importance that the 5-year period be retained in the bill, and that a reduction of that period would surely place us as a Nation in a most difficult position vis-a-vis the European Community at a time when we will require a well understood and well established program of trade dealings with the other nations of the free world. I consider it fortunate that this great issue is being debated on the merits and not as a partisan political matter. The vote in the House, I suggest, is a resounding expression of the sentiment in the country on the issue. I sincerely hope that your distinguished committee will bring out the bill promptly and without crippling amendments. Respectfully, CHARLES D. HILLES, Jr. AMERICAN INSTITUTE FOR IMPORTED STEEL, INC., STATEMENT OF THE AMERICAN INSTITUTE FOR IMPORTED STEEL, INC., IN SUPPORT OF RECIPROCAL TRADE AGREEMENTS LEGISLATION Hon. HARRY F. BYRD, Chairman, Committee on Finance, United States Senate, Washington, D. C. DEAR SENATOR BYRD: This statement is submitted by the American Institute for Imported Steel, Inc., a nonprofit association of over 30 members, comprising the leading importers, foreign mill representatives, independent merchandisers, wholesalers and distributors of steel imported from Western Europe. (The members of the institute are listed in appendix A). Their knowledge, derived from the experience of many decades in international trade, is freely offered to the committee to aid it in appraising the vital need for a 5-year continuation of the reciprocal trade agreements program. It seems unaccountable that the continuation of the reciprocal trade agreements program, a national policy in force for decades, repeatedly approved by both political parties, endorsed and urged by both the Chief Executive and the legislative leaders of our Government, held to be essential to our national defense by the highest military advisers and necessary to our general welfare by the highest economic advisers, should still be the subject of objection. This is especially hard to understand when it is realized that in 1957 alone our exports exceeded imports by $8 billion. Yet objections are now again being made to your committee. These objections are grounded upon the fallacious proposition that the United States of America can survive as a viable political and economic entity without continuing commercial intercourse with its allies and friendly nations on a stable long-term basis. Modern history teaches the vital lesson that nothing could more adversely influence the course of the world struggle than the strangulation of international trade which would result from crippling the reciprocal trade agreements program. Our principal allies in Western Europe constitute a great industrial complex which must trade to exist. If we will not trade with them, then they must, to live, trade with the Communist bloc on Communist terms, with the risk of the ultimate Communist domination of the greater part of world trade. What this could do to the free world economy is foreshadowed by the effect upon the world markets in tin and other metals which even a mere 15 percent Communist control has recently had. "We will fail (to meet the challenge hurled by the Soviet leaders) if closed markets and foreign exchange shortages force free-world countries into economic dependence upon the Communist bloc." (The President's special message to Congress on extension of the Reciprocal Trade Agreements Act, 104 Congressional Record 1142). At our own suggestion and with our encouragement, the free nations of Western Europe are entering upon a new era of economic alliance to guard against this sinister threat. The European Economic Community will establish a common domestic market. They will also, over a period of years, establish a common world-trade market with uniform traiffs, import and export policies. But unless Western Europe can coordinate its common domestic market and common foreign market with a stable free world international trade pattern, stability and progress will not be obtained. The participation of the United States is essential to create a stable free world trading system because the United States accounts for 20 percent of world exports and 14 percent of imports and controls the entire dollar trading area of the globe. It is imperative, therefore, that the United States declare itself prepared, and the Executive be empowered, to coordinate its international trade with the entire free world, and achieve a sound free world economy. This is no overnight task. The President has estimated that it may take as long as 41⁄2 years for the common market to be well established, during all of which time numerous adjustments in tariffs and practices among the members of the free world market will have to be made. Accommodation of our own reciprocal trade agreements will be essential in our own direct economic interest as well as to insure the success of the new European economic structure and the stability of the world economic structure. Even to attempt to negotiate such accommodations on a short-term basis would be frustrating. The United States must have clear and continuing authority to help build a free world economy. Iron and steel are basic to the economy of Western Europe. Its steel industry, although smaller than our own, is proportionately even more important to it. More than 75 percent of our steel imports come from Western Europe. It is in our country's obvious material interest that the European iron and steel industry be strong and stable, an end to which the United States has devoted much time, effort and money through the Marshall plan and its successors. Moreover, this industry has led the way in free world economic cooperation through the European Coal and Steel Community, the precursor of the common market. This was made possible by and can be sustained only by the reciprocal trade agreements program. Nor does this reciprocal trade program in any way conflict with the short-term interests of our domestic iron and steel industry. The United States steel industry is the greatest and most efficient in the world. Under no conceivable circumstance could it be materially injured by imports which in 1957 were a trifling 1.02 percent of domestic steel production. On the contrary, our domestic iron and steel industry benefits from reciprocal trade by a margin of more than 4 to 1, as is evident from the following table of steel mill products trade derived from Department of Commerce statistics : As Life pointed out in its issue of June 23, 1958, page 102, even in an area in which one minor, nonstrategic business may have to meet import competition the local economy as a whole benefits overwhelmingly from the reciprocal trade program because of its great benefit to the major, strategic steel industry. Our coal and scrap industries have also been direct beneficiaries of reciprocal trade in steel. Shipments of coal and scrap to Western Europe have risen in connection with the flow of steel to the United States because Western Europe has been unable to supply a sufficient amount of these items for its mills. Coal exports in 1957 alone totaled over 80 million tons, valued at $828,683,874. Sixtyfive percent of all American coal exports are brought by Western Europe. In the past 5 years the excess of our scrap exports over imports has been constantly increasing: In addition to the immensely profitable export surplus in steel, reciprocal trade in steel provides many additional benefits for the economic well-being of the United States. Among the most important of these is the technical information and know-how of direct value to our country's national defense, as well as to its productive economy, received as a direct concomitant of product importation. Interlock sheet piling, now manufactured here, was originally invented by a Swedish engineer and developed in Germany. A European invention, the oxygen-converter steelmaking process, is now being installed by several American steel companies to increase productive capacity at lower cost. Similarly, the Germans developed the vacuum-steel degassing method subsequently adopted by both United States Steel and Bethlehem Steel. Also worthy of citation are the Sendzimir rolling process, a European invention developed here, the product of which is now an American export, and the Fretz-Moon pipeproduction method begun here, developed in Germany, and further refined again in this country. Reciprocal trade has enabled German and French steel producers, by selling here, to obtain dollar funds to buy from American manufacturers, at prices in the millions, continuous wide-strip mills and other rolling-mill equipment. In the last 5 years, these rolling-mill exports constituted up to one-third of our total production, and totaled almost a quarter of a billion dollars: The availability of imported materials not infrequently has enabled the establishment of new domestic manufacturers in coastal areas and saved small businesses from extinction in times of short domestic supply. Moreover, European mills welcome orders of relatively small size, orders which the large domestic mills normally do not desire because their productive facilities are geared to larger tonnages. Finally, not only the great port areas in which one-fourth of the working force is employed in international trade but the entire American economy benefits from the stabilizing effect of freer export and import trade in adjusting the imbalance between market areas of oversupply and areas of excessive demand. The free-enterprise system depends upon the free market place for its proper functioning. In today's world, the markert is and must be international, it must be stable, it must be enduring. To assure such stability and endurance necessitates a long-range reciprocal-trade program. It is, therefore, earnestly recommended that the reciprocal trade agreements program be extended for 5 years, as the President of the United States has requested and the House of Representatives has approved. Respectfully submitted. AMERICAN INSTITUTE FOR IMPORTED STEEL, INC., JUNE 27, 1958. Of counsel: Graubard & Moskovitz, New York. LIST OF MEMBERS American Mannex Corp., 233 Broadway, New York, N. Y. American Saar Steel Corp., 41 East 42d Street, New York, N. Y. Amerlux Steel Co., Monadnock Building, 681 Market Street, San Francisco, Calif. Artco Industrial Company, Inc., 60 East 42d Street, New York, N. Y. Bekaert Steel Wire Corp., 655 Madison Avenue, New York, N. Y. Belgian American Mercantile Corp., 441 Lexington Avenue, New York, N. Y. The Crispin Co., 1611 Bank of Commerce Building, Houston, Tex. Paul J. Devignez, Inc., 507 Fifth Avenue, New York, N. Y. Mr. R. W. East, 2510 Hillside Drive, Dallas, Tex. Ferric Industries, Inc., 122 East 42d Street, New York, N. Y. J. Gerber & Co., Inc., 855 Avenue of the Americas, New York, N. Y. International Selling Corp., 122 East 42d Street, New York, N. Y. Wm. H. Muller & Co., Inc., 122 East 42 Street, New York, N. Y. Ovingsteel, Inc., 30 Church Street, New York, N. Y. Pan American Trade Development Corp., 2 Park Avenue, New York, N. Y. Maurice Pincoffs Co., Melrose Building, Houston, Tex. Port Everglades Steel Corp., Port Everglades Station, Fort Lauderdale, Fla. Emile Regniers Co. (U. S. A.), Inc., 415 Lexington Avenue, New York, N. Y. Walter H. Rothschild & Co., Inc., 38 Park Row, New York, N. Y. Joseph L. Wilmotte & Co., Inc., 350 Fifth Avenue, New York, N. Y. (Whereupon, at 3:15 p. m., the committee adjourned, to reconvene at 10: 10 a. m., Wednesday, June 25, 1958.) |