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TRADE AGREEMENTS ACT EXTENSION

ger, Departmenill come to order: 12591, extension

FRIDAY, JUNE 20, 1958

UNITED STATES SENATE,
COMMITTEE ON FINANCE,

Washington, D. C. The committee met, pursuant to call, at 10:10 a. m., in room 312, Senate Office Building, Senator Harry Flood Byrd (chairman) presiding.

Present: Senators Byrd (chairman), Kerr, Frear, Long, Anderson, Douglas, Williams, Flanders, Malone, Carlson, and Bennett.

Also present: Elizabeth B. Springer, chief clerk.
Stanley D. Metzger, Department of State.
The CHAIRMAN. The meeting will come to order.

The committee has under consideration H. R. 12591, extension of the reciprocal trade program. I submit for the record a copy of the bill as well as a brief analysis of the provisions therein.

(The analysis and bill follow:) General authority.-Authority of the President to enter into trade agreements is extended from June 30, 1958 to June 30, 1963 (sec. 2).

Tariff reductions.--Authority is granted to reduce tariffs by (i) reduction of rates existing on July 1, 1958 by 25 percent in stages of not more than 10 percent in any 12-month period; (ii) reduction by 2 percentage points (or its equivalent) as an alternative to (i) with no more than 1 percentage point reduction in any 12-month period; (iii) alternatively, a reduction to 50 percent ad valorem in no less than 3 annual stages, each limited to one-third of the total reduction (sec. 3 (a) (8)).

Tarif increases.-Authorization to increase tariffs to a rate of 50 percent above the rate existing on July 1, 1934 (instead of 50 percent above the January 1, 1945 rate, as in the present act) (sec. 3 (c)).

Escape-clause procedure.—The present escape-clause procedure is retained with the following modifications in the procedure: (a) Escape-clause investigations and reports are to be completed by the Tariff Commission in 6 months (instead of the present 9 months) (sec. 5 (b)); (b) subpena powers granted to the Tariff Commission in escape-clause proceedings (sec. 9 (a)); (c) duty-free items bound in trade agrements may be transferred to the dutiable list and rates imposed up to 50 percent ad valorem (sec. 5 (c)); (d) organization or groups of employees are granted authority to file an application for escape-clause proceedings (sec. 5 (a)) (e) a Presidential disapproval of a Tariff Commission recommendation may be overridden by the adoption of a concurrent resolution by a two-thirds vote of both houses. Such a resolution would be a privileged matter in order to expedite congressional consideration (sec. 7).

Peril-point procedure.-The present peril-point authority is amended by (a) making an escape-clause investigation automatic whenever the Tariff Commission finds in a peril-point report that an increase in duty over existing levels is necessary to prevent injury (sec. 4 (b)); (b) peril-point investigations and reports are to be completed in 6 months (instead of the present 4) (sec. 4 (a)).

National security amendment.-(a) The national security amendment is amended to specify certain of the factors which are to guide the ODM in considering whether imports are threatening to impair the national security (sec. 8 (c)); (6) ODM is to carry out an investigation upon application of an interested party or upon the motion of the head of any agency of Government, including the Director of the ODM (sec. 8 (b)); (c) the investigatory procedure of ODM is altered to provide (b) Subsection (b) of section 3 of the Trade Agreements Extension Act of 1951, as amended (19 U. S. C., sec. 1360 (b)), is amended by adding at the end thereof the following new sentence: “If in the course of any such investigation the Commission shall find with respect to any article on the list upon which a tariff concession has been granted that an increase in duty or additional import restriction is required to avoid serious injury to the domestic industry producing like or directly competitive articles, the Commission shall promptly institute an investgation with respect to that article pursuant to section 7 of this Act."

Sec. 5. (a) The first paragraph of subsection (a) of section 7 of the Trade Agreements Extension Act of 1951, as amended (19 U. S. C., sec. 1364 (a)), is amended by striking out "any interested party' and inserting in lieu thereof "any interested party (including any organization or group of employees)”.

(b) (1) The first paragraph of section 7 (a) of such Act is amended by striking out "nine months' and inserting in lieu thereof "six months”.

(2) The amendment made by paragraph (1) shall apply only with respect to applications made after the date of the enactment of this Act.

(c) Section 7 of the Trade Agreements Extension Act of 1951, as amended (19 U. S. C., sec. 1364), is amended by adding at the end thereof the following new subsection:

"(f) In carrying out the provisions of this section the President may, notwithstanding section 350 (a) (2) of the Tariff Act of 1930, as amended, impose a duty not in excess of 50 per centum ad valorem on any article not otherwise subject to duty."

Sec. 6. Subsection (c) of section 7 of the Trade Agreements Extension Act of 1951, as amended (19 U. S. C., sec. 1364 (c)), is amended by inserting “(1)after"(c)” at the beginning thereof, and by adding at the end thereof the following:

“(2) The action so found and reported by the Commission to be necessary shall take effect (as provided in the first sentence of paragraph (1) or in paragraph (3), as the case may be) .

(A) if approved by the President, or

"(B) if disapproved by the President in whole or in part, upon the adoption by both Houses of the Congress (within the 60-day period following the date on which the report referred to in the second sentence of paragraph (1) is submitted to such committees), by the yeas and nays by a two-thirds vote of each House, of a concurrent resolution stating in effect that the Senate and House of Representatives approve the action so found and

reported by the Commission to be necessary. For the purposes of subparagraph (B), in the computation of the 60-day period there shall be excluded the days on which either House is not in session because of an adjournment of more than 3 days to a day certain or an adjournment of the Congress sine die.

"(3) In any case in which the contingency set forth in paragraph (2) (B) occurs, the President shall (within 15 days after the adoption of such resolution) take such action as may be necessary to make the adjustments, impose the quotas or make such other modifications as were found and reported by the Commission to be necessary.

Sec. 7. (a) The following subsections of this section are enacted by the Congress:

(1) As an exercise of the rulemaking power of the Senate and the House of Representatives, respectively, and as such they shall be considered as part of the rules of each House, respectively, but applicable only with respect to the procedure to be followed in such House in the case of resolutions (as defined in subsection (b)); and such rules shall supersede other rules only to the extent that they are inconsistent therewith; and

(2) With full recognition of the constitutional right of either House to change such rules (so far as relating to the procedure in such House) at any time, in the same manner and to the same extent as in the case of any other

rule of such House. (b) As used in this section, the term "resolution" means only a concurrent resolution of the two Houses of Congress, the matter after the resolving clause of which is as follows: "That the Senate and House of Representatives approve the action

“(1) found and reported by the United States Tariff Commission to be necessary to prevent or remedy serious injury to the respective domestic industry, in its report to the President dated , 19 , on its escapeclause investigation numbered under the provisions of section 7 of the Trade Agreements Extension Act of 1951, as amended (19 U. S. C., sec. 1364), and

"(2) disapproved by the President in whole or in part in his report (dated

, 19 ) pursuant to the second sentence of paragraph (1) of section 7 (c) of such Act.", the blank spaces therein being appropriately filled; and does not include a concurrent resolution which specifies more than one such investigation.

(c) A resolution with respect to an investigation shall be referred to the Committee on Finance of the Senate or to the Committee on Ways and Means of the House of Representatives by the President of the Senate or the Speaker of the House of Representatives, as the case may be.

(d) (1) If the committee to which has been referred a resolution with respect to an investigation has not reported it before the expiration of ten calendar days after its introduction (or, in the case of a resolution received from the other House, ten calendar days after its receipt), it shall then (but not before) be in order to move either to discharge the committee from further consideration of such resolution, or to discharge the committee from further consideration of any other resolution with respect to such investigation which has been referred to the committee.

(2) Such motion may be made only by a person favoring the resolution, shall be highly privileged (except that it may not be made after the committee has reported a resolution with respect to the same investigation), and debate thereon shall be limited to not to exceed one hour, to be equally divided between those favoring and those opposing the resolution. No amendment to such motion shall be in order, and it shall not be in order to move to reconsider the vote by which such motion is agreed to or disagreed to.

(3) If the motion to discharge is agreed to or disagreed to, such motion may not be renewed, nor may another motion to discharge the committee be made with respect to any other resolution with respect to the same investigation,

(e) (1) When the committee has reported, or has been discharged from further consideration of, a resolution with respect to an investigation it shall at any time thereafter be in order (even though a previous motion to the same effect has been disagreed to) to move to proceed to the consideration of such resolution. Such motion shall be highly privileged and shall not be debatable. No amendment to such motion shall be in order and it shall not be in order to move to reconsider the vote by which such motion is agreed to or disagreed to.

(2) Debate on the resolution shall be limited to not to exceed ten hours, which shall be equally divided between those favoring and those opposing the resolution, A motion further to limit debate shall not be debatable. No amendment to, or motion to recommit, the resolution shall be in order, and it shall not be in order to move to reconsider the vote by which the resolution is agreed to or disagreed to.

(f) (1) All motions to postpone, made with respect to the discharge from committee, or the consideration of, a resolution with respect to an investigation, and all motions to proceed to the consideration of other business, shall be decided without debate.

(2) All appeals from the decisions of the Chair relating to the application of the rules of the Senate or the House of Representatives, as the case may be, to the procedure relating to a resolution with respect to an investigation shall be decided without debate.

(g) If, prior to the passage by one House of a resolution of that House with respect to an investigation, such House receives from the other House a resolution with respect to the same investigation, then-.

(i) If no resolution of the first House with respect to such investigation has been referred to committee, no other resolution with respect to the same investigation may be reported or (despite the provisions of subsection (d) (1)) be made the subject of a motion to discharge.

(2) If a resolution of the first House with respect to such investigation has been referred to committee

(A) the procedure with respect to that or other resolutions of such House with respect to such investigation which have been referred to committee shall be the same as if no resolution from the other House with respect to such investigation had been received; but

(B) on any vote on final passage of a resolution of the first House with respect to such investigation the resolution from the other House with respect to such investigation shall be automatically substituted for the

resolution of the first House. Sec. 8. (a) Section 2 of the Act entitled "An Act to extend the authority of the President to enter into trade agreements under section 350 of the Tariff Act of 1930, as amended”, approved July 1, 1954, as amended by section 7 of the Trade

Agreements Extension Act of 1955 (19 U. S. C., sec. 1352a), is amended to read as follows:

“Sec. 2. (a) No action shall be taken pursuant to section 350 of the Tariff Act of 1930, as amended (19 U. S. C., sec. 1351), to decrease the duty on any article if the President finds that such reduction would threaten to impair the national security.

"(b) Upon request of the head of any Department or Agency, upon application of an interested party, or upon his own motion, the Director of the Office of Defense Mobilization (hereinafter in this section referred to as the 'Director') shall immediately make an appropriate investigation, in the course of which he shall seek information and advice from other appropriate Departments and Agencies, to determine the effects on the national security of imports of the article which is the shbject of such request, application, or motion. If, as a result of such investigation, the Director is of the opinion that the said article is being imported into the United States in such quantities or under such circumstances as to threaten to impair the national security, he shall promptly so advise the President, and, if the President determines that the article is being imported into the United States in such quantities or under such circumstances as to threaten to impair the national security, he shall take such action, and for such time, as he deems necessary to adjust the imports of such article so that such imports will not threaten to impair the national security.

"(c) For the purposes of this section, the Director and the President shall, in the light of the requirements of national security and without excluding other relevant factors, give consideration to domestic production needed for projected national defense requirements, the capacity of domestic industries to meet such requirements, existing and anticipated availabilities of the human resources, products, raw materials, and other supplies and services essential to the national defense, the requirements of growth of such industries and such supplies and services including the investment, exploration, and development necessary to assure such growth, and the importation of goods in terms of their quantities, availabilities, character, and use as those affect such industries and the capacity of the United States to meet national security requirements.

"(d) A report shall be made and published upon the disposition of each request application, or motion under subsection (b). The Director shall publish procedural regulations to give effect to the authority conferred on him by subsection (b).

(e) The Director, with the advice and consultation of other appropriate Departments and Agencies and with the approval of the President, shall by February 1, 1959, submit to the Congress a report on the administration of this section. In preparing such a report, an analysis should be made of the nature of projected national defense requirements, the character of emergencies that may give rise to such requirements, the manner in which the capacity of the economy to satisfy such requirements can be judged, the alternative means of assuring such capacity and related matters."

(b) The amendment made by subsection (a) shall not affect any action taken or determinations made before the date of the enactment of this Act.

Sec. 9. (a) Subsection (a) of section 333 of the Tariff Act of 1930 (19 U. S. C., sec. 1333 (a)) is amended to read as follows:

“(a) AUTHORITY TO OBTAIN INFORMATION.–For the purposes of carrying out its functions and duties in connection with any investigation authorized by law, the commission or its duly authorized agent or agents (1) shall have access to and the right to copy any document, paper, or record, pertinent to the subject matter under investigation, in the possession of any person, firm, copartnership, corporation, or association engaged in the production, importation, or distribution of any article under investigation, (2) may summon witnesses, take testimony, and administer oaths, (3) may require any person, firm, copartnership, corporation, or association to produce books or papers relating to any matter pertaining to such investigation, and (4) may require any person, firm, copartnership, corporation, or association to furnish in writing, in such detail and in such form as the commission may prescribe, information in their possession pertaining to such investigation. Any member of the commission may sign subpenas, and members and agents of the commission, when authorized by the commission, may administer oaths and affirmations, examine witnesses, take testimony, and receive evidence."

(b) Subsection (d) of section 333 of the Tariff Act of 1930 (19 U. S. C., sec. 1333 (d)) is amended by striking out "under Part II of this title" and inserting in lieu thereof "before the commission".

(c) (1) Subsection (a) of section 336 of the Tariff Act of 1930 (19 U. S. C., sec. 1336 (a)) is amended by striking out the third sentence thereof. The first sentence of subsection (c) of section 337 of the Tariff Act of 1930 (19 U. S. C., sec. 1337 (c)) is amended by striking out "under and in accordance with such rules as it may promulgate".

(2) Part II of title III of the Tariff Act of 1930 (19 U. S. C., sec. 1330, et seq.) is amended by inserting after section 334 the following new section: "SEC. 335. RULES AND REGULATIONS.

"The commission is authorized to adopt such reasonable procedures and rules and regulations as it deems necessary to carry out its functions and duties."

Sec. 10. The enactment of this Act shall not be construed to determine or indicate the approval or disapproval by the Congress of the executive agreement known as the General Agreement on Tariffs and Trade.

Passed the House of Representatives June 11, 1958.
Attest:

Ralph R. ROBERTS, Clerk. The CHAIRMAN. We are very happy to have the distinguished Secretary of State as our first witness today. Mr. Dulles, you may proceed, sir, to make your statement.

STATEMENT OF HON. JOHN FOSTER DULLES, SECRETARY OF

STATE

Secretary DULLES. Mr. Chairman and members of the committee, 4 months ago I spoke before the House Ways and Means Committee in support of the President's proposal to extend and strengthen the Trade Agreements Act.

I now direct myself to the bill which has come to this committee from the House of Representatives. That bill represents some alteration of the bill as originally introduced. The changes, however, are acceptable to the Executive and H. R. 12591 as received in the Senate has my full support.

The Secretary of Commerce will speak to you about the compelling reasons of domestic economic policy for strengthening and extending the Trade Agreements Act. The Secretary of Labor and the Secretary of Agriculture will doubtless present further convincing evidence of the importance of the program from the domestic viewpoint. I shall direct myself primarily to foreign policy considerations.

We live in a world which is new in terms of its political structure and its economic demands. Twenty countries have won their political independence within the last 15 years and this trend is likely to continue.

Seven hundred million people are directly involved in this rapid transformation from the long-established system of colonialism. The very rapidity with which this transformation is occurring presents a major problem-how to achieve and maintain political stability.

Mass aspirations follow these new grants of independence. They are contagious and spread to other lands. The demands for improved living conditions are insistent. No possible sources of assistance are dismissed out of hand. Present free-world nations may prefer to buy and sell within the free world. But if they are frustrated in their efforts to do so, they can be expected to direct their search elsewhere.

Although no international wars are being fought today, our security is menaced, not only by the vast Soviet military buildup, but by the efforts of International Communism to turn the worldwide changes to selfish use as stepping stones to world domination. If we are to com

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