NATIONAL ASSOCIATION OF PHOTOGRAPHIC MANUFACTURERS, INC.,
New York, N. Y., July 1, 1958.

COMMITTEE ON FINANCE,

United States Senate,

Washington, D. C.

STATEMENT IN BEHALF OF THE AMERICAN PHOTOGRAPHIC MANUFACTURING INDUSTRY

Mr. Chairman and members of the committee, this statement, in respect to the bill, H. R. 12591, to extend the Reciprocal Trade Agreements Act now receiving your consideration, is presented in behalf of the American photographic manufacturing industry as represented in the membership of the National Association of Photographic Manufacturers, Inc., whose members, according to best available information, produce more than 90 percent of the dollar volume of photographic products in the United States.

In our present statement may be briefly outline the problems confronting the industry and emphasize three particular objections to the bill in its present form, namely:

(1) Positive and certain relief provisions for injured domestic industries and for the protection of essential defense potential are needed.

(2) Further important reductions could be made in rates already excessively reduced.

(3) Many items could be placed on what would almost amount to the free list if authority contained in the bill is utilized.

Problems of precision photographic manufacturers

In previous appearances before the committee, going back over a period of years, witnesses speaking in behalf of the industry or of their own individual photographic manufacturing interests, have called your attention to the increasingly heavy percentage of the American market, especially with respect to fine cameras, lenses, precision shutters, and similar products, which was being taken over by imports.

Your attention was called to such facts as these:

(1) That products principally affected are those having a high skilledlabor content.

(2) That the problem is almost entirely one of substantially lower foreign wage rates (running from one-tenth to one-fourth of ours), combined with the fact that foreign producers in general have available to them the same advanced production methods and equipment as the American

manufacturer.

(3) That American manufacturers of such products would either find themselves waging a losing battle to maintain a satisfactory share of their own home markets, or would be forced to seek to overcome the situation by having lenses, shutters, and other precision subassemblies and parts. or possibly even completed products, made abroad for them. This has now come about to a significant degree.

(4) That these products are a major peacetime means of livelihood and continued existence of highly skilled workers and specialized equipment essential to national defense.

(5) That to the extent the American manufacturer's domestic market is taken over by imports or he finds himself under the necessity of buying precision parts abroad, we are to that extent in effect exporting skilled jobs in what the Munitions Board has termed a "critical production area." (6) That certain segments of the photographic manufacturing industry, principally those referred to, had already been seriously injured as a result of foreign competition promoted and aided by reductions which had already been made in United States tariff rates on photographic products. (7) That the impact of this competition is being most seriously felt by the smaller companies since they are the ones which tend more to specialize in limited product areas.

To show you how these developments have progressed at an accelerated pace. please note the striking growth of photographic imports into the United States. which in total have more than doubled in the last 4 years (from just under $21 million to just over $46 million). The situation in the critical areas of fine cameras, lenses, and parts is set forth in table I.

TABLE 1.--Imports of cameras (over $10), parts, and lenses

In this table, first presented is the very important classification known as "Cameras valued at more than $10 each." These are the so-called better cameras intended for the serious amateur or even to some degree for professional or other nonpersonal uses. There is a relatively limited market for such cameras. Trade estimates are to the effect that there are only about 10 million such cameras in use in the United States of all ages and conditions. Yet, in 1957 more than 467,000 such cameras were imported, and in the 4-year period 1954-57 almost 1,400,000 have been brought in. You will note the amount imported in 1957 was well over double the number brought in in 1954.

The table also shows the imports of these cameras from the two principal countries involved—namely, West Germany and Japan-as well as showing the total for all countries. By way of comment, it might be noted that East Germany in this 4-year period was the source of United States imports of more than 130,000 of these cameras valued at more than $6.6 million. It is unnecessary to add that their markets are completely closed to us.

As table I indicates, the predicted increases in imports in cameras, lenses, and parts have taken place. This further strong growth serves to emphasize the point that these areas of precision equipment, necessarily involving a high skilled-labor content, are particularly vulnerable to competition from low-wage countries such as Japan and Germany.

It is particularly in these areas of high-precision products where trained workers and specialized equipment (for the most part not commercially available), and up-to-date plants, constitute a vital defense potential.

The industry's peacetime skilled labor force, maintained at a satisfactory level, would be sufficient only to provide the essential nucleus of key workers for the expanded wartime production of photographic products as well as in the making of nonphotographic products which this industry is counted upon to produce such as height-finders, rangefinders, fire-control devices, time and proximity fuses, and many other precision devices.

Need for more positive and certain relief

Although the present act provides avenues of relief for injured domestic industries and for the protection of defense potential, efforts by various affected industries to obtain relief have been most discouraging and largely unsuccessful, as the record shows. Without undertaking to judge the merits of the individual cases, it would appear that some more positive and certain means of obtaining needed relief is necessary if such provisions are to be reasonably effective.

Although H. R. 12591 contains certain changes in the relief provisions, testimony has already been presented in some detail indicating these are still unsatisfactory and in need of further improvement. We will, therefore, not burden you by repeating this information, except to state that relief provisions more in accordance with those contained in the Simpson substitute measure considered by the House would, we believe, be much more effective.

In our own industry, we see highly specialized, skilled jobs, representing critical and, in some instances, bottleneck defense-production areas, being, in effect,

exported, principally to West Germany and Japan, by reason of the increasing imports and of the increasing extent to which American manufacturers have been forced through competition of these imports to buy precision parts or even completed precision products abroad. The latter practice has forced some American manufacturers, in an effort to retain their market, to become, in part, distributors of foreign goods which they formerly manufactured themselves or, as in the case of lenses, for example, which they customarily purchased from other American manufacturers.

It must be evident that, to the extent that the United States loses or emasculates its high-precision industries, mostly quite small, which represent essential defense potential, it will be in a weakened position in the event of an emergency. Substantial and, in some instances, excessive reductions made

In negotiations which have taken place under past authority, many United States tariff rates on photographic products as established by the Congress in the Tariff Act of 1930 have already been materially reduced. Examples of various key categories show reductions ranging from 25 to 75 percent. table II.)

TABLE II.-Examples of reductions in duty

(See

NOTE.-A complete presentation of original (1930), present, and further possible reduced rates of duty on photographic products is presented in the table on p. 614, pt. 1, hearings (Feb. 17-Mar. 7, 1958) before the Ways and Means Committee, this being submitted as a part of our statement.

Excessively reduced rates could be further cut

H. R. 12591 provides for further reductions, even in rates which have already been excessively reduced. An example of its possible effect on photographic duties is provided in table III, obtained by adding two further columns to table II, namely:

Column 3: Rate possible under H. R. 12591, assuming its full authority is utilized.

Column 5: Percent reduction which this rate represents in terms of the original 1930 rate (col. 1).

TABLE III.—Effect of further reductions under H. R. 12591

Further reductions would virtually place many items on free list

Except for a specific provision in H. R. 12591 barring such practices, its dutycutting powers could be used to put many items on the free list. However, actually, these powers are sufficient to accomplish this for all practical purposes, even if not in actual fact.

As one example of this, such items as (1) cartridge or roll film; (2) X-ray film; (3) other film, except motion picture; and (4) motion-picture film, less than 1 inch wide, originally carried rates of 25 percent ad valorem. Through successive slashes, these rates are now only 6 percent. They could be further cut to 44 percent, thus virtually achieving free-list status for all of these classes of products. The resulting rate would be at a level of only 17 percent of the original rate.

It would seem that, in the interests of the announced program of maintaining reductions on a selective, gradual, and moderate basis, some safeguards should be imposed to prevent the further reduction of rates which have already been reduced more than moderately, or reductions which would substantially, in effect, place an item virtually on the free list.

Conclusion

In this statement we have undertaken to provide up-to-date information concerning the impact of imports on this industry which, we hope, may be helpful in connection with your present deliberations. In doing so, we have reminded you of certain points previously brought to your attention, but without burdening you by repeating the supporting evidence. The further evidence provided herein does, however, serve to emphasize the soundness of the previous testimony, as well as to indicate the reasons for the objections raised herein in respect to H. R. 12591 in its present form.

Your sympathetic consideration of our statement will be greatly appreciated. Respectfully submitted,

WILLIAM C. BABBITT,
Managing Director.

THE INTERNATIONAL SILVER CO.,
Meriden, Conn., July 2, 1958.

Re hearings on H. R. 12591

Hon. HARRY F. BYRD,

Chairman, Senate Finance Committee,

Senate Office Building, Washington, D. C.

My DEAR SENATOR BYRD: The United States stainless-steel flatware industry, for which I speak, urges the Senate Finance Committee to accept the amendment to H. R. 12591, proposed by Senator Strom Thurmond on June 24, 1958. so as to make the Tariff Commission responsible to the Congress. We also urge the Senate Finance Committee to spell out the conditions under which quotas are to be imposed on imports of foreign products.

We believe the action recommended above is necessary so that the will and intent of the Congress to protect United States industry, as expressed in escapeclause section 7 of the Trade Agreement Extension Act of 1951, cannot be thwarted by Executive action.

Let me make very clear the fact that all United States manufacturers of stainless-steel flatware, individually and collectively, believe in and support the intent of the foreign-trade policies of our Government. We do not believe, however, it is necessary to destroy any United States industry in order to enjoy favorable and profitable trade relations with any foreign country. Past decisions on escape-clause actions indicate the executive department may not share this belief.

I will appreciate your courtesy in reviewing the following material: Exhibit A-A report to President Dwight D. Eisenhower

This was prepared following the Tariff Commission unanimous finding of serious injury to the United States stainless-steel flatware industry caused by imports of foreign stainless-steel flatware, and prior to the President's acceptance of the "voluntary" quota offered by the Japanese. Exhibit B-A copy of letter to Senator Bush

The fact that our Government accepted the proffered Japanese quota is prima facie evidence it recognizes quotas must be imposed on imports of certain products to properly protect United States manufacturers of those products. Therefore, if its protestations of protection for United States industry are sincere, it should take no exception to the spelling out of conditions under which quotas are to be recommended by the United States Tariff Commission and proclaimed by the Executive.

27629-58-pt. 2-14

Exhibit C-Projected full-year 1957 stainless-seel flatware imports compared with United States manufacturers' sales

Exhibit D

May I also refer you to the statement by Miles E. Robertson in behalf of the United States stainless-steel flatware manufacturers found at pages 2236-2251 of the hearings before the Committee on Ways and Means of the House of Representatives made March 18, 1958?

I repeat; the United States stainless-steel flatware industry believes in reciprocal trade. It is willing to share its market with imports from foreign countries on a basis that will permit both United States manufacturers and foreign manufacturers to prosper. So far as we are concerned, the Reciprocal Trade Act can be renewed indefinitely, providing, and only providing, the conditions for administering it are spelled out so clearly that those charged with its administration can follow only the course legislated by the Congress. It is our earnest hope the Senate Finance Committee will write such measures into the act.

Sincerely,

CRAIG D. MUNSON, President

(For United States Stainless Steel Flatware Industry).

EXHIBIT A

A REPORT TO PRESIDENT DWIGHT D. EISENHOWER FROM THE UNITED STATES MANUFACTURERS OF STAINLESS-STEEL FLATWARE, SILVER-PLATED FLATWARE, AND STERLING-SILVER FLATWARE

TARIFF COMMISSION RECOMMENDS RELIEF

Commissioners Talbot, Jones, and Dowling recommend the withdrawal of the concessions granted in the General Agreement on Tariffs and Trade on stainlesssteel table flatware, regardless of value stating [the Commission]: "Having found the domestic industry to be seriously injured * * *. The only proper remedy is one that would afford the entire domestic industry relief from import competition."

Commissioners Brossard, Schreiber, and Sutton, however, recommend the withdrawal of the concessions granted in the General Agreement on Tariffs and Trade only on stainless-steel table flatware valued under $3 per dozen pieces.

If the increase in duties is limited to flatware valued at less than $3 per dozen, the domestic industry could be faced with less competition from imports of lowpriced flatware, but it would be confronted with increased competition from imports of higher priced flatware, not only from Europe but also from Japan.

QUOTA ON IMPORTS ONLY REAL HOPE FOR THIS INDUSTRY AND ITS WORKERS We do not quarrel with the intent of the foreign-trade policies of our Government. The only issue is the extent to which these policies have so far seriously injured and, if continued, will destroy the United States flatware industry, as clearly demonstrated in this report. All we are endeavoring to do is properly safeguard the jobs of American working men and women and the rights of this American industry to exist.

We welcome the finding of serious injury and recommendation of the withdrawal of existing concessions by the Tariff Commission. However, we sincerely believe the price differential between imported stainless-steel flatware and United States stainless-steel flatware is far too wide for the resulting duty increases to do anything but bring a partial relief.

We are convinced the only effective method by which the American standard of living and American wage scales can be maintained in competition with the low wage scales and living standards of foreign countries is by the establishment of a reasonable global quota on imports. Mr. President, we very respectfully ask you to proclaim such a quota.