Secretary WEEKS. He has to first go to the Tariff Commission for their peril point recommendation.

Senator MALONE. Is that in the law now?

Secretary WEEKS. Yes, sir; and in the proposed law.

Senator MALONE. That he cannot make a trade agreement until he has the advice from the Tariff Commission?

Secretary WEEKS. That is right.

Senator MALONE. But if he wanted to make the trade agreement regardless, he could make it, could he not?

Secretary WEEKS. No; I do not think he could.

(The Secretary of Commerce subsequently forwarded to the committee for insertion in the record the following information with respect to procedures preparatory to tariff negotiations:)

TRADE AGREEMENT PREPARATORY PROCEDURES

Section 4 of the Trade Agreements Act of 1934, as amended (19 U. S. C. 1354), which contains legislative provisions relating to procedures preparatory to trade agreement negotiations, reads as follows:

"Before any foreign trade agreement is concluded with any foreign government or instrumentality thereof under the provisions of this Act, reasonable public notice of the intention to negotiate an agreement with such government or instrumentality shall be given in order that any interested person may have an opportunity to present his views to the President, or to such agency as the President may designate, under such rules and regulations as the President may prescribe; and before concluding such agreement the President shall request the Tariff Commission to make the investigation, and report provided for by section 3 of the Trade Agreements Extension Act of 1951, and shall seek information and advice with respect to such agreement from the Departments of State, Agriculture, Commerce, and Defense, and from such other sources as he may deem appropriate."

In pursuance of these provisions and in order to coordinate the trade agreement activities of the several interested agencies, two committees were organized when the program was initiated. These were the Interdepartmental Committee on Trade Agreements and the Committee for Reciprocity Information. More recently, in November 1957, the Trade Policy Committee was established by Executive order 2 as a Cabinet-level committee to advise and assist the President in the administration of the trade agreements program. This Committee consists, in addition to the Secretary of Commerce as its chairman, of the Secretaries of State, Treasury, Defense, Interior, Agriculture, and Labor, or of alternates designated by them. Such alternates must be officials who are required to be appointed by the President with the advice and consent of the Senate. Trade Policy Committee

Under the provisions of the Executive order creating it, the Trade Policy Committee has several functions in connection with the trade agreements program. The particular function of the Trade Policy Committee in the making of new trade agreements is to receive and review all recommendations made by the Trade Agreements Committee to the President and to transmit them to the President together with any comments and recommendations of its own resulting from that review. This Trade Policy Committee review takes place at each of the stages of Trade Agreements Committee action.

The Interdepartmental Committee on Trade Agreements

The Trade Agreements Committee consists of a Tariff Commissioner, and of representatives of the Departments of State, Treasury, Defense, Agriculture, Commerce, and Labor, and the International Cooperation Administration (nonvoting). The function of the Tariff Commission member is substantially that of a consultant.

The Trade Agreements Committee, under the chairmanship of the State Department representative is responsible for assembling and analyzing information 11. e., peril point procedure.

Executive Order 10741 and other documents relating to the Trade Policy Committee.

NOTE.-This material inserted on p. 228 of June 21 transcript.

pertinent to prospective trade agreement negotiations, the detailed content of the agreements, and making recommendations concerning the administration of the trade agreements program to the President through the Trade Policy Committee.

"

As special problems arise or as new trade agreement negotiations are contemplated, the Trade Agreements Committee sets up interdepartmental subcommittees, sometimes called "country committees,' to consider the particular problems or possible negotiations and to submit data and recommendations to the Trade Agreements Committee.

Committee for Reciprocity Information

The Committee for Reciprocity Information has at the present time the same membership as the Interdepartmental Committee on Trade Agreements, but the Tariff Commission member serves as its Chairman. This Committee was established in pursuance of section 4 of the Trade Agreements Act (quoted above) to receive the views of the public in connection with prospective trade agreement negotiations, as well as with the administration of agreements already concluded. The Committee for Reciprocity Information holds public hearings prior to each trade agreement negotiation, in order that interested parties may have an opportunity to be heard and to have their testimony or other statements of views available to the Trade Agreements Committee and to the President.

These three committees provide the machinery to carry out the objective of section 4 of a thorough examination and review of both the concessions we should seek from other countries and the concessions we should offer in order to obtain them, which takes into account the views of interested persons and groups, con. cerning the proposed negotiations, as well as those of all of the governmentaagencies concerned, including the peril point findings of the Tariff Commission[ Senator MALONE. I think you had better look that up. Are you telling me that he could not do it regardless of the Tariff Commission recommendations?

Secretary WEEKS. The peril-point procedure is established in the legislation.

Senator MALONE. But it does not say that he has to conform to it. All he has to do when he does not conform to the peril point as set by the Tariff Commission is to explain to Congress why he did not conform.

Secretary WEEKS. Senator, he has to get the peril point finding. Senator MALONE. He has-but he does not need to accept it. Secretary WEEKS. But he does not have to conform to what the finding is.

Senator MALONE. That is what you should have answered in the first place.

Secretary WEEKS. Yes; that is correct, but as I said, he always

has

Senator MALONE. Let's go to the next question. He does not need to conform. That is the purpose of the question.

Secretary WEEKS. He has to get the information, but he does not need to conform.

Senator MALONE. He does not have to do anything but sell the industry down the river if he believes it will further his foreign policy. Secretary WEEKS. That is right.

Senator MALONE. Now then, that only required an additional 10 minutes to get the answer. Then, in effect, what he can do if he thinks it will further his foreign policy, he can sacrifice all or any part of any industry under consideration, can he not?

Secretary WEEKS. He can go beyond the peril point if he sees fit.

(The Secretary of Commerce subsequently forwarded to the committee for insertion in the record the following information with regard to the peril-point procedure:)

The Tariff Commission, in its recent publication Investigations Under the "Peril Point" Provision, third edition, May 1958, gives the following brief description of the statutory requirements concerning peril-point determinations:

act

"Sections 3 and 4 of the Trade Agreements Extension Act of 1951 set forth the statutory requirements regarding 'peril point' determinations in connection with proposed trade-agreement negotiations. The peril-point provisions of the 1951 ** require the President, before entering into any trade-agreement negotiation, to transmit to the Tariff Commission a list of the commodities that may be considered for possible concessions. The Commission is then required to make an investigation (including a public hearing) and to report its findings to the President on (1) the maximum decrease in duty, if any, that can be made on each listed commodity without causing or threatening serious injury to the domestic industry producing like or directly competitive products, or (2) the minimum increase in the duty or additional import restrictions that may be necessary on any of the listed products in order to avoid causing or threatening serious injury to such domestic industry.

"The President may not conclude a trade agreement until the Commission has made its report to him, or until 120 days from the date he transmitted the list of products to the Commission. If the President concludes a trade agreement that provides for greater reductions in duty than the Commission specified in its report, or that fails to provide for the additional import restrictions specified, he must transmit to the Congress a copy of the trade agreement in question, identifying the articles concerned and stating his reason for not carrying out the Tariff Commission's recommendation. Promptly thereafter, the Tariff Commission must deposit with the Senate Committee on Finance and the House Committee on Ways and Means a copy of the portions of its report to the President dealing with the articles with respect to which the President did not follow the Tariff Commission's recommendations."

Senator MALONE. That is right, and now like the proposal coming out of the Department of the Interior, with 5 minerals-lead, zinc, tungsten, and others they make a proposition of paying the difference between the world price and the production price up to a certain limit, and that limit in most cases is about 25 to 35 percent of the American market.

You are aware of that, are you not?

Secretary WEEKS. Yes, sir.

Senator MALONE. You are.

Secretary WEEKS. Yes.

Senator MALONE. All right; then that means in the proposal to subsidize it, the tariffs are already so low they are ineffective. Most of them are under trade agreements. Then they are sacrificing at least two-thirds of the market to foreign nations, aren't they, for example, in tungsten?

They trade two-thirds of that now while we produced more tungsten. in the United States than the country could use under the MaloneAspinall Act of 1953. It was extended in 1956 with a limited number of minerals and it is good until 1959 but the House did not follow the Senate in appropriating the money.

The Senate sent the appropriation to the House four times. But it showed by having a set price or tariff that made the difference in the wages and the cost of producing goods here and in the chief producing country that you could produce all the tungsten you need. But now they are limited in this offer so that it cuts that market in two. So

what the Secretary of the Interior's proposition is, is to divide the market of tungsten. Just take that as an example. There are about 5,000 products. About 40 percent to the United States and 60 percent abroad; isn't that about what the effect is?

Secretary WEEKS. I do not know what the percentages are.

Senator MALONE. I can furnish that for the record but that is the principle of what they are doing, isn't it?

Secretary WEEKS. Yes, sir.

Senator MALONE. Then the President has sacrificed at least a half of the tungsten industry to foreign nations to further his foreign policy, has he not?

Secretary WEEKS. I do not know the details of the tungsten situation.

Senator MALONE. If what I say is true, that they only figure on subsidizing it up to a certain percentage of the market, the rest of it is sacrificed, is it not?

Secretary WEEKS. I do not know how it will work out in price range. It might or it might not be, I would think.

Senator MALONE. If what I tell you is true, it would be true, would it not, that they only subsidize it up to a certain percentage of the market?

Now if that is true, then the rest of it is sacrificed, is it not?

Secretary WEEKS. I have no competence in the tungsten field. Senator MALONE. You do not know whether or not I am telling you the truth; is that it?

Secretary WEEKS. If your facts are accurate, we are going to continue to buy some tungsten abroad; yes.

Senator MALONE. But that would sacrifice the amount of the market in this country above the amount of the subsidy, wouldn't it, that is to say, a certain number of units that is subsidized.

Beyond that, it would be a foreign market, would it not?

Secretary WEEKS. Well, obviously if you buy something abroad, you have got it here, as you have expressed it you have sacrificedSenator MALONE. I know you understand what I am asking you and I want you to answer it and you are going to, though it may take a long time. That is, if I have explained this to you properly, instead of producing 100 percent or 75 percent, you are going to produce the percentage that is subsidized, aren't you, under any plan?

Secretary WEEKS. That would depend on what the world price is and what the domestic price is.

Senator MALONE. Why, of course, but if what I am telling you is true, the foreign price is so low that there is no chance of anybody here competing on a world price. So the subsidy comes in for 40 percent of it or 30 percent or 50 or whatever it proves to be, and beyond that you cannot produce it in this country, can you? Secretary WEEKS. No.

Senator MALONE. All right; that is enough.

Let's get on with it.

Now, the President can, then, regardless of any finding of th Tariff Commission, regardless of any provisions whatever, sacrific part or all of any industry if he thinks it will further his foreign polic and makes these trades.

Secretary WEEKS. He has stated publicly that he does not inten to sacrifice

Senator MALONE. He has done it so what difference does it make as to what he has said. What he says doesn't make any difference, any more than it did under Truman. What he is doing is what counts. And I like this President; you know I do.

Secretary WEEKS. He has not penetrated the peril point once. You continue to say he can, but he has not done it and he has said publicly he would not do it.

Senator MALONE. He never said publicly that he would not go below the tariff point and if he has, I want you to put it in the record. Secretary WEEKS. Not specifically.

Senator MALONE. Of course he didn't.

Secretary WEEKS. But he has said that he would not stand by and see any industry placed in jeopardy.

Senator MALONE. But my friend, he has.

We are going out of business, and he probably doesn't know it. Secretary WEEKS. I do not think the record of our manufacturing exports and imports indicate we are going out of business.

Senator MALONE. I know, but the boys are out of business. Crockery is out of business, textiles are down, the mineral people are out of business, and I can name you so many, but I do not want to take your time because I know other Senators have questions.

What he is doing is what counts, and if that sound barrier is between the Cabinet and the White House, I think you ought to penetrate it, because he would never say a thing like that if he knows what is going on. I know the President, and I like him personally. I just do not vote for 2 or 3 things he is for; that is, billions to Europe to build these plants to compete with us, and free trade to divide the American markets with the foreign nations that we are subsidizing, and we have already priced ourselves out of every foreign market except when we subsidize the products, so I am not for that. But that is his business. We elected him, and I am for him, and I would be for him tomorrow if he were running.

Secretary WEEKS. Senator, from your standpoint, you are much better off with this new bill than you are with the present legislation. Senator MALONE. I just hope that we do not have any of it and then we would be in business again very quickly, 6 months and 2 months respectively, on the multilateral and bilateral agreements as I outlined to you.

Mr. Secretary, now I want to ask you a further question. We have settled now that the President can make any trade agreement that he wants to make.

Secretary WEEKS. Within the limits

Senator MALONE. Of course, that is understood.

Secretary WEEKS. Of the statute.

Senator MALONE. But the limits are so wide that no one in this Nation can operate under that limit if he uses it. Now he can do it if he wants to under this legislation.

We have established that, and I hope we do not have to go into it again.

Now in the rules and regulations of GATT, we have a document here which I hope I can find quickly.

It is a General Agreement on Tariffs and Trade, present rules and proposed revisions. I do not understand how you do not call this an