The protocol deals with the interchange of merchandise between the two countries and contains two lists of products specified quantities of which will be exported by each country to the other over a 2-year period. Brazil-Chile Signed: December 27, 1946. Effective: December 27, 1946. Duration: 6 years. If not denounced 3 months prior to expiration date, agreement will remain in effect for an unlimited time, each party reserving right to denounce at any time thereafter for its termination 1 year later. Nature and commodities involved.-Brazil to sell and Chile to buy 20,000,000 lineal meters cotton textiles annually, providing equality of prices between Brazilian textiles and those of similar quality offered by other sources. Better offers received by Chilean importers must be communicated to Brazil, which within 5 days must reply as to whether Brazilian exporters can compete. If cannot compete or no reply received, Chile can effect purchases in other market. Preferential treatment in customs, exchange or other matter existing in Chile now or in future to be extended Brazilian textiles so that they will not be less favored than similar textiles from other countries. Brazil-Paraguay Signed: January 16, 1947. Effective: January 16, 1947. Duration: 6 years. If not denounced 3 months prior to expiration, will remain in effect for indefinite period, each reserving right to denounce for termination 1 year later. Nature and commodities involved.-Brazil to sell, Paraguay to buy 10,000,000 meters cotton textiles annually so long as Brazilian prices not higher than those of other countries. If Paraguayan importers receive better offers, said offers must be communicated to Brazil which will advise as to whether Brazilian exporters can compete. Chile-Belgium Signed: March 26, 1946. Nature and commodities involved.-Memorandum of agreement recommending projects of a provisional commercial convention, a commercial agreement, and a protocol covering payments. Proposed commercial convention provides for reciprocal general most-favored-nations customs treatment. Commercial agreements provides for granting of all necessary facilities for increasing trade and especially intensifying commerce in certain products. Lists of Chilean and Belgian Luxemburg products were to be drawn up by a mixed commission within 90 days after the signing of the agreement. The draft protocol provides that payments relating to the interchange of merchandise between the two countries shall be made in United States currency or in any other currency expressly agreed upon. Honduras-Nicaragua Effective: July 8, 1946. Duration: Further notice. Nature and commodities involved.-Nicaragua grants duty-free entry for rosin and turpentine; Honduras grants duty-free entry to sesame oil and cottonseed oil. Uruguay-Belgium-Luxemburg Signed: June 14, 1946. Effective: June 14, 1946, provisionally, subject to ratification. Uruguay ratified October 23, 1946. Duration: 3 years. Nature and commodities involved.-This commercial agreement prompted by the desire of the respective Governments to resume and increase the exchange of their goods with each other, provides that import and export permits and authorizations for the corresponding exchange will be issued with the greatest facility possible for certain listed products up to a specified value or quantity. Another provision of the agreement states that in case either country establishes import or export quotas for individual countries on certain products, each is bound to give the other an equitable part of the quota. This share of the quota cannot be less than the prewar part of the trade each received in the particular commodities. Any portion of a quota established for a limited period and not filled before the period expires will be added to the quota for the following period, except when it is decided to the contrary by mutual agreement. Quotas given to a third country must include sales made by private agreement whether in the form of barter or other agreement. Both Governments agree to cancel all provision of previous agreements dealing with the balancing of trade between Uruguay and Belgium. Chile-Peru Signed: February 6, 1947. Effective: Not yet ratified. Nature and commodities involved.-Agreement on cultural, tourist, and commercial relations based on unratified agreement of April 4, 1946. Commercial provisions reportedly include reciprocal tariff concessions. Colombia-Canada Signed: February 20, 1946. Effective: 30 days after exchange of ratifications. Duration: 2 years with automatic renewal for 1 year unless terminated. Nature and commodities involved.-Reciprocal trade agreement providing most-favored-nation treatment; nondiscriminatory procedures to govern customs regulations, control foreign exchange, quantitative quotas, etc. (Excepts Empire agreements.) Colombia-Sweden Signed: November 6, 1948. Effective: November 1, 1948. Duration: December 31, 1949. Nature and commodities involved.—Trade and payments agreement covering exchange of Colombian coffee and bananas (3,920,000 pesos value) for "essential" requirements of Columbia. Mexico-Canada Signed: February 8, 1946. Effective: February 8, 1946 (provisionally). Duration: 2 years. Nature and commodities involved.-Provides for most-favored-nation treatment, no specified products involved. Mexico-Costa Rica Signed: February 4, 1946. Nature and commodities involved.-Provides for most-favored-nation treatment, no specified products involved. Mexico-Guatemala Signed: October 12, 1948. Duration: 2 years. Nature and commodities involved.-Most-favored-nation treatment, no specified products involved. Nicaragua-Honduras Effective: July 8, 1946. Nature and commodities involved.-Exempts from Nicaraguan customs duties imports of Honduran rosin and turpentine; Honduras exempted Nicaraguan sesame and cottonseed oils from duties. E. BILATERAL. AGREEMENTS IN THE FAR, MIDDLE, AND NEAR EAST Bilateral trade agreements in the Far East Few trade agreements of the type in question are known to exist in the Far East, with the exception of the network of trade and payments agreements concluded by SCAP with other countries. Japanese trade agreements.-During 1948 the Supreme Commander for the Allied Powers concluded on behalf of Japan a series of trade agreements, most of them to be effective through June or December of 1949. Targets of the expected volume of trade, both as to value and as to types and quantities of commodities to be exchanged are estimated in these agreements. In general, an effort is made to balance the amount of trade between Japan and the signatory nations, although provisions for periodic settling of balances in acceptable currencies are written in. The most important of these is known as the Sterling Agreement, signed in November with the British, to which several members of the Commonwealth adhered (United Kingdom and colonies (except Hong Kong), Australia, New Zealand, India, South Africa. All members of the sterling area are eligible to join.) In addition, agreements were signed with Sweden, the French Union, Egypt, the Netherlands and Indonesia, and Siam. Under the terms of the larger Sterling Agreement, Pakistan and Burma have signed separate agreements. There remains an "open account" understanding with China, under which China is expected to make up certain amounts of goods still undelivered to Japan in return for Japanese goods that went forward to China nearly 2 years ago. Within the framework of all of these agreements, provision has been made for the passage of goods under private trade auspices as well as under government. In addition to its "open account" arrangement with SCAP described above, the Chinese Government is understood to be still shipping Chinese commodities to the Union of Soviet Socialist Republics in fulfillment of commitments undertaken in barter agreements entered into with the Soviet Government in 1938-39. The terms of these agreements are confidential. A supplementary financial agreement between China and Canada was signed on May 28, 1947, supplementing a previous signed agreement under which Canada extended credits to China. Bilateral agreements in the Middle and Near East Because of the continuing dollar shortage facing the countries of the Near and Middle East and their difficulty in finding markets for their exportable surpluses, they have had to resort to the use of bilateral agreements. Turkey, Egypt, and Israel, the most important trading countries, have negotiated a number of such agreements during the past year; the other countries in the area have been less active. The principal hindrance to American trade with most of the countries of the area, is the lack of dollar earning power and difficulty in converting their local currency and other foreign exchange into dollars. Turkey, since the conclusion of World War II, has been the most active of the Near Eastern countries in concluding bilateral agreements. In the early part of this period the agreements providing for trade on a free foreign exchange basis followed the country's policy of renouncing bilateral trade in favor of more liberal commercial transactions. With the growing dollar problem, intensified by the postponement of sterling convertibility and difficulty in finding markets for its goods, Turkey felt obliged to modify this liberal policy and to conclude agreements providing for clearing accounts and in some cases for mutual credits and lists of goods constituting the trade exchange goal. The most recent agreements concluded by Turkey provide for ERP drawing rights as incorporated in the Intra-European Payments and Compensation Agreement. It is believed that Turkey's objective is still the development on multilateral trading as soon as world conditions make it possible. Egypt has also negotiated several bilateral agreements, clearing as well as barter, and is considering others, particularly in order to ensure markets for cotton which has traditionally provided more than 70 percent of the country's revenue from exports. Barter agreements and imports against deferred payment have been important factors in the foreign trade of the new state of Israel. Agreements of this kind have been concluded recently with Holland, Sweden, Hungary, Czechoslovakia, Yugoslavia, and Poland. In general, they provide for the supply by Israel of citrus fruits and other products against delivery of essential commodities such as foodstuffs, chemicals, and industrial equipment. In several of the agreements provision is made for the employment of Jewish blocked funds in the countries concerned for the importation of goods into Israel. Since the war, Egypt and Iraq have concluded yearly financial agreements with the United Kingdom which limit the amount of hard currency, primarily dollars, which can be purchased with sterling. These agreements have made it possible for these countries to spend more dollars than they were currently earning but have the effect of requiring them to spend hard currency for goods not available in easy currency areas. A somewhat similar situation existed until recently in Syria and Lebanon where dollars in excess of the amounts earned were made available by France. This is no longer the case under a new monetary agreement between Lebanon and France which established an independent Lebanese currency outside of the franc block. A somewhat similar agreement has been negotiated between Syria and France but has not yet been ratified. Principal bilateral agreements in force in the Near and Middle Eastern Areas February 1, 1949 Turkey-Belgium Effective from December 1948. Provision for ERP drawing rights in Turkey's favor. Further details not yet available. Turkey-Czechoslovakia Effective from December 15, 1946, until March 31, 1949. No lists of commodities. Clearing account established for effecting payments between two countries. Mutual credit ceilings also established. Turkey-Denmark Effective from January 1, 1949, for 15 months but renewable for 1-year periods. No lists of commodities. Clearing account, expressed in dollars, established for effecting payments between the two countries. Mutual credit ceilings also established with provision for ERP drawing rights in Denmark's favor. Turkey-Finland Effective from June 20, 1948, for 1 year but renewable for 1-year periods. No lists of commodities. Clearing accounts, expressed in dollars, established for effecting payments between two countries. Mutual credit ceilings also established. Turkey-France Effective from September 21, 1946, for 1 year but renewable for 1-year periods. No lists of commodities. Clearing account, established for effecting payments between two countries. Credit ceiling established by Turkey in favor of France. A modus vivendi exchanged at the same time allows for certain exceptions to most-favored-nation treatment. Turkey-German trizone Effective from January 1, 1949, to June 30, 1949, but renewable for 1-year periods. Provides for issuance of import and export permits within limits of the quantities of goods on which the two contracting parties have agreed. Clearing account, expressed in dollars, established for effecting payments between two contracting parties. Mutual credit ceilings also established with provision for ERP drawing rights in favor of the trizone. Turkey-Italy Effective from November 15, 1948, until June 30, 1949, but renewable for 1year periods. Provides for the issuance of import and export permits within the limits of the quantities of goods on which the two countries have agreed. Clearing account, expressed in dollars, established for effecting payments between two countries. Mutual credit ceilings established with provision for ERP drawing rights in Turkey's favor. Turkey-Poland Effective from August 1, 1948, for 1 year but renewable for 1-year periods. Lists of commodities but no quantities indicated. Clearing accounts, expressed in dollars, established for effecting payments between two countries. credit ceilings also established. Turkey-Sweden Mutual Effective from June 15, 1948, for 1 year but renewable for 1-year periods. No commodity quotas nor global values established. Private compensation transactions permitted. Clearing account, expressed in Swedish crowns, established for effecting payments between the two countries. Turkey-Switzerland Effective from October 1, 1945, until August 21, 1946, but renewable for 1-year periods. Establishes clearing accounts for effecting payments between the two countries. This agreement replaces an earlier compensation agreement. Turkey-United Kingdom Effective from May 21, 1945, until April 30, 1946, but renewable for 1-year periods. All payments between the two countries to be made in sterling through Turkish accounts held by Turkish Central Bank in the Bank of England. Recent provision made for ERP drawing rights in Turkey's favor. Turkey-Yugoslavia Effective from October 20, 1947, for 1 year but renewable for 1 year periods. No lists of commodities. Payment on the basis of free foreign exchange. Egypt-France Effective from June 9, 1948, for 1 year but renewable for 1-year periods. No lists of commodities. Clearing accounts established for effecting payments between Egypt and the Franc zone. Mutual credit ceilings also established. Egypt-U. S. S. R. Barter agreement dated March 3, 1948, provides for exchange of 216,000 metric tons of wheat and 19,000 metric tons of corn by Russia for 38,000 metric tons of cotton. Egypt-Switzerland Effective from September 1, 1948, until May 1, 1949. Established export quotas for certain essential Swiss products as well as Egyptian import quotas for certain Swiss products previously excluded as being nonessential. Egypt-United Kingdom Effective through 1948. (New agreement now being negotiated). $25,000,000 in dollars allocated to Egypt and £35,000,000 released from blocked to current sterling account. Egypt to maintain import-export licensing system for trade with hard currency areas. Iran-Saudi Arabia Provides for payment to Saudi Arabia of tolls for Iranian pilgrims to Mecca. Eighty percent of the toll of 45 pounds sterling per pilgrim to be paid in merchandise, chiefly textiles and rice. Date and exact terms unknown. Iraq-United Kingdom Effective from June 30, 1948, until June 30, 1949. The equivalent of $22,000,000 allotted to Iraq in hard currencies. Provides that Iraq shall maintain an exportimport licensing system for trade with the hard-currency area. Senator MILLIKIN. Is this correct: That we are now one of the lowest tariff countries in the world? Mr. BROWN. It depends on how you figure it. Senator MILLIKIN. Figure it your own way. Mr. BROWN. You could figure the tariff any way you want to. Senator MILLIKIN. Let us take it in two ways. We have an average, as I understand it, of an 8 percent ad valorem duty, counting our free list. Mr. BROWN. Yes, sir. Senator MILLIKIN. We have an average of about 14 percent, counting our nonfree list. Mr. BROWN. A little higher, but is in that area, yes. Senator MILLIKIN. All right; 14 or 15 percent. What countries, taking the same method, have lower tariffs? Mr. BROWN. I don't know. I would have to check that. But the significance of the tariff is not necessarily dependent on an average. Senator MILLIKIN. I do not want you to weigh the reason for my question. All I want to know is what countries have a lower tariff than we have under the categories which we have suggested. Mr. BROWN. I wanted to be sure I gave you what you wanted, sir. The CHAIRMAN. Could you supply that? Mr. BROWN. Yes, sir. (The following information was subsequently supplied :) RELATIONSHIP OF CUSTOMS RECEIPTS TO TOTAL VALUE OF IMPORTS Available data indicate that, on the basis of 1939 figures (or those for the nearest available year) there were at least 11 countries in which customs receipts, in proportion to value of total imports, were lower than the corresponding figure for the United States. Not all countries report, on the same |