COOPERATION IN MEETING RED TRADE DRIVE This Communist trade offensive is something, gentlemen, which in my opinion neither the Congress nor the businessmen of the United States can afford to ignore. It is one of the many international developments which I, in my capacity virtually as an international trade intelligence operative, have had to follow and to study very closely. And as I pointed out in an editorial within the past few weeks, much of the seeming success of the trade offensive of the Kremlin, and of satellite states, has been due to the seeming willingness of the Communists to accept goods, any goods that the Indians or Burmese or Arab States find it hard to sell in world markets, as payment for exports to be supplied by the Communist bloc. It would not be proper for me, at this time, to encroach on the time of this committee with an extended discussion of the grave dangers to the free world, and specifically to the United States, which I discern in this Communist economic offensive. It does seem to me, however, that the very serious consideration of this growing threat should be included in considering the importance of OTC and the GATT, which seem to offer the best if not the only vehicles through which the nations of the free world can effectively cooperate, to meet this new Communist menace. So in conclusion, may I repeat that membership of the United States in the OTC as proposed in H. R. 5550, and implicit approval by the Congress of the GATT, can be the greatest boon within the power of the Congress to confer on those 4 million or more Americans who derive their living from world trade; whereas failure to enact this proposal may raise havoc with the livelihood of many of these Americans and at the same time may devastatingly weaken that international economic cooperation which is one of the major bulwarks of the free world against Communist domination. Thank you. Mr. FISKE. The essence of the statement is that American exporters whom I claim to represent a large consensus of, American exporters are convinced that the expansion of American exports in 1955 was attributable in considerable part to the liberalization of restrictions on goods from the dollar area by a considerable number of countries, largely in Western Europe. In the second place, exporters are convinced that in considerable part this removal or modification of restrictions was attributable to the GATT. For this reason American exporters believe that by providing the GATT with the OTC as a mechanism of the secretariat for future operations, the prospects for the future expansion of American exports throughout the world will be further improved. That is the essence of my remarks. I have brought up a second point which I would like to refer to a little more fully, and that is the present threat of Communist trade penetration throughout the world. I am sure you gentlemen are aware that late in February a representative of the West German Government met with representatives of the British Government in London to discuss joint means whereby to fight against Communist trade competition in various third country markets, the Far East, and Latin America, and elsewhere. It is obvious that the Communists are not controlled by price. They can ask for slave labor goods, any place they see fit for political purposes. They can accept goods in exchange. They are free from economic considerations. American exporters are only beginning to worry about that development. They have not yet run into it to the extent that the British and the Germans are running into it. It is my belief-and in this I can speak only for myself, because the trade has not yet given it much consideration-that there must be cooperative measures in order successfully to oppose the Communist trade drive. About 2 years ago, I think in November 1954, General William Draper, who has served the Government in various capacities and is now president of the Mexican Light and Power Co., in a special article written for me, suggested that if east-west trade were to be controlled it must be done through a common, joint action of the free nations, and it seems to me that the GATT, facilitated by the OTC, with strong leadership from the United States, might well provide the most effective mechanism for cooperative action in meeting and defeating the Communist trade offensive. There is one other point I would like to make. In my prepared statement I have said: May I repeat that membership of the United States in the OTC as proposed in H. R. 5550, an implicit approval by the Congress of the GATT, can be the greatest boon within the power of the Congress to confer on those 4 million or more Americans who derive their living from world trade. I want to clarify that comment on implicit approval of the GATT. As I see it, the GATT, OTC, and the contracting parties are something like, let us say, a chamber of commerce. The contracting parties are the members. OTC would be the paid staff, the secretariat, and the GATT is the ultimate resolution or agreement that comes out of the conferences of the contract-parties. I would feel that approval of the United States joining the OTC would imply approval of the procedures of the contracting parties to the GATT in conducting multilateral negotiations. I would not feel that approval of the membership in OTC would imply either approval or disapproval of the end product of the actual Agreements Tariffs and Trade, and for those who fear that it would imply such approval, I can see no objection myself should the Congress see fit to add to H. R. 5550 a provision that this does not signify approval of any specific portion of the GATT or of the GATT as a whole, but it does approve the method of procedure, the method of negotiations. Mr. Chairman, I think I have no further reason to impose on your time. The CHAIRMAN. Does that complete your statement, Mr. Fiske? Mr. FISKE. 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 very much, sir. The committee will stand adjourned until 10 o'clock tomorrow morning. (Thereupon, at 2:55 p. m., the committee was recessed, to reconvene at 10 a. m., Thursday, March 15, 1956.) ORGANIZATION FOR TRADE COOPERATION THURSDAY, MARCH 15, 1956 HOUSE OF REPRESENTATIVES, Washington, D. C. The committee met, pursuant to recess, at 10 a. m., in the committee room, New House Office Building, Hon. Jere Cooper, Chairman, presiding. The CHAIRMAN. The committee will be in order. The Committee on Ways and Means will resume public hearings on H. R. 5550. The calendar of witnesses is again a heavy one, and it is hoped that witnesses will keep their oral testimony to a minimum and not to exceed 10 minutes in length. It has been necessary for the committee to schedule an executive session for 2 p. m., this afternoon. Cooperation of the witnesses in permitting the committee to complete the call of the calendar will be appreciated. The first witness appearing on the calendar today is Mr. Gilbert H. Robinson. Come forward, please, sir. Give your name, and address, and the capacity in which you appear, for the record. STATEMENT OF GILBERT H. ROBINSON, ASSISTANT TO THE PRESIDENT, FORSTMANN WOOLEN CO., PASSAIC, N. J. Mr. ROBINSON. My name is Gilbert H. Robinson, and I am assistant to the president, Forstmann Woolen Co., Passaic, N. J. The CHAIRMAN. You may proceed, Mr. Robinson. Mr. ROBINSON. As I said, I am assistant to the president of the Forstmann Woolen Co. of Passaic, N. J. My firm manufactures wool apparel fabrics for civilian and military use. I am here to speak briefly in opposition to H. R. 5550. For many years, it has been my responsibility to come to Washington on behalf of my company and offer testimony regarding the impact of foreign competition-the competition of imported fabrics made with labor rates which are from one-fourth to one-fifth, and in the case of Japan one-twelfth of what we pay here. During the course of these years, I have often appeared before this committee, the Senate Finance Committee, the Committee for Reciprocity Information and the United States Tariff Commission. At first, very frankly, gentlemen, I was talking about what we foresaw as a future threat to our business and to that segment of the textile industry in which we operate. We were then still under the abnormal influences of World War II. As time wore on, unfortunately, that threat became an actuality. Now, our business is hurt, and badly hurt, by products of cheap foreign 75018-56-63 981 labor which have already usurped, in my opinion, about 50 percent of that portion of the market in which we operate. That is not theory but fact. In my daily contacts with our customers, as I am president of the sales company of our firm, I am continually faced with samples of imported fabrics, comparable to what we make, which are landed in New York, duty, freight, and insurance paid, at prices which we cannot meet, no matter what efficiency of management, labor or equipment we may employ. The point I wish to stress, however, is the fact that I could always come to Washington and plead my case before you. I can truthfully say that I always received courteous and considerate attention. I believe that progress has been made in meeting our problem and the similar problems of many other people in many other industries, by the work of this committee, other committees, and members of Congress. Specifically, I would mention that as a result of the hearings last year on H. R. 1, the Trade Agreements Act now contains in the escape clause a better definition of what constitutes an injury and a more workable definition of what constitutes an industry, or a segment of an industry, for purposes of relief. Better provision is also spelled out for the preservation of industries vital to defense. By no means are these the final answers nor the complete and effective solutions, but they are surely steps in the right direction. But what if H. R. 5550 should pass and our country officially embraces OTC-GATT? As I understand it, gentlemen, no longer would it be worth my while to come to Washington to seek your help and seek redress. No longer would there be any practical point in presenting my case before any committee of either the legislative or executive branch of our Government. Why? Because the decisions and determinations regarding these matters no longer would be made in Washington. They would be made in Geneva, or London, or wherever OTC might choose to meet. I have no present means of knowing what persons would represent my country at these international gatherings. I am confident that they would be appointees, and not elected by, nor responsible to, the people. And we would be one country among 35, with one vote and no veto. What recourse would I have? I ask you what would be my right of appeal? I could hardly then expect that Congress would pass a special act contrary to a solemn obligation solemnly incurred in an official international body. Gentlemen, it is for this fundamental reason, this right of effective appeal going to the very core of our way of life in this country, that I urge the defeat of H. R. 5550. Thank you, sir. The CHAIRMAN. Does that complete your statement, Mr. Robinson? Mr. ROBINSON. 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. The next witness is listed as Mr. Spencer Love. Come forward, Mr. Love. |