with our counterparts in those countries. Forums and panel discussions were the order of the day, which gave us a most comprehensive insight into the problems that beset those who engage in foreign commerce. On the basis of my personal experience that resulted from manifold contacts as outlined in part in the foregoing paragraph. I have formulated a basic conclusion that motivated my request for permission to file a statement; namely, if we are to have world peace, we must have world trade. If we are to have world trade, we must eliminate as many trade barriers as possible. I sincerely request that your committee approve the extension of the Trade Agreements Act for a period of at least 5 years and continuing authority for a tariff reduction of not less than 25 percent. (1) The Trade Agreements Act is the legislative basis for United States trade policy for the past 24 years. The United States as the leader of the free world and the Nation with the largest volume of international trade obviously exerts the greatest influence on the course of the world trade and on the trade policies followed by the other nations. For the past 10 or 12 years United States leadership has been decisive in maintaining so large a part of world trade in private hands and in steadily reducing, on a worldwide scale, tariff and other artificial barriers to the international exchange of goods. We have made substantial progress toward world multilateral trade and convertibility of currencies which are major United States foreign economic policy objectives. A failure on our part to continue this legislation in an adequate form could only cause us to lose our leadership and gravely jeopardize the progress already made in these directions. It could spark a chain of events which would reverse the process of expanding world trade and lead to the development of mutually exclusive regional blocs economically insulated from each other and from the United States. Such regional trading areas are already forming. The direction in which they develop and whether, by increasing trading opportunities on a world basis, they realize the full potential benefits of the larger free-market area they are designed to comprise, depends heavily on United States action on this extension of the Trade Agreements Act. (2) Expanding exports and imports are essential to an expanding United States economy. Our continued economic development, our increasingly high standard of living, our greater productivity all depend upon higher volumes of trade. Four and a half million people or 7 percent of our labor force are directly or indirectly employed in this 2-way trade. About 9 percent of our movable goods are exported; this includes 11 percent of our machine tools, 26 percent of our mining and construction equipment, about one-fifth of our agricultural production. We cannot maintain or increase these exports unless imports increase. It is only through pursuit of a liberal trade policy on our part that our trading partners can themselves pursue such a policy; aside from our foreign aid and foreign investment it is only through increasing exports to us that other countries can earn the dollar to pay for our exports. The United States is a low-cost producer of a tremendous variety of products, in great demand around the world. The major limitation on our export sales is the dollars these countries can earn. Tariff protecting our less efficient and generally low-wage industries directly limit potential exports of our efficient, high-wage industries and work to prevent the kind of specialization on an international scale that has served us so well domestically in greater productivity and efficiency. With larger imports we would make perhaps fewer bicycles, less velveteen, less decorated chinaware, or glassware-but more electronic equipment, construction and mining machinery, transport equipment. Our highly productive industries would expand and, as more dollars were available to other nations, this would extend to a wide range of consumers' goods for which we are still the lowest cost producers in the world. These greater exports would lead automatically to greater United States imports of noncompetitive raw materials or components, to the benefit of both sides. (3) We need at least 5-year extension of the Trade Agreements Act to provide a minimum of stability in our foreign trade. One of the major problems in the forward planning so necessary in the conduct of any business has been the uncertainty caused by the successive expirations of the Trade Agreements Act and the questions raised each time about its renewal. This is damaging to confidence in the continuity of a liberal policy on our part and seriously inhibits full realization of the benefits such a policy can bring forth, both to ourselves and to the rest of the world. (4) The 6 European countries-France, Germany, Italy, Belgium, Netherlands, and Luxembourg—have now ratified the treaties which will set up, over a period of 12 to 15 years, a common market free of tariffs and quotas for the products of 160 million people. The first phase of this operation will take place in the next 4 to 6 years, during which period tariffs among the 6 will be reduced by 30 percent, and a common tariff at a level of the average of present tariffs will be established against all outside countries. We consider this development a major step in the right direction-the greater specialization, the increase in productivity brought about by large-scale production in this wider market area, can only result in higher living standards for all of the six countries. It can mean greater two-way trade between the area and the United States, provided we are able, through the extension of this Trade Agreements Act, to negotiate a reduction in the level of the average European tariff to be maintained against us. Our mutual trade can certainly increase, as it has always done, as countries increase their developments and raise their standards of living, but if we give notice, by failure to pass this legislation in meaningful form, that we are not prepared to maintain our liberal trade policy, there is the considerable danger that the direction which the six nations take in their development will be away from closer economic relations with us and toward the kind of closed trading system so disastrous to our goals of freer worldwide multilateral trade. It could lead to the kind of bilateralism and regionalism against which we have exerted our influence for many years. It could lead, increasingly, to our mutual economic isolation and reduction of our very considerable mutual trade instead of its increase, as both of our economies demand. There is no real solution, as many have maintained, in greater United States investment in plant and equipment inside the Common Market area in order to supply that market tariff free. Remittance of earnings in dollars and repatriation of capital will depend on European dollar earnings through increased exports of the area to the United States, and this can only be accomplished through a reciprocal reduction of tariffs. (5) Extension of the Trade Agreements Act is particularly important in view of the current business downturn. There can be no doubt that the recent decline in our exports has been a basic contributing factor in that downturn. For the sake of our economy, for the preservation of United States jobs which depend on exports, we need now the boost that passage of this legislation would give to our rate of business activity by removing the uncertainty, the crisis of confidence among our foreign customers that our trade policy is in danger of going backward. We cannot afford the kind of a downward spiral in our foreign trade and failure to extend this act would entail. Its inevitable consequence would be further pressure on our employment, our investment in plant and equipment and our economic activity. (6) Above all, extension of the Trade Agreements Act is essential to freeworld unity and security. All nations in this world of mutual dependence rely for their economic strength on foreign markets for their exports and on foreign sources of raw materials and other essentials for their imports. No alliance, political or military, can be strong unless it is supported by common economic ties and full faith by each in the cooperative effort of all. In the face of the new Soviet economic offensive-the new challenge to the United States in the field of trade, issued by the Kremlin-these ties and these opportunities become more crucial than ever to the security. A large part of the world is at stake. If we default, we may lose, for our principles of freedom and of competition, much of that world. The drive for economic development, for higher standards of living, is irresistible everywhere, and will be satisfied either within the traditions of freedom or by forced growth at the tragic sacrifice of the individual, characteristic of the Soviet system. This extension of the Trade Agreements Act will be a central factor in the choice the world makes as to the direction it will go. Hon. HARRY F. BYRD, Chairman, Committee on Finance, MOUNT HOLYOKE COLLEGE, South Hadley, Mass., June 23, 1958. United States Senate, Washington, D. C. DEAR SENATOR BYRD: As one long interested in international trade, both in my business career and now in academic life, I should like to submit for the record of your committee the following statement in support of the bill, H. R. 12591, to extend the Trade Agreements Act. At the very least, this bill should be enacted without further weakening amendments. Over the past quarter century our domestic economy has benefited in many ways from the reciprocal trade program. With the present lower level of economic activity in the United States we must be particularly careful to avoid actions which could make business conditions worse. While it can be said that foreign trade has been a partial cause of the present downturn, this is only because exports have declined. Unless the present is extended in the form passed by the House or better, there is every reason to think that exports would be even more adversely affected, worsening present business conditons. The effect of our trade policy on our relations with other nations is of the greatest importance, too. Recent events in Latin America demonstrate the difficulties we create for ourselves when we restrict imports from friendly nations. At a time when the Soviet Union has openly proclaimed its intention to win world domination by means of its economic offensive, the United States must not appear to be retiring from the contest by reverting toward economic isolation. We are spending $40 billion on defense to prevent this Soviet domination. A proper extension of the Trade Agreements Act is also important for this same purpose, and rather than being a burden on the economy, as defense expenditures inevitably are, it is a positive stimulus to the economy. Indeed there is probably no Federal program today which contributes so much to our national welfare while at the same time being so consistent with our basic economic philosophy of free enterprise. Unlike certain other Federal programs, the very purpose of the trade-agreement program is to reduce Government interference with business. It serves to give the free-enterprise system a better chance to work, both at home and abroad. There is much evidence that foreign competition has had a healthy effect on our domestic economy; it plays a similar role as domestic competition in stimulating the production of better products with greater efficiency. Domestic producers are, of course, protected against genuinely unfair foreign competition, as for example in the case of dumping, by means of the Antidumping Act and other measures. Abroad it is to our interest to stimulate private enterprise and a belief in the workings of the free market. We cannot convince others that we really believe in private enterprise and competition, however, if we bring in the power of the Federal Government to eliminate an important element of competition for our domestic producers. The bill as passed by the House of Representatives, while useful in that it carries forward this valuable program with certain additional powers for the President, is not entirely satisfactory. Among the features of the bill which I feel are highly undesirable are the provisions which permit the President, pursuant to an escape-clause action, to increase tariffs by 50 percent over the 1934 level and the provision which permits the President to establish a tariff of up to 50 percent ad valorem on those items now bound on the free list. Under the circumstances, I think that it would be a grave disservice to this Nation if the Senate amended the bill in any way which made it easier to increase tariffs or which reduced the authority granted to the President. It would also be most unfortunate if the act were extended for less than 5 years. I most strongly urge that your committee report the bill favorably with no further amendments unless these were amendments to eliminate these undesirable provisions which I have mentioned. Sincerely yours, RICHARD GLENN GETTELL, President, Mount Holyoke College; Member of Committee on Commercial Policy of the United States Council of the International Chamber of Commerce. THE PORT OF NEW YORK AUTHORITY, Hon. HARRY F. BYRD, Chairman, Committe on Finance, United States Senate, Washington, D. C. DEAR MR. CHAIRMAN: The Board of Commissioners of the Port of New York Authority endorses and respectfully urges that the United States Senate renew the Reciprocal Trade Agreements Act for the full 5-year term incorporated in the legislation recently enacted by the House of Representatives. On behalf of our Commissioners, I would like to present the port authority's position with respect to this legislation and request that this letter be made a part of the record of he hearings and deliberations of your committee. Since 1934, the reciprocal trade agreements program has served as a cornerstone for the foreign economic policy of the United States. This program, by means of the reduction of tariffs and trade barriers on a mutually advantageous basis, has resulted in expanded international trade. This ever-increasing volume of trade, travel, and investment flow has unquestionably strengthened the economy of the United States and the rest of the free world. The expansion of trade and the strengthening of the economy have of course benefited the States of New York and New Jersey and their bistate harbor, the port of New York. Eight billion dollars worth of export-import cargo arrived and departed from this port by ship or airplane in 1957, and these benefits ultimately accrue to the entire natitonal economy. The importance of export-import trade to the New York-New Jersey metropolitan area is emphasized by the fact that port jobs provide a livelihood for at least 430,000 people in this great bistate region. These 430,000 jobs, in turn, furnish the ecoonmic basis of existence for 1 out of every 4 persons who live in the port district. Moreover, the port's handling of many millions of tons of waterborne commerce a year produces more than one-fourth of the total wages earned in the port district. The port of New York has therefore a vital interest in the continuance and expansion of the flow of international trade and commerce. This concern and interest was demonstrated by the States of New York and New Jersey in their port compact of 1921 which created the Port of New York Authority as their bitsate public agency. One of the basic responsibilities of the port authority is the development and promotion of commerce and trade through the port of New York. The conviction of the commissioners of the port authority that international trade is vital to the port's welfare and their faith in the future of this trade is proved by their continued approval of new and expanded programs and activities designed to promote the welfare of the port district and its 13 million residents. Thus, during the past 15 years, the port authority has invested $100.6 million in 5 great marine terminals in New York and New Jersey and has authorized the expenditure of an additional $60 million during the next 5 years in further improvement of its waterfront terminals. These new and modernized piers, cargo terminal buildings, ship berths, channels and supporting facilities accommodate a substantial portion of the 12,000 ships which enter New York Harbor every year. In its investment and authorized additional expenditures of $370 million in 4 great metropolitan airports, a large part of which has been spent for facilities to handle overseas air passengers and cargo, the port authority has also demonstrated its confidence that the welfare of the port, the two States, and the United States as a whole is founded on an ever-increasing interchange of people and goods between the nations of the world. So too is that confidence expressed in our trade-development and port-promotion program, on which the port authority spends $1 million a year. This activity includes a number of publications and other media designed to inform and assist overseas and domestic shippers in their handling of export-import trade to and from the United States. Similarly, the port authority's 3 overseas trade development offices in London, Zurich, and Rio de Janeiro as well as its 4 domestic offices in Washington, D. C., Chicago, Cleveland, and in downtown Manhattan have as their basic function and purpose, assistance and service to the shippers in the respective areas of Europe, Latin America, and this country for which they are responsible. It is the firm belief of the commissioners of the port authority that the objective of American tariff policy should be an orderly and progressive increase of international trade. Such a policy benefits each of the participating countries by providing the stimulus for the international exchange of goods. Equally vital is the increase of commerce among nations as a positive step toward world peace. Foreign trade is important to a much greater area of our national economy than just the export-import business directly concerned. It is important to everyone in the country who has labor, products, or services for sale. This truism has been amply demonstrated. The original purpose of the Reciprocal Trade Agreements Act-the increase of foreign trade through bilateral tariff reduction agreements between the United States and inidvidlau countries— has succeeded beyond expectatiton. Exports have increased from about $2 billion in 1934 to more than $20 billion in 1957, while imports have increased from about $1 billion in 1934 to almost $13 billion in 1957. For these reasons, the Port of New York Authority endorses a foreign-trade policy which encourages the freer movement of goods to and from the United States as best serving the economic welfare and security of the Nation. We respectfully urge therefore that your committee act favorably to extend for a 5-year period the Reciprocal Trade Agreements Act. DEAR SIR: With reference to the forthcoming meeting of the Senate Finance Committee to consider the passage of the administration bill for the renewal of the Reciprocal Trade Agreements Act, due to the fact that I am unable to appear before the meeting to testify in favor of the passage of this act, I am taking this opportunity of writing you my thoughts in this connection. This act is of great importance since it means a strengthening of our own economy and consequently the strengthening of the economy of the free world. I am urging your support and that of your committee for the extension of the Reciprocal Trade Agreements Act for a minimum of 5 years because this means expanded United States export trade and consequently millions of jobs, a strong United States bargaining position for negotiating tariff and trade problems during European Common Market developments, aid in our drive toward lower costs and lower prices of consumer goods through competitive imports, and finally, the necessary presidential authority for dealing with United States trade policy as an integral part of United States foreign policy. I sincerely hope that you and your committee will give this matter your most favorable consideration since it is in my opinion the most important legislative matter on the agenda at present. Very truly yours, LESTER GOODMAN. Hon. HARRY F. BYRD, Chairman, Committee on Finance, United States Senate, Washington, D. C. GULF OIL CORP., Pittsburgh, Pa., June 23, 1958. DEAR SENATOR BYRD: This letter, the attached statement and summary are submitted to you in connection with the Senate Finance Committee's consideration of H. R. 12591, Trade Agreements Extension Act of 1958. Last November, and again in February, Gulf Oil Corp. presented a statement of its longstanding views on this vital legislation, first, to the Subcommittee on Foreign Trade Policy, and then to the House Committee on Ways and Means. We should like this letter and the attached statement to be part of the record of your hearings. Gulf has consistently supported a 5-year renewal of the Reciprocal Trade Act as a necessary weapon in the coming struggle for world economic and political leadership. It is our firm belief that world trade is necessary to our domestic prosperity, to the growth and development of our free world friends, to win the cold war and to prevent a hot one-for trade may become our most critical battle with international communism. We were greatly encouraged by the recent action taken by the United States House of Representatives on this legislation and urge that the Senate Finance Committee recommend to the full Senate its speedy passage. Very truly yours, R. O. RHOADES. |