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ing party in Italy and also to Italian governmental officials. As a consequence, exportations of these chemicals to Italy have ceased.

Another example of a restrictive device is the practice followed in the United Kingdom of not granting import licenses for organic chemicals in instances where a similar product is produced in that nation; in other instances, the United Kingdom permits only token importations to supplement its own domestic productions.

Since the conclusion of World War II, foreign countries, particularly France and West Germany, have increased rather than decreased their tariff rates insofar as certain organic chemicals are concerned.

The Committee on Ways and Means of the House of Representatives, in reporting out H. R. 12591, proposed an amendment to existing law requiring the President to submit a report to the Congress of “the results of action taken to obtain removal of foreign trade restrictions (including discriminatory restrictions against United States exports, remaining restrictions, and the measures available to seek their removal in accordance with the objectives of this section."

It is significant that the Ways and Means Committee found it necessary to direct the President to seek the removal of discriminatory restrictions against American exports. If the administration of the act over the past 23 years had resulted in the elimination of restrictions it would not have been necessary for the House of Representatives to incorporate this provision in H. R. 12591.

The association is aware of balance-of-payment difficulties of many foreign nations and of obstacles which must be overcome to achieve a substantial con. vertibility of currencies. Efforts of the United States to ameliorate these conditions have been attempted outside the administration of the trade-agreements program. Pertinent in this connection is the Ninth Report of the United States Tariff Commission, Operation of the Trade Agreements Program, July 1955 to June 156 (p. 231 et seq.).

"Of the 43 countries with which the United States had trade agreements in force during all or part of the period from July 1, 1955, to June 30, 1956, 27 restrict imports for balance-of-payments reasons and discriminate between sources of supply. There are 23 general-agreement countries in this group, as well as 4 countries with which the United States has trade agreements on a bilateral basis.

“Although the general agreement lays down the rules for the relaxation and final elimination of quantitative trade restrictions, it is not intended to be an instrument for the solution of the basic problems that make such restriotions necessary. It therefore remains for other agencies to bring about such improvements in the internal economic and financial conditions of countries as will assist them to overcome their external economio and financial difficulties. The reduction of tariffs under the general agreement, although a type of cooperative effort among countries for a particular purpose, does not in itself lead to cooperation in the use of financial aid from the United States or in the solution of such problems as the increasing of production and productive efficiency, improving the balanceof-payments position by increasing exports, combating inflation, and attaining a balanced external financial position that will permit currency convertibility. Solution of these problems has been the special responsibility of agencies that have no direct or necessary connection with the General Agreements on Tariffs and Trade, yet have worked toward the same general objectives as those sought by the general agreement. * * *

"Most of the countries with which the United States has trade agreements made additional progress during 1955-56 in overcoming their external financial difficulties. They continued to match this improvement by further relaxing quantitative trade controls and exchange restrictions originally imposed for balanceof-payments reasons. * * *

"General tariff revisions by a few countries during 195556 and numerous upward adjustments in individual rates of duty by almost all countries reflected the general tendency-noted in the Tariff Commission's last two reports--for countries to increase the protective incidence of their tariff's as they progressively eliminate the more direct forms of trade control, such as quotas and import licensing." [Emphasis added.]

This memorandum is not intended to be comprehensive or all-inclusive support of the association's position that the administration of the trade-agreements program has not been truly reciprocal. The few instances cited are, however, in

accord with other similar data and additional examples of discrimination against the exportation of domestically produced synthetic organic chemicals can be made available. We believe, however, that further specifications are unnecessary, particularly in view of the limited time allowed us to file this memorandum for inclusion in the printed hearings.

Senator DOUGLAS. Did I understand the chairman requested the State Department to prepare such a memorandum?

Senator FREAR. Yes; the chairman of the committee will.
Senator DOUGLAS. I thank the chairman.
(The memorandum requested is as follows:)

TABLE I.-Changes in tariff levels and in United States exports to countries with

which trade agreements are now in effect

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Argentina a
Australia..
Austria.
Benelux and dependencies....
Brazil.
Burma...
Canada...
Ceylon.
Chile...
Cuba...
Denmark..
Dominican Republic...
El Salvador ..
Finland..
France and dependencies...
Germany..
Ghana.
Greece.
Haiti...
Honduras ...
Iceland.
India (and Pakistan in 1937)
Pakistan...
Indonesia
Iran .
Italy.
Japan...
Malaya...
New Zealand
Nicaragua...
Norway...
Paraguay ...
Peru...
Rhodesia and Nyasaland..
Sweden.
Switzerland ...

-----
Turkey
Union of South Africa
United Kingdom and depend-

encies...
Uruguay...
Venezuela 3...
United States...

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1 Ratio of customs receipts to value of imports. Customs receipts do not include revenue taxes levied at substantially similar rates on equivalent domestic production,

Preliminary. 3 Bilateral agreement. • Not available. · 1956. . 1953 7 1938-39. $ 1954. . 1955. 10 1941.

TABLE II.--Examples of United States exports of products subject to trade agreement

concessions

The following statement presents specific examples of commodities on which the United States has obtained tariff concessions from foreign countries under the trade Agreements program and in which United States exports to those countries have increased.

[In thousands of dollars)

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Argentina:

Trucks and chassis....
Oflice machinery......
Unexposed movie film....
Compressors (air or refrigeration)..

Due to dwindling foreign exchange reserves during 1956 and 1957, Argentina took steps to divert imports of many items away from dollar sources of origin. Continuation of this policy in 1958 is foreseen in view

of the adverse balance of payments situation with the United States. Australia:

Tobacoo...
Cotton.....
Sawmill products....

Australian restrictions on imports from the dollar area are applied on an administrative licensing basis, and have remained substantially

unchanged since 1947. Austria: 1

Lemons... -----------
V
Metalworking machines..
o

---------------------------------------
.
Calculating machines...-.
Bookkeeping machines.....

40 percent of Austrian dollar imports have been liberalized. Benelux: 1

Oranges...
Prunes.
Carbon black.....
Typewriters and parts..
Civilian airplanes.......

87 percent of Benelux dollar imports have been liberalized. In

practice licenses for nonliberalized commodities are issued freely. Brazil: In accordance with a waiver granted by the contracting parties to

the General Agreement on Tariffs and Trade, all tariff concessions made by Brazil to the other contracting parties were suspended as of Aug. 14, 1957, with the enactment of the new Brazilian tariff law, pending renegotiation of concessions. Quantitative restrictions are not used by Brazil to control imports. Availability of foreign exchange for imports is, however, controlled within the foreign exchange budget which is based on expected foreign exchange earnings. Weekly allocations of exchange are divided into 2 categories, 1 amount for specified essential imports such as petroleum, newsprint, etc., and another amount for nonpreferen

tial imports. Burma:

Condensed milk....
Tractors and parts.....
Chemical specialties....

Although Burma has found it necessary to restrict dollar licensing for private trade to only a few commercial Items, there have been substantial imports on Government account of commodities for which

Burma has given GATT trade concessions,
Canada:

Electrical machinery and apparatus......
Iron and steel mill products..
Industrial machinery .........
Cotton manufactures.....
Chemicals and related products...

There are no restrictions on imports into Canada except for a few special cases such as certain agricultural products, butter substitutes,

secondhand aircraft, etc. Ceylon:

Tractors and parts.
Tobacco.

- ----- - ------------------------------------------
Bynthetic broad woven fabrics..
Malted milk.-.-.
Industrial lubricating oils...-

In 1956 Ceylon considerably relaxed its import restrictions to permit increased imports from the United States. Many of the more essential items, such as agricultural machinery, drugs, typewriters, electrical

machinery, etc., may be freely imported. See footnotes at end of table.

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TABLE II.--Examples of United States exports of products subject to trade agreement

concessions Continued

(In thousands of dollars)

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Chile:

Typewriters..
Other office appliances.
Textile machinery---
Tractors..--..
Construction, excavating, mining, and related machinery..

Due to balance-of-payments difficulties, Ohile has resorted in recent

years to increased import surcharges to reduce imports. Cuba:

Automobiles, trucks, buses, trailers, and parts.----- --
Lube oils...
Rice...--
Wheat flour.
Petroleum...

Cuba does not maintain a general control over its import trade. Import permits are required on about 8 commodities. However, this imposition of license requirements was for administrative reasons and has had a negligible effect on Cuba's total imports from the

United States.
Denmark: 1

Canned fruit..
Business machines.
Refrigerators....

66 percent of Danish dollar imports have been liberalized. Dominican Republic:

Oatmeal, groats and ro
Wheat flour...--
Fresh fruit..--
Canned peaches and pears.-------
Tires and tubes..

The Dominican Republic does not have exchange control and requires import licenses excepting on wheat and wheat flour, rice, fertilizers, radio transmission apparatus, and firearms. These controls

are not designed to restrict imports. El Salvador:

Tires and tubes.---
Canned asparagus, peas, corn, and tomatoes..-----
Canned pork..
Phonograph records.

El Salvador has almost no quantitative restrictions on imports.
Finland: 1

Industrial trucks and truck trailers...
Motion pictures. ---
Calculating machines and cash registers.---

Finnish imports from the United States are subject to license.
However, automatic licensing is accorded to a substantial number of

goods (46 percent of all dollar items by unofficial Finnish estimates). France:

Machine tools.
Carbon black..--

All imports into France are subject to license. Balance of payments difficulties and internal considerations such as the effect on price levels

are reflected in the administrative case-to-case decisions. Germany:

Fruit and vegetable juices.
Airplanes and parts.
Trucks and passenger cars.
Plastic condensation products...
Cranes and fork-stacking machines..
Tires and tubes. -----

94 percent of German dollar imports have been liberalized.
Ghana: Ghana was too recently formed as an autonomous state to

demonstrate trade developments over a period of years. Imports into Ghana from the dollar area require an import license which must be justified by nonavailability in the sterling area and essentiality to the

economy. Greece: 1

Cheese...
Powdered milk..
Mineral oil and greases..
Office machines.
Patent medicines..
Tires. ----

More than 95 percent of Greece's trade has been freed from restrictions. Only a few luxury items and certain machines remain subject

to import licensing. Seo lootnotes at end of table. 27629—58-pt.

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Table II.-Examples of United States exports of products subject to trade agreement

concessions - Continued

(In thousands of dollars)

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Haiti:

Tires and tubes... Surgical dressings.. Passenger cars....

The low level of trade in 1957 was due to bad weather and serious political instability. There is no system of exchange controls in Haiti, and goods are not subject to import quotas. Import licenses are re

quired only for a few items such as tobacco, firearms and ammunition. Honduras:

Passenger cars, trucks and buses..---
Wheat flour..-..
Canned fruit...
Canned tomatoes, corn, peas, and asparagus.....
Canned meat.
Cotton shirts...
Cotton and jute bags.......

Honduras has no restrictions on imports.
Iceland: 1

Lubricating oil...
Typewriters...
Oat grits...
Soybean oil..

Foreign exchange licenses are required for all imports and are pres

ently granted sparingly due to low export earnings. India and Pakistan:

Nonfat dry milk solids---
Tobacco.---
Industrial lubricating oils.---.
Air conditioning and refrigerating machinery..
Tractors and parts...

All imports into India are subject to quota limitations. In general, while India's policy has become more restrictive, discrimination against dollar goods in favor of soft-currency imports is being reduced.

All private imports into Pakistan are subject to license. At present

licenses are granted very sparingly. Indonesia: 1

Tobacco.
Tires and tubes
Internal combustion engines....
Motor buses and trucks.
Wheat flour.----

No quantitative restrictions as such are maintained by Indonesia.
However, all private imports are subject to prior licensing and at

present licenses are severely curtailed. Iran:

Lube oils and greases..-
Tires and tubes.
Automobiles, buses, chassis, and parts..
Pumps....
Refrigeration and air-conditioning equipment.-----
Tractors....

For the last several years United States exports to Iran have been virtually unrestricted. An absolute prohibition which Iran main

tains on a few items does not aflect American trade. Italy: 1

Dried prunes...
Lube oils... -
Millstones, grindstones, etc.----
Certain pumps and compressors.
Air conditioning equipment.-----
Punchcard machines..---

Italian dollar liberalization now amounts to about 71 percent in terms of imports from the United States in 1953. The license-free items account for about 80 percent of the value of our current exports

to Italy. Japan:

Card-punching machines.....
Raw cotton --
Cash registers...
Grinding machines
Antiknock compounds. .--

All imports into Japan are subject to license. A complicated system of administration of the import controls makes it difficult to determine whether progress is being made toward liberalization. It seems probable that steps in this direction in 1955 and early 1956 were checked by the severe balance-of-payments deficit which developed

In late 1956 and 1957.
Bee footnotes at end of tablo.

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