To counter this the administration at least must have authority to reduce our tariffs by 25 percent during the same 5 years that the Common Market countries have already agreed to reduce their tariffs against each other by 30 percent. Only then will American goods stand a chance of maintaining their share of this growing market, already worth almost $3 billion a year; and only then will Europe avoid the temptation to close its eyes to the rest of the world and tend only its own garden.

There is another reason the administration needs the 5-year extension and the authority to reduce tariffs by 25 percent. It needs these in order to strengthen and to take maximum advantage of the General Agreement on Tariffs and Trade, commonly known as GATT. The unique contribution of GATT lies in the multilateral trade concessions which have been and can be worked out under it. By negotiating a number of trade concessions to which 37 nations are a party, many more of the requirements of each nation have been met. In fact, the 37 contracting parties to GATT, which together represent 80 percent of world trade, have worked out trade concessions covering more than two-thirds of their combined imports. Still more can be done if Congress passes the administration's bill intact, thereby providing greater time and certainty with which to plan and negotiate.

But there is one thing the multilateral GATT lacks and needs very badly. That's an administrative setup to handle disputes, administer the rules, and coordinate the entire program.

Under United States initiative, the member nations of GATT have negotiated a blueprint for such an administrative setup which is known as the Organization for Trade Cooperation (OTC). Thus far, however, our Congress has refused to approve United States membership in OTC and until it does, OTC cannot function nor can the GATT operate at maximum efficiency.

Thus far we have examined primarily the foreign aspects of foreign trade. The Kremlin's cold war, its threat of hot war; and the importance of more foreign trade in meeting the two-pronged challenge. We have also examined the significance of the 5-year extension and the 25 percent tariff reducing authority for our future trade and political relations with the Common Market nations of Europe and for strengthening and taking maximum advantage of the all-important General Agreement on Tariffs and Trade.

DOMESTIC ECONOMY

Now let us turn briefly to the importance of foreign trade to our domestic economy. I have already mentioned the $2.8 billion worth of goods which American industries sold to the 6 Common Market countries last year. But let's look at the broader picture.

Last year we in the United States sold a total of almost $20 billion worth of goods and services to other countries. This $20 billion export business of ours is greater in value than all consumer purchases of automobiles and automobile parts, and it's greater than all nonfarm housing construction. Moreover, it's not confined to just a few companies or industries. Nearly every branch of American industry which produces movable goods exports some of its products, and the major export industries greatly influence the pace of business activity in the whole country.

And please don't ever forget one thing. Unless we want to be paid in cruzeiros or drachmas, our foreign purchasers must have some means of earning dollars in order to be able to pay us in dollars. And this can only be done if we lower our tariff barriers and buy those foreign goods which are unavailable here or which are, without high tariffs, less expensive than our own-a policy which would not exactly be against the interests of the American consumer.

There is another fact about foreign trade which is especially important in time of recession. Some 4.5 million Americans depend directly on our foreign trade for their jobs. Any curtailment in our imports would mean a loss of jobs not only to some of the 1.3 million Americans employed in handling and processing imported goods, it would also mean a loss of jobs to some of the 3.1 million employed in our export industries, since a drop in imports means a drop in dollars foreign buyers have to buy from our export industries.

UNITED STATES IMPORT NEEDS

But there's another, even more important reason for increasing our imports. By 1975 the Paley Commission report estimates we will have to import at least 20 percent of our total raw materials requirements and no less than 55 percent

of our metals requirements. We simply must import to conserve our own rapidly vanishing resources. We also must import in order to help build up the economies of the underdeveloped countries which alone can supply us with many of these vital raw materials, for it is inconceivable to me that they can remain free or stable enough to sell us their raw materials unless their overall economies achieve a status of vigorous general growth-and this they cannot do without more trade with us.

But, you must be asking yourselves, what about all those American industries that are being ruined by foreign imports. According to the Department of Commerce, from April 1948 to March 1957, 9 years time, imports into this country accounted for something less than 28,000 job displacements in those industries producing the 23 commodities which, according to the Tariff Commission, were injured by foreign imports.

It has also been estimated that if all of our tariff barriers were suddenly pulled down, and this will never happen, the maximum job displacement which would occur would run to perhaps 150,000 jobs. This is only a fraction of 1 percent of our total labor force and less than one-fifth of the some 800,000 Americans who temporarily shift to the unemployed ranks each month, year in and years out. Furthermore, the job displacement brought about by the ending of all tariff barriers in this country would not necessarily mean that much unemployment. The increased imports that would result would produce more foreign-held dollars which must be used, sooner or later, to buy the products of our export industries-and this means more jobs for our workers in those industries.

In closing, let me leave you with three key words which to me summarize the reasons why we must have more trade and fewer barriers. Necessity, opportunity and. yes, responsibility.

The cold war, the threat of hot war and our own dwindling resources make more trade a necessity.

The vast potential material gain in new products and lower prices for ourselves and our neighbors make more trade a tremendous opportunity.

And the imperative of stopping the present trend whereby the majority of mankind get poorer, in absolute or relative terms, while we the minority continue to prosper-for awhile, this makes more trade a responsibility—of each and everyone of us.

Hon. HARRY F. BYRD,

Chairman, Committee on Finance,

United States Senate, Washington, D. C.

WESTREX CORP.,

New York, June 19, 1958.

DEAR SENATOR BYRD: This letter, addressed to you as chairman of the Committee on Finance, is in support of the bill to extend the Trade Agreements Act, H. R. 12591. I request that this letter be made part of the official record of the hearings on this bill.

Foreign trade and the Trade Agreements Act, which this bill would extend, are important to the Westrex Corp.

Westrex is, essentially, an export organization. It has been in foreign trade for approximately 30 years. We have 200 employees in the United States, located in New York and Hollywood, and approximately 1,100 abroad. More than 85 percent of the Westrex gross revenue is derived outside of the United States. Exports from the United States produce more than half of the gross revenue obtained abroad, services and local manufacturing accounting for the balance. We design and fabricate some of the goods which we export, but the majority of these goods are obtained from other United States suppliers.

H. R. 12591 as passed by the House of Representatives has some serious shortcomings, but, even so, it is highly important that this legislation should be enacted in its present form. If this bill is weakened with further amendments, ostensibly designed to give greater protection to domestic producers, the exports and imports of this country will suffer.

If any amendments are made, they should be amendments which would make this bill more genuinely an instrument to promote international trade. For example, it would be desirable to eliminate the provision which would permit the President to increase tariffs to 50 percent above the 1934 level. If the exports of Westrex Corp. are reduced substantially, we will be forced to reduce the number of our employees. Loss of export business now handled by Westrex will also affect our suppliers. During the past 2 years, Westrex has

exported approximately half the total output of at least 2 of its suppliers. A reduction in Westrex exports will affect such people nearly as directly as it will our own organization. Attached to this statement is a copy of a letter from one of our suppliers.

Foreign countries want to buy goods from our country, but to do so they need to earn dollars with which to pay for such goods. If we restrict their power to earn dollars, they must decrease their purchases of goods from us. This is not

the way to win friends and influence people favorably toward us. In fact, it makes poor friends out of good ones. And it forces these countries to look elsewhere for their trade. To Russia, possibly.

Certain industries in this country oppose the extension of the Trade Agreements Act because they want high-tariff protection for their goods to help them meet foreign competition in the United States market. Westrex designs its own products with high-priced American engineers, has them manufactured in this high-wage country, ships them all over the world, pays foreign import duties on them, competes with both local and international competitors, and still gets a substantial share of the available foreign market.

This shows that American efficiency can overcome high labor costs and permit American goods to compete in foreign markets. The same must be true in many other industries. In those cases where this is not true, the law provides ample protection. Inevitably, however, continued tariff protection for domestic industries takes away a major incentive to meet competition by seeking to improve product and reduce costs. It also hurts all producers who export any of their goods by reducing foreign earnings and, thereby, reducing the markets for all American goods.

The goods exported by Westrex provide jobs for Americans, build up needed skills in this country, and, in general, are just as desirable as production generated by domestic traders. American export industries are injured by high tariffs and other import restrictions. If it is reasonable to provide high tariffs to protect domestic industry against foreign competition, it would be just as logical to help exporters meet their foreign competition by giving them a subsidy to cover their shipping costs and foreign import duties. Westrex does not advocate such a subsidy; we merely wish to point out that a subsidy would be just as logical as a high, protective tariff. In fact, a protective tariff is simply a form of subsidy.

Anything that tends to remove artificial restrictions from trade reduces friction and tension throughout the world. What we need now is not only an extension of the Trade Agreements Act but, also, a liberalization of it.

The act should be extended for 5 years to minimize frequent upsets or possible changes in policy resulting in uncertainty on the part of nations with whom we trade. It is particularly important at this time that the extension be long enough to allow this country sufficient time to fully complete negotiations with the European Common Market. Careful and continuous negotiation over a number of years will be required to insure full access of American goods to this market. Westrex, for one, would suffer substantially if tariff differentials effectively closed the European Common Market to goods from the United States, for France, among other Common Market countries, has been one of our best customers.

Sincerely yours,

WESTREX CORP.,

New York, N. Y.

R. E. WARN.

C. S. ASHCRAFT MANUFACTURING CO., INC.,
Long Island City, N. Y., February 21, 1958.

(Attention: Mr. Edward Warn, vice president.)

DEAR MR. WARN: Regarding the matter of the importance of foreign trade to our company, let me say that it is of the utmost importance. I do not believe that, at the present time, our company could continue to exist without the business that it receives from the Westrex Co.

There was a temporary boom in our business during the years of 1953 to 1956, due to the building of many large drive-ins throughout the United States and the introduction of wide-screen pictures in the indoor threaters. This business is now finished and, therefore, domestically, the sales are at an extremely low level.

Due to the rapid strides made in television, the divorcement of producing companies from the exhibition of the pictures, and various other causes, the exhibitors of motion pictures, who are our customers, find the going very difficult and are limiting their sales to essentials for maintaining their present equipment. The sale of major equipment which we manufacture is almost beyond the capacity of the hard-pressed theater owners to purchase. This is not due to any lack of diligence on our part, as the cost of our research has increased rapidly during the past 2 years; it is merely an economic condition that exists in the motion-picture industry.

During the period from 1953 to 1956, our company employed as many as 60 workers. During the past year, we were forced to lay off a substantial number of these men; the remaining 33 percent are largely employed in the production of equipment for export through your company. If, for any reason whatever, you found it impossible to continue to purchase our equipment, it would work a severe hardship on our company. Your excellent combination of sales force and engineers has done a marvelous job in the distribtion and maintenance of our products, and we hope that this will continue.

Sincerely yours,

C. S. ASHCRAFT, President.

STATEMENT OF THE BUFFALO CHAMBER OF COMMERCE

The Buffalo Chamber of Commerce, comprising an association of 3,300 business executives and 2,200 firms in the Niagara Frontier, strongly supports the proposal to renew the Reciprocal Trade Agreements Act for at least a 5-year period. We urge the act's extension after July 1 in order to maintain and expand jobs and the welfare of the people of western New York, as well as to advance national interests.

In the business community served by the Buffalo Chamber of Commerce, there are more than 400 firms actively engaged in foreign trade. The Buffalo area, one of the great industrial centers of the Nation, produces a long and varied list of manufactured products which are marketed abroad. Among them are flour, feed, and cereals; pharmaceuticals and drugs; automotive parts, accessories, tools, and supplies; musical instruments and record players; chemicals; dental, surgical, and scientific instruments; machinery of all types (sugar mill, cloth cutting, food processing, metalworking, packaging, chemical, etc.); hospital equipment; furniture; abrasives; business machines; electrical equipment; motors; pumps; heat exchanges, etc.

The sale of Buffalo-made products abroad is necessary to maintain low unit production costs and to maintain local full employment. In the year ending August 1957, the Buffalo customs district handled $832 million of exports; even that large figure is not the complete story, inasmuch, as large quantities of Buffalo-made products are cleared through New York City and other seaboard ports.

It is axiomatic that international trade must be two way; that imports are paid for with exports and that the volume of exports depends upon imports. Any backward step to a national policy of high-tariff protectionism would bring idle plant capacity, unemployment, and economic recession to our area.

We estimate that 30,000 to 35,000 jobs in western New York depend upon export-import trade. With the opening of the St. Lawrence seaway, a further expansion is eagerly sought of international trade at the port of Buffalo. Fiftyone foreign ships docked at Buffalo in 1957; we anticipate that the number of these ships and the volume of tonnage they carry will rapidly increase. Certainly, it would be inconsistent for the Federal Government to make a heavy investment in the St. Lawrence seaway and then to stultify its use by a restrictive international trade policy.

From a national point of view, also, the supplying of foreign markets with dollar exchange by importation of goods and services is necessary to maintain a high level of United States manufacturing and employment. The Reciprocal Trade Agreements Act, in effect since 1934, has been a prime factor in increasing production and jobs. The rise of $2 billion in 1957 over 1956 in exports was the equivalent to more than half the increase in the volume of all goods and services produced in the United States last year.

The extension of the act at this time is of worldwide political importance. The promises of the Soviet Union have already caught the imagination of peo

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ples of less-developed countries. If the United States pulls into its shell by restraining imports, the economic interest of those countries must necessarily be oriented toward Russia, thus adding to the perils now facing the free world.

If American exports be maintained, while imports are curtailed, the dollar gap would widen. The gap could be filled by increased foreign aid handouts. But that would mean adding to the heavy burden of taxation on American business and individual taxpayers for the benefit of special groups enjoying tariff protection. Properly understood, such a policy would be highly unwelcome both to the giver, the United States taxpayer, and to the recipient. Trade, not aid, is the only sound and durable base for our foreign relations.

Another reason that the United States should maintain an expansionary foreign-trade posture is the impending economic integration of Western Europe. The Common Market, with its 170 million consumers, will become an area of unrestricted trade as extensive as that of the United States. The United States in its own interest, cannot afford to forgo its share in this development by withholding the opportunity to this vast population to earn enough dollars to buy all it wants of the products of American farms and factories.

In renewing the Reciprocal Trade Agreements Act, it would be preferable to extend it for 10 years. The shortness of the act's renewals in the past has made long-range business planning risky. Businessmen need the certainty and stability that go with periods of time reasonably needed to build efficient marketing organizations.

The escape-clause feature, although not frequently used, has been a deterrent to confidence that a successful importing program will not suddenly be destroyed. If its use is continued, it should be restricted as a temporary reprieve, rather than applied as permanent protection, so that the lower limit of the tariff would be restored at the end of the reprieve.

The Buffalo Chamber of Commerce has long urged simplification and certainty in the administration of customs. Our Canadian friends have complained more about the delays and annoyances resulting from practices in valuing merchandise than about the levels of our rates of duties. What is needed is adoption of tariff nomenclature fixed by the Brussels convention of 1955 to remove present uncertainties of classification and import tax.

The American economy has never been and never will be self-sufficient. Protectionism may temporarily shield a few at the expense of the many. In the long run, restricting imports destroys national wealth and job opportunities. Foreign giveaways to stimulate United States exports subtract also from national wealth. Economically, it is in the hardheaded self-interest of the United States to encourage import as well as export trade expansion. And, because of our vital stake in the political fate of other nations, we must keep open those arteries of free world trade. Economic interdependence is the firmest of international political ties. Reciprocity in trade is vital to world peace.

STATEMENT FILED BY C. C. WALTHER, PRESIDENT, WALTHER BROS. Co., INC., AND WALTHER PAINT CO., INC., NEW ORLEANS, LA.

My name is Curtis C. Walther, president of Walther Brothers Co., Inc., and Walther Paint Co., Inc., of New Orleans, La. I have been a resident of New Orleans since 1920, being a native-born Louisianian. Living in this important port city of the United States, I, early in my business career became interested in foreign trade.

I was one of the original organizers of International House and was president of that organization for the years of 1951-52. I am a past president of the Chamber of Commerce of the New Orleans area, having served two terms in 1949-50. I was one of the organizers in the International Trade Mart of New Orleans and presently a member of its board of directors. I am presently president of the Foreign Policy Association of New Orleans, and was chairman of the Mississippi Valley World Trade Council for the years 1955–56.

During my presidency of International House, I headed trade missions of business men and women to Guatemala, Mexico, Colombia, and Cuba, and in the year 1954 headed the International House trade and travel mission to 7 European countries, where we visited international trade fairs in Milan, Italy; Hanover, Germany; Brussels, Belgium; and London, England. On all of these trips our group program was arranged officially by the heads of foreign trade departments of these foreign countries, which brought us into direct contact