open what we have said to you, you tell us how Congress wants to work with us because we must have that in order to have a successful negotiation.

Senator BENNETT. Well, in view of the oft quoted energy crisisI will go back and start over again. You said earlier that you were afraid if these negotiations didn't succeed the world would break up into a series of bilateral and regional deals.

Mr. EBERLE. Yes.

Senator BENNETT. Do you think that danger is greater because of the energy crisis?

Mr. EBERLE. The answer is very clearly yes, because of the tremendous pressure on the current account international payments balances of countries. They all want to see now if they can't find some ways to ease their problems and this desire. It is reflected in bilateral deals, and it is reflected in currency devaluations or export subsidies or import or export restrictions, and we are confronted with those today. Senator BENNETT. So is it fair to say that you feel there is a real urgency for the passage of this legislation?

Mr. EBERLE. There is.

Senator BENNETT. I have no other questions, Mr. Chairman.

COMMODITY SHORTAGES

The CHAIRMAN. Senator Fulbright.

Senator FULBRIGHT. Thank you, Mr. Chairman.

Mr. Eberle, as you know, my State is deeply interested in this matter because we are major exporters of such commodities as rice, soybeans, cotton, and poultry. So that I have a very deep interest, aside from the national interest, in a large volume of international trade. It would be a serious thing for my State to lose access to these markets. I wonder, terms of trade which have now arisen as a result of acknowledged shortages in such things as oil and copper and bauxite, manganese, tin, and so on, these basic commodities. They have changed dramatically in the last year, I believe, against us, is that not so?

Mr. EBERLE. That is true, but I don't believe there is an exact identity of situations between oil and these other products.

Senator FULBRIGHT. Well, oil is the most current one but we import very large quantities, 50 percent of ore of a number of the basic commodities basic to an industrialized society.

Mr. EBERLE. Correct.

Senator FULBRIGHT. Aren't we in a similar situation with regard to bauxite, which is the basis for aluminum, copper, tin, and so on? Isn't that so, it is just a matter of time that they are likely to follow the example of fuel oil?

Mr. EBERLE. Let me take the example of bauxite.

Senator FULBRIGHT. Let me say I didn't want to go into detail. All I wanted to ask you is how serious do you think our situation is in regard to international trade.

Mr. EBERLE. The situation is serious. It is serious is a number of ways because the rules of the road are being undermined. We must find ways to deal with these problems and if we cannot deal with them in a multilateral context then we must have the authority in the United States to deal with that.

Let me turn to the question of bauxite as an example because there is a case where the producing countries have already had one meeting, including some of our trading partners. But the fact remains that even though we do import 50 to 60 percent, we have in Georgia and in Wyoming and in Utah more reserves of alumina in clay than all the known bauxite reserves in the world, and they can be turned up in a very short period of time.

Senator FULBRIGHT. At what cost? At a cost similar to what we have had?

Mr. EBERLE. At a cost similar to the present cost, the industry tells

me.

Senator FULBRIGHT. It seems unusual for them to go to all the trouble of importing it from Jamaica if the costs are similar here.

Senator BENNETT. May I interrupt? I come from a State with alumina. The investment is in bauxite and there is no incentive to invest in a gigantic way in alumina as long as the bauxite is available. But we are not in the same situation with the basic material from which aluminum can be made that we are in oil and I think we could move fairly fast. But as long as people are satisfied with their source of supply it is just inertia. They don't get rid of that and turn to another one.

Senator FULBRIGHT. Then do I conclude, Mr. Eberle, that you do not think it is serious, that we have all the resources we need and it is not a very serious matter after all. That this an illusion that we need international trade.

Mr. EBERLE. No, it is still a very serious problem because of a lot of reasons. But the only point I want to make is if we get put in a short-supply position on a number of other products we have got a lot better answer. We shouldn't be put in that position because it does raise our costs. It breaks down the world trading system and these irritations and tensions are going to flow over into the security and political side very fast.

Senator FULBRIGHT. I didn't want to go into each detail. I was under the impression from your previous statement and others that we are as a great industrial nation faced with some much more serious problems than we have ever been with regard to the terms of trade. It is the basic commodity versus the industrial commodity, is that not so?

Mr. EBERLE. The answer is it is true, that is a fact, but each product has a different problem. You cannot generalize, that is the only point I was making.

INTERNATIONAL PEACE AND TRADE AGREEMENTS

Senator FULBRIGHT. Yes. I didn't mean to imply they are all the same. But I thought your statement was a very impressive one when

you say:

The key elements in the development of orderly economic relations with the nonmarket economics as presently drafted. However, U.S. extension of nondiscriminatory tariff treatment as well as credits and guarantees may well be precluded. This in turn could prevent the October 1972 U.S.-U.S.S.R. commercial agreement of the full settlement of lend-lease obligations from taking effect. Then, I won't read it all, you say,

It is the fundamental theme of the administration which is that international peace cannot be based on just one or another action, international action on international relations. The political security and economic issues are all intertwined.

What disturbs me is since you proposed this trade agreement, which was about the time of the President's policy of normalizing our relations with Russia in particular, but with other countries in a similar situation also, there has been a steady deterioration of that movement. There was an interesting article this morning by one of the authorities on conditions in the Soviet Union, that it looks as if they have about given up or are in the process of giving up any hope of what they call détente with this country, and that being so then there is little

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