area of the world have increased from $2.7 billion in 1950 to $4.6 billion in 1957. This vital trade with Latin America has an additional advantage to our American industries since virtually every dollar the United States spends in Latin America for strategic raw materials and commodities returns to the United States through Latin American purchases of our machinery and consumer goods.

Furthermore, during the period of the reciprocal trade program, the United States has been able to increase significantly its share of the market in Latin America. For example, in 1937 the United States had 35 percent of Peru's import market. By 1956 we had increased our share to 50 percent. In Chile, the United States increased its share of the import market from 29 percent in 1936 to 46 percent in 1956. However, during the past 2 years, as a result of increasing European competition, there has been a tendency for the United States share of the market to decrease. In addition, as is well known, as part of their economic war on the United States, the Soviets are making vigorous efforts to penetrate Latin America through the device of barter deals and tempting trade arrangements. The Latin American countries are heavily dependent upon the United States for trade which provides their livelihood and unless we give them some assurance of a continued stable trade policy they will be placed in the position of having to take seriously the Soviet offers in order to secure the trade outlets which they require.

As a matter of fact, the figures show that this process is already attaining substantial proportions. In the year 1952 Latin American exports to the Soviet bloc amounted to $21 million. By 1956 they had increased to $180 million, representing an increase of 757 percent. In 1952 Latin American imports from the Soviet bloc amounted to $25 million. In 1956 they had increased to $146 million, an increase of 484 percent. The total trade turnover, therefore, between Latin America and the Soviet bloc was $46 million in 1952 and $326 million in 1956, representing an increase of 609 percent.

Apart from the relatively small amounts of foreign aid which we are now providing to Bolivia and Haiti, Latin America does not receive, nor does it ask, grant aid from the United States. What these countries do want is to pay their own way through trade. They are receiving encouraging loan assistance from the Export-Import Bank and from the World Bank, but unless they can trade under reasonably stable tariff conditions their entire economic development and the repayment of their loans will be seriously jeopardized.

Latin America is a major supplier of many strategic raw materials which our industries require in times of peace and war. Latin America's overall economic development is progressing at a record level of 4.4 percent a year, which means ever-widening markets for American exports to this area.

It is our firm conviction that the reciprocal trade program has been the major stabilizing factor in developing our trade and protecting our markets in the countries of Latin America. It has assured our access to their strategic raw materials and has promoted their own economic development and prosperity which redounds in turn to our benefit. In our judgment it is the best piece of machinery devised to accomplish these purposes.

Our 100-year-old experience in trade and industry in North and South America has convinced us of the vital importance of the extension of the reciprocal trade program to the preservation of the United States economic and political relations with Latin America. We are convinced, furthermore, that the majority of the arguments which we have put forth apply just as forcibly to the maintenance of our economic and political relationship with the rest of the world as they do to Latin America.

It is our firm belief that it is a matter of self-interest, and even self-preservation, that this very vital and beneficial program be extended through the renewal of the Trade Agreements Act and we urge the passage of H. R. 12591 bill in its present form.

We have made wonderful progress in the field of foreign trade. Let us by all means continue and, if at all possible, accelerate the progress that has been made.

It would be appreciated if you could insert this communication in the record of your hearings on the Trade Agreements Act.

Sincerely,

PETER GRACE.

STATEMENT OF THE NATIONAL GRANGE ON EXTENSION OF THE RECIPROCAL TRADE AGREEMENTS ACT BY JOSEPH PARKER, LEGISLATIVE COUNSEL

The record of the National Grange for its support of measures to expand international trade is well known. Since the enactment of the Reciprocal Trade Agreements Act in 1934, the Grange has consistently supported the principle and efforts to expand foreign markets and world trade through the mechanism of trade agreements under which tariffs and other barriers to trade may be reduced or eliminated on a reciprocal basis thereby providing greater access to the markets of the world.

The Grange believes that regardless of the successes achieved or failures encountered to date we must continue our efforts to expand trade on a reciprocal basis. American farmers have a tremendous stake in seeing to it that the United States adopts and follows sound economic trade policies which will provide a basis for a constantly expanding level of world trade. It must be recognized, however, that there are compelling reasons for our looking with considerable concern on any attempt to remove recklessly or inconsiderately certain tariffs or regulatory measures which have been compelled by circumstances which necessarily reflect basic and fundamental differences in the economic and political structures of different countries. If we are to make real and continued progress in the direction of greater trade and freer movement of goods and services we must be willing to take cognizance of the real and substantial factors which underlie the seeming cconflict between measures which are designed to afford a degree of protection to our domestic economy and those having the general objective of freer trade. Unless we recognize these basic underlying factors and make provision to compensate for them until such time as appropriate adjustments may be made, the entire reciprocal trade concept may be placed in jeopardy. It is essential, therefore, that the removal of tariffs and other protective devices which have been established by virtually all countries to afford a measure of economic balance or for internal security purposes even though such removal is in the declared interests of expanding trade and improving economic opportunities for the vast majority of the people everywhere must be carried out or pursued with caution, deliberation, and understanding. The speed with which existing structures may be disrupted is a matter of vast importance and the utmost concern to individuals or groups of individuals who are directly affected by such action. Time and perhaps in some cases compensation in some form should be provided to prevent injuries to the few by policies which are adopted and used for the benefit of the many. These are factors which have made and will continue to make real progress toward expanding world trade difficult.

Much of the conflict revolving around our trade-agreements program does not stem from basic disagreement with the concept of expanding trade by bringing about mutually beneficial reductions in tariffs and import restrictions on a reciprocal basis. Instead the greatest controversy involves the means employed to achieve the ultimate objective and the administration of the measures employed. Complaints come from progressively widening sources that segments of our domestic economy which require some protection against unfair or injurious competition from imports do not receive adequate consideration in the administration of the Trade Agreements Act. There is much feeling that fully justifiable needs for some measures of protection to safeguard the well-being of our domestic economy are receiving insufficient consideration and are being subordinated to extraneous and perhaps overvalued diplomatic objectives contrary to the basic guidelines established by the Congress for the administration of the act. It must be recognized, we believe, that there is considerable evidence in support of some of the complaints which indicate that advice to the President against injurious tariff reductions and concessions is diluted and obscured in a maze of internal administration and in a mass of executive committees not primarily concerned with safeguarding our domestic producers against injury or constrained by the necessity of a strict adherence to the basic policy guidelines established by the Congress.

We believe, therefore, that greater efforts must be made to assure a proper administration and exercise of the trade agreements authority to make certain that the purposes as specified in the original Trade Agreements Act and the safeguards which have been subsequently established are fully respected and given effect.

However important may have been our gains under the Trade Agreements Act to date when measured in terms of dollar exports against dollar imports, the

fact remains that many barriers to the import of United States agricultural products still exist in many forms even by countries which do not produce such products or produce them in very limited amounts. Any extension of the trade agreements authority should, we believe, place a high priority upon the removal of these barriers to agricultural markets. Although agricultural exports last year were at a record level of about $4.7 billion dollars and with the bulk going to countries with which we have trade agreements, the fact remains that about 42 percent of such exports moved under direct Government programs such as gifts, barter, Public Law 480, etc. If commodities which move with the assistance of subsidies are included, the figure would approximate 70 percent. Thus, it would seem evident that agriculture is in rather a precarious situation as far as foreign agricultural markets are concerned. It is our judgment that there are many measures available to promote mutually profitable bilateral and multilateral trade more effectively and with less danger of disruption and dislocation of our own economy, than by relying almost entirely upon simple and direct reduction in tariffs. This belief again prompts reference to Grange programs which would give farmers greater opportunities to increase foreign markets. At the 91st annual session of the National Grange, the delegate body adopted the following statement on foreign trade policy:

"It is the recommendation of the committee that the National Grange in conformity with existing policy, should continue its support of efforts to expand international trade on a mutually benefiting basis, as was originally contemplated under our trade-agreements program.

"In the consideration or development of programs having as their objective the expansion or implementation of international trade, the committee believes that considerable care should be exercised so as to minimize the impact of such programs on domestic agriculture and industry and to avoid any weakening of our internal economy. In this connection the committee believes it desirable for the National Grange to reemphasize the importance of, and the need for, the maintenance, effective administration, and strengthening, if necessary, of the provisions of section 22 of the Agricultural Adjustment Act of 1933, to protect agriculture against excessive imports, and of section 32 of Public Law 320, 74th Congress, to expand markets for, and increase the consumption of, United States agricultural products. This reaffirmance is believed necessary because of the efforts which have apparently been made to weaken the effectiveness of these basic agricultural laws.

"Similarly, the committee also recognizes that appropriate procedures are also necessary to provide effective relief for products not covered by section 22, against excessive import competition. The procedures which are presently available should be reexamined to determine their adequacy and they should be strengthened where necessary to prevent undue injury.

"In view of the changing purposes and objectives of our trade-agreements program which have taken place in recent years, with ever-increasing emphasis being placed on the granting of trade and tariff concessions as a means of strengthening the economies of other nations of the world as a part of our fight against communism, the committee believes that careful review and some changes are needed in our trade-agreements policy so that no segment of American agriculture or industry shall be called upon to bear the entire burden of increased imports resulting from such policy. If tariff or trade concessions are made to further our foreign policy in the interests of our Nation as a whole, then the burden of such a policy should be borne insofar as possible by the Nation as a whole. It is the belief of the committee that better guidelines and controls need to be established by the Congress to assure fairness and equity to domestic producers in the carrying out of policies to expand international trade and it recommends that the National Grange should endeavor to develop and support policies toward that end."

The delegate body deemed it necessary to again emphasize the importance of section 22 of the Agricultural Adjustment Act and the need for it being given full effect to protect agriculture against excessive imports. This reaffirmance is believed necessary becouse of action taken under the Trade Agreements Act which impairs the effectiveness of the Agricultural Adjustment Act which was enacted in 1933 by the Congress as a basic protection to agriculture. Briefly, section 22 authorizes and directs the imposition by our Government under certain specified factual situations of import quotas or import fees to protect agricultural programs. In the administration of the Trade Agreements Act, representatives of the executive branch of our Government entered into

the General Agreement on Tariffs and Trade, generally known as GATT, whereby our Government in 1947 and again in 1955 pledged that no quota would be instituted or maintained on the importation of any product of any other contracting party. At the time this pledge was originally made, quotas under section 22 were in effect and subsequently others have had to be put into effect. As a result, this Nation was subjected to criticism and charged with violation of the terms of our pledge. To ameliorate the situation, representatives of our Government asked for a waiver of the pledge which had been given. A waiver was obtained, but only on condition that the United States would consult with other nations before taking further action under section 22, and would remove existing quotas on all farm products as soon as circumstances permitted. A progress report must be made once a year as to any quotas which are in effect and explanation must be given of the reasons therefor. In addition, the countries signatory to GATT have declared that the decision to grant the waiver does not preclude the right of affected contracting parties to have recourse under another article of GATT. This article provides that if no satisfactory solution is arrived at, the question of adjustment must be referred to the 35 members signatory to GATT for decision. In our judgment, this agreement by representatives of our Government committing the United States to a course of action contrary to existing specific provisions of law has seriously impaired the effectiveness of section 22 and the resultant criticism has not been conducive to the promotion of expanded trade. In 1951, section 22 was amended to provide that "No trade agreement or other international agreement heretofore or hereafter entered into by the United States shall be applied in a manner inconsistent with this section." It would, therefore, appear to be clear that any extension of the Trade Agreements Act at this time should reemphasize this prohibition against any agreement in derogation of section 22.

There are, of course, many products of the United States, both agricultural and nonagricultural, which do not receive protection under section 22 and which may suffer substantial injury from imports unless appropriate measures are adopted to give a measure of protection to domestic producers and at the same time do equity to the foreign country involved. For example, the "farmers of the sea," tuna fishermen in California, have suffered severely for the last several years because nothing has been done to reach a reasonable solution to the tuna import problem. In other instances, in which complaints have been made of severe injury from imports, such great delays have been encountered in the utilization of the remedies provided by the Congress as to aggravate the problem and to cause unwarranted injury. Admittedly problems of this kind are extremely difficult, but they cannot be swept under the rug. The longer effective solutions are delayed the greater the problem becomes. It is our belief that improved procedures need to be established to see that the safeguards in the Trade Agreements Act are applied promptly and in a reasonable manner. The achievement of this objective may well include a strengthening and a greater use of the United States Tariff Commission than has been made in the past in the administration of the trade agreements program.

It is our sincere judgment that the suggestions made herein by the Grange would strengthen the reciprocal trade program by creating greater confidence in those who feel that the administration of the program has been one-sided. As difficult as the assignment may be, we believe that we must constantly continue our efforts to expand trade with our friends abroad on a reciprocal and mutually benefiting basis. We must fight against economic warfare conducted through import restrictions but at the same time we must also protect ourselves against economic aggression which might result from the existence of excessive dispartity in the factors of production.

STATEMENT OF THE INSTITUTE OF AMERICAN POULTRY INDUSTRIES ON EXTENSION OF THE RECIPROCAL TRADE AGREEMENTS ACT, BY HAROLD WILLIAMS, PRESIDENT The Institute of American Poultry Industries is a nonprofit organization which was organized nearly 33 years ago. Its members include processors and distributors of poultry and eggs and their products and, in addition, producers, breeders, hatcherymen, and other allied interests.

The Institute of American Poultry Industries supports the extension of the Reciprocal Trade Agreements Act and its objective of expanding foreign trade

on a mutually benefiting basis through the elimination of unjust and unreasonable barriers to trade.

The importance of the poultry and egg industry in the United States is selfevident. Poultry and eggs are the third largest producer of cash farm income. Gross farm income from poultry and eggs is greater than the total income from corn and all other feed grains put together, including Government payments. It exceeds the income from wheat, or cotton, or tobacco, or from fruits and vegetables. The income produced by poultry and eggs is exceeded only by the income received from red meat animals and dairy products. The 4 million farmers involved in the production of poultry and eggs are located in almost every county in the United States. The farmers who produce poultry and eggs and those upon whom they rely to process and distribute their products are largely small-business men.

There has been little foreign trade in poultry products. Since the close of World War II, however, there has been a technological revolution in both the production and processing of poultry products. As a result of research, new breeds, new feeds, and new methods of processing have been developed. It is now possible to produce new meat-type chicken in 8 to 10 weeks, which, with new techniques in processing, are put in ready-to-cook form. This new-type high-quality product has resulted in virtually doubling per capita consumption. New markets are needed to provide additional outlets for our production.

American poultry products are produced under the full impact of the inexorable law of supply and demand. Production of poultry in the United States is subject to many factors which place domestic producers at a disadvantage with foreign producers. Most grains and other feed items going into domestic poultry and egg production are afforded price protection by some form of price support. This results in higher feed costs for American producers. On the other hand, the Government of the United States to a greater or lesser extent subsidizes grain for export, and to the extent that this lowers feed costs, foreign producers are given an advantage. Moreover, poultry production in the United States is subjected to rigid inspection requirements, which, while giving consumers added assurances of the wholesomeness of the product, nevertheless increase production costs. The high wage levels and employee benefits which are attendant with American production, and the high taxes which exist in the United States, also increase production costs. These facts all indicate that foreign producers need have no substantial fear of United States production. Notwithstanding the fact that United States poultry is competitive only at certain times during low-price cycles in the United States provided quality is taken into consideration, a substantial foreign market potential for American poultry nevertheless exists because of the great possibilities for an expansion in the consumption of poultry products. This will provide an enlarged market for all poultry products regardless of where produced. There is good reason to believe that export demand may be stimulated through adequate promotion and market development programs. In the last year or so Western Germany and Switzerland have commenced purchasing United States poultry products in commercial quantities for the first time in history. The product currently being exported from the United States is not displacing other production-it is the result of increased consumption and represents entirely new marketings. providing foreign consumers with the high-quality meat-type ready-to-cook new product which has been developed in the United States and is not generally produced elsewhere, increased consumer acceptibility and expanded foreign markets are being created. Per capita poultry consumption in all other countries of the world, with the exception of Canada, is extremely low when compared with United States consumption. For example, the country which is currently the largest exporter of poultry in the world has a per capita consumption of only a little over 2 pounds as compared to a United States consumption of 31 pounds.

By

Increased markets for poultry not only serve to supply the growing needs and demands for foreign consumers for additional protein products, but also furnish outlets for substantial quantities of surplus feedstuffs.

Despite the low per capita consumption generally in the other countries of the world and the high level of cost attendant with United States production, almost all foreign countries maintain trade barriers in some form which restrict market opportunities for United States poultry. The attached table illustrates the extent and nature of these barriers.