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istrators of the Trade Agreements Act apparently intend to particularize in forthcoming negotiations. They appear not to want the Tariff Commission to file any advance warning of the results of their proposed actions.

Thus we enter the second phase of the trade-agreements program. During the first phase we were given assurances that no important, efficient American producers would be injured. The extent of duty reductions was then 50 percent of the rates in effect in 1934. In 1945 the base rates were changed to those in effect on January 1 of that year, and thus subsequent reductions were allowed to be compounded on earlier ones to a maximum of 75 percent of the 1934 rates.

As we approach this maximum the chances of potential injury naturally increase, and so we are no longer told that no one will be injured. The little safety signals that were written into the 1948 Extension Act are now to be uprooted and you are asked to deliver to the State Department a mandate to injure, if injury furthers its economic plans. A mandate, you may say, only to the extent of 50 percent of the 1945 rates. We are not even to be granted that consolation for very long. H. R. 1211 would extend the Trade Agreements Act to June 12, 1951, 2 years from now. Dr. John Lee Coulter, who earlier today testified here, testifying before the House Ways and Means Committee, declared that the reason for the short extension apparently was to permit a new base rate to be written into the act in 1951. His recognition of this motive was confirmed in a New York Times article of January 27, 1949, by John D. Morris, which said:

* it was learned from administration sources that it was a principal consideration in the decision to seek a renewal only until 1951.

In a later article, also by Mr. Morris, on February 10, 1949, the New York Times said, in part:

The bill, H. R. 1211, limits tariff reductions to a range of 50 percent of 1945 levels, but this may be relaxed when the law comes up for extension in 1951.

Thus we have the prospect of reductions of duties down to 122 percent of 1934 rates, and that becomes virtually indistinguishable from free trade. As we head toward the vanishing point in our tariff structure, the chances of injury grow ever more certain. Now, if ever, would seem to be the time for the Congress to insist that the executive branch give heed to "peril point" warnings. If Congress does not so insist we can only conclude that it is no longer concerned whether the delegation of its constitutional tariff-setting responsibilities results in injury to domestic producers, in unemployment of workers, and in loss of capital investment.

When we read that such injury is a calculated risk that must be ventured in the interest of the larger purposes of the Trade Agreements Act, we believe it reasonable to examine those purposes and to ask how near they have been approached in the 16-year history of the act.

One of the principal purposes claimed for the trade agreements program is that it reduces barriers to trade on a reciprocal basis. The United States is pictured as trading away its tariffs to induce other countries to lower their tariffs and restrictions of trade. At the Ways and Means Committee hearings I pointed out that while we have drastically reduced our tariffs, other nations have built up a formidable array of restrictions and controls. I was asked by the committee to

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furnish as many examples as possible of such restrictions for their record. This proved to be such a considerable task that the list could not be finished before their hearings were completed and the record went to press. Therefore, I offer here, and respectfully request that it be included as part of my present testimony, our compilation entitled "International Trade Restrictions and Controls Put Into Operation by Various Listed Foreign Nations."

Senator MILLIKIN. It will be entered into the record. (The compilation referred to is as follows:)

INTERNATIONAL TRADE RESTRICTIONS AND CONTROLS PUT INTO OPERATION BY VARIOUS LISTED FOREIGN NATIONS

(Compiled from reports coming to the attention of the American Tariff League in the 6-month period prior to date, with background information supplied in some instances)

The various measures hereafter listed are considered to be restrictive in the sense that they tend to diminish or retard the movement of trade to and from the countries involved. In our opinion, it is not possible to apply the word "restrictive" in any absolute sense. One form of trade control may be more "restrictive" than another. The so-called restrictions may not, in the widest sense, be actually hampering to total world trade. In the absence of many controls, maladjustments might become so acute as to result in a more restricted world trade than exists in their presence.

Most so-called restrictions are instituted, not from ill-will on the part of the countries imposing them, but because of the necessity of achieving a balance of payments as between exports and imports, or of conserving certain currencies, or of fostering or safeguarding elements in domestic economies.

For these reasons, the list is not offered in criticism of the actions of the countries involved. Rather, it is offered to show that trade controls are today so prevalent as to constitute the rule rather than the exception, and that any foreign trade policy in the United States which attempts to force other countries to relinquish their controls is therefore more idealistic than realistic.

Also appended is a list of bilateral agreements between sets of foreign nations, which have come to our notice in the 6-month period prior to date. While these agreements, in our opinion, foster rather than restrict trade, it is the current policy of the United States Government to consider them as "restrictive" in the sense of being discriminatory, because they run counter to the multilateral approach to trade currently favored by the United States State Department. Most of these agreements provide for trade in stipulated commodities. Some are barter agreements.

It is to be understood that neither list is offered as complete for the period studied either as to the number of countries employing restrictions and bilateral agreements, or as to the numbers and kinds of measures adopted in the countries herein discussed. In the list of restrictions, measures adopted by the United States and the occupied areas of Germany and Japan are omitted.

In the lists, sources are identified either by the full name of the publication or by one of the following explained code symbols:

FCW-Foreign Commerce Weekly, published by the Office of International Trade, United States Department of Commerce.

SD-Release of the United States Department of State, in each instance numbered and dated.

NCB-Monthly letters on economic conditions and Government finance, issued by the National City Bank of New York.

AIEB-American Import and Export Bulletin, published monthly in New York, N. Y.

THE BRITISH COMMONWEALTH OF NATIONS

Continuance of the preference system, whereby the territories listed immediately hereafter accord one another lower rates of duty on various commodities than are accorded other territories, is specifically reserved under article I (2) of the General Agreement on Tariffs and Trade (GATT): "United Kingdom of Great Britain and Northern Ireland; dependent territories of the United Kingdom of

Great Britain and Northern Ireland; Canada; Commonwealth of Australia; dependent territories of the Commonwealth of Australia; New Zealand; dependent territories of New Zealand; Union of South Africa, including South West Africa; Ireland; India (as on April 10, 1947); Newfoundland; Southern Rhodesia; Burma; Ceylon.

Individual territory controls

United Kingdom.-British controls on trade appear to stem from the wartime import of goods (control) order of 1940, and amendments thereto, under which no goods can be imported into the United Kingdom except by authority of a license granted by the Board of Trade (FCW, September 4, 1948, p. 29).

Following the war United Kingdom possessed a limited amount of United States dollars and continued to restrict imports from the United States as well as to limit the convertibility of sterling into dollars, in order to conserve her dollar funds. The Anglo-American financial agreement of July 15, 1946, whereby dollar credits of 3.75 billion dollars were established for Britain, placed her under obligation to restore the free convertibility into dollars and other currencies of all sterling exchange arising from current transactions after July 15, 1947. Withdrawals under the Anglo-American credit were made at a more rapid rate than anticipated, 1.65 billion dollars having been withdrawn through June 30, 1947. As soon as free convertibility was permitted beginning July 15, 1947, withdrawals increased alarmingly and Britain was forced on August 20, 1947 to limit sterling convertibility and to tighten restrictions on imports (NCB, September 19, 1947, p. 99 et seq.).

Britain was not expected, under the Anglo-American agreement, to abolish her British exchange control, whereby she regulates the movement of capital in and out of the country, nor did it prohibit her from continuing to control imports and exports, although she was expected not to discriminate among sources of imports (NCB, July, 1947, p. 83). However, her preference system, as above described, is discriminatory and the state trading practices she has established for some commodities tend to discriminate as to sources.

Thus the United Kingdom may be said to maintain a strict export and importlicensing and control system, combined with exchange control, as well as quotas and embargoes on a wide number of import and export commodities, subject to changes from time to time, but under direct state supervision, and integrated with internal production, rationing and distribution controls.

Canada.-On the day (November 17, 1947) announcement was made of the provisions of GATT, the United States Department of State issued the text of two memoranda on the part of Canada and the United States, whereby Canada announced she was forced "to curtail imports immediately" to conserve United States dollars (SD No. 912, November 17, 1947). An extensive list of imports from the United States was placed under embargo or quantitative restrictions, effective November 18, 1947. Canadian Import Restrictions, published by the Office of International Trade, United States Department of Commerce, November 19, 1947.

The State Department declared that Canadian action was permissible under article XII of GATT, as an imposition of quantitative restrictions to safeguard a country's external financial position and balance of international payments (SD No. 912, November 17, 1947).

The Canadian import control system has continued, with some changes and some relaxations. While Canadian exports to the United States increased in early 1948 over a similar period in 1947, United States exports to Canada declined, "under the restraining influence of the exchange controls" (FCW, July 31, 1948, p. 16).

Australia. The current basis for Australian import restrictions on imports from the United States is the setting of quotas on imports from dollar currency areas for the fiscal year 1948-49, made July 1, 1948, with a continuation of an import licensing policy (FCW, July 17, 1948, p. 15).

The quota for 1948-49 is described as an "irreducible minimum." Import licenses are being issued only for one quarter ahead. Foreign investment in Australian enterprises is discouraged unless it represents a minority interest, with the majority interest held in Australia (FCW, September 11, 1948, p. 10). New Zealand.-Import licensing schedules for 1949 are in operation. Licenses for imports from dollar currency areas are granted only for absolutely essential commodities not procurable from sterling sources. Stricter controls are contemplated (FCW, December 13, 1948, p. 28).

Union of South Africa.-On November 4, 1948, the Union reimposed a comprehensive system of import controls, declared necessary because of a steady drain on her gold reserves. Imports of certain listed "nonessential" goods are prohibited, regardless of country of origin. As to other goods, foreign exchange will be rationed for imports from nonsterling countries (FCW, November 22, 1948, p. 48; December 6, 1948, p. 28). The Union has notified GATT of the need to impose special import curbs (New York Times, December 22, 1948).

India. Increased import duties on a number of commodities and extension of the import licensing system were announced at the beginning of 1949 (FCW, January 10, 1949, p. 19; December 13, 1948, p. 25). Licensing treatment of commodities differs with regard to the various currency areas. Few items from the United States are licensed liberally. Comparatively liberal treatment is accorded imports from sterling and soft-currency areas (FCW, September 4, 1948, p. 21). Three categories established: (1) licensed liberally; (2) licensed subject to monetary ceiling; (3) not licensed at all. Hard-currency allocations are in operation in agreement with the United Kingdom (FCW, August 21, 1948, p. 22).

Pakistan.-Pakistan appears also to be operating under hard-currency allocations in agreement with United Kingdom. Import licensing, export quotas, and export taxes are noted as controls in effect (FCW, January 24, 1949; January 3, 1939; December 20, 1948). Much the same system of import-license determination appears to govern as in India (FCW, July 17, 1948, p. 21). The partition of India took place during the GATT negotiations, at which India acted on Pakistan's behalf. Afterward Pakistan became convinced that the concessions granted on her behalf were not in balance with those received, and she has requested renegotiation on six items (SD No. 825, October 11, 1948).

Southern Rhodesia.-Strict licensing and exchange requirements were originally imposed in September 1947 on imports from the United States and subsequently were extended to include virtually all hard-currency areas. Import duties have been increased on various consumer goods (FCW, November 8, 1947; May 22, 1948; August 28, 1948; September 18, 1948).

Ceylon. What are described as “more stringent exchange-control regulations and extension of such controls to all sterling areas as well as to the dollar área" were imposed June 1, 1948. At the same time an agreement with United Kingdom became effective under which arrangements were made to conserve earnings of foreign exchange and to control expenditures of money on foreign transactions so that the value of Ceylon imports will not exceed the value of its exports (FCW, July 17, 1948, p. 16). Ceylon signed the protocol of provisional application of GATT on June 29, 1948, but qualified its signature by indicating that because of special difficulties facing the country it could not give effect to many of the tariff concessions it granted. The GATT contracting parties at their second session considered that such a reservation came within the nullification or impairment provision-article XXIII of GATT-and Ceylon agreed to renegotiatethe concessions (SD No. 825, October 11, 1948).

Anglo-Egyptian Sudan.-Export royalties on certain commodities imposed as of January 15, 1949 (FCW, December 13, 1948, p. 11).

British colonies

The increasing dollar difficulties of United Kingdom have been reflected in the various British colonies by a general tightening of colonial import control regulations, which are designed to restrict to the greatest possible extent imports from all sources, including United Kingdom. Colonial governments have also been encouraged to increase the production in colonies of dollar-saving or dollar-earning commodities (FCW, Feb. 7, 1948, p. 11).

In addition to the above general situation, the following particular actions have been noted:

British Guiana.-The period of validity of import licenses was cut from 1 year to 7 months (FCW, Sept. 15, 1948, p. 19). New quotas for importation of certain products from hard-currency sources were set (FCW, Jan. 10, 1949, p. 11). British West Indies.-Increasingly stringent measures to limit imports from hard-currency areas were noted (FCW, Oct. 23, 1948, p. 16).

Hong Kong.-The Government requires the surrender of foreign-exchange proceeds, at official rates, arising from exports to the United States, with certain: exceptions (FCW, Oct. 2, 1948, p. 26).

FRANCE AND FRENCH EMPIRE TERRITORIES

The preferences which the territories within the French Empire, listed hereafter, accord one another, are reserved under article I (2) of GATT: France; French Equatorial Africa (Treaty Basin of the Congo and other territories); French West Africa; Cameroons under French mandate; French Somali coast and dependendencies; French establishments in India; French establishments in Oceania; French establishments in the condominium of the New Hebrides; Guadeloupe and Dependencies; French Guiana; Indochina; Madagascar and dependencies; Morocco (French zone); Martinique; New Caldonia and dependencies; Reunion; Saint-Pierre and Miquelon; Togo under French mandate; Tunisia.

Individual territory controls

France. The French franc was devalued on January 25, 1948, in order to increase French exports and as part of a comprehensive program to stabilize the French economy. The French Government decided upon a "multiple currency system" (NCB, Feb. 1948, pp. 18-21).

Official rates were to be used for (1) payments to French exporters for half of the export proceeds, which the exporters are required to sell to the exchange control; and (2) payments by French importers for goods designated by the French authorities as "essential." All other transactions in the United States dollars and Portuguese escudos, and later in other currencies, were to be carried out at rates determined in a free market.

France, on October 17, 1948, revised the rates of exchange between the French franc and soft currencies not traded on the so-called free market, which action, in effect, further devalued the franc by about 22 percent, as to those currencies. The devaluation was expected to increase the franc cost of much foreign merchandise, and thus tend to raise the French internal price level (FCW Oct. 30, 1948, p. 17).

All French imports payable in currencies negotiated on the free market must be paid for with exchange purchased half from the exchange stabilization fund at rates used by it and half on the free market, effective October 18, 1948 (FCW, Nov. 22, 1948).

Import licenses carry with them the right to foreign exchange. All merchandise requires an import license (FCW, July 17, 1948, p. 19).

On December 2, 1948, a new list of products for which import licenses may be obtained in France under the "import-without-exchange" system, replaces the one issued February 13, 1948 (FCW, January 17, 1949, p. 19).

Import duties which had been suspended since July 8, 1944, were restored on a limited list of products by orders of December 26, 1947; April 22, 1948; and October 16, 1948 (FCW, December 20, 1948, p. 17).

The order of October 16, 1948, restoring import duties was made applicable to imports entering Guadeloupe, Martinique, and French Guiana (FCW, January 3, 1949, p. 20).

Tunisia. On August 1, 1948, a transaction tax on imports, exports, certain internal services, sales, and local production was established (FCW, December 13, 1948, p. 21).

* *

French West Africa.-Morocco established on January 1, 1949, a new regulation limiting import licenses to 10 commodity groups. It was "expected to reduce American exports to French Morocco substantially *" (N. Y. Journal of Commerce, January 11, 1949). Madagascar.—All goods exported from Madagascar and Comoro Islands, except those to France and French territories, are subject to export licenses and to the turning over to the exchange office of the foreign currency realized from the sale of the goods (FCW, November 15, 1948, p. 23). The exportation of fodder from Madagascar was prohibited on October 11, 1947 (FCW, January 24, 1949, p. 21).

Effective September 4, 1948, the export tax on vanilla beans was increased from 21 to 40 percent ad valorem. New minimum prices were established for Bourbon vanilla exported to any destination except France (FCW, October 23, 1948, p. 29).

On July 1, 1948, a new procedure for allocating import licenses was established. Two committees were formed: (1) To control imports from foreign countries which necessitate the granting of an import license and an outlay of foreign exchange; and (2) to have jurisdiction over import licenses for goods furnished under quota by France and territories of the French Union. Foreign

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