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Senator MILLIKIN. If you have relief by quota, what would be the
Mr. FULIIAM. Approximately 13,000,000 pounds. It has been proven that our domestic consumption can absorb 13,000,000 pounds without serious harm to our industry. It does, naturally cut our market down.
Our position is that we do not want to deny a portion of our market to our foreign competitors, because we realize that under the Reciprocal Trade Act there must be something given for something taken. However, when an equal number of American citizens are harmed to benefit an equal number of foreign citizens, we can't quite understand where the benefit is.
Senator BREWSTER. That would give to Canada and Nova Scotia and Newfoundland much more exports to this country of fish than they have made historically, and much more than their existing industry would be needing to provide.
Mr. FULHAM. Well, if their imports were restricted to 43,000,000 pounds, it would not harm the people who are currently producing.
Senator BREWSTER. They would be all right, and we would be all right. In other words, it would work out amicably.
Mr. FULHAM. A year from today, if something is not done along that line, however, you can see what the situation will be.
Well, the imports for January of this year-
Mr. FULHAM. Now, if that is carried on throughout the entire year, you can see that a year from today they will have produced additional facilities which, if they then imposed the quota, would bring some hardship on them, whereas today it would not.
The CHAIRMAN. Are there any further questions of the witness?
Thank you very much for your statement. We appreciate your appearance.
Mr. Jackson, is there anything else?
The committee will recess until 2:30; and after the recess, the Tariff Commissioners will be heard first.
(Whereupon, at 1:30 p. m., the committee recessed, to reconvene at 2:30 p. m. of the same day.)
(Whereupon, the committee reconvened at 2:30 p. m., following the expiration of the noon recess.)
The CHAIRMAN. The committee will have this afternoon two members of the Tariff Commission, I believe, Mr. Gregg and Dr. Ryder.
Mr. Gregg, will you come around, please? We will start with you gentlemen first, so that you may get back to your duties.
We have before us, Mr. Gregg, H. R. 1211, on the extension of the Reciprocal Trade Agreements Act. Have you a prepared statement you wish to make ?
STATEMENT OF JOHN PRICE GREGG, COMMISSIONER, UNITED
STATES TARIFF COMMISSION, WASHINGTON, D. C.
Mr. GREGG. Yes; I would like to read a very brief statement, Senator, and then answer any questions you may have to ask.
The CHAIRMAN. Yes, sir. You may proceed and read your statement.
Mr. GREGG. My name is John P. Gregg: I have been a member of the Tariff Commission since the autumn of 1946, and since then have served as vice chairman of the Committee for Reciprocity Information, and later as an alternate member of the Interdepartmental Trade Agreements Committee.
From September 1947 to November 1947 I was a member of the United States delegation at Geneva.
From 1937 to 1941, I was secretary of the Commitee for Reciprocity Information.
Difference of views exists as to whether the Tariff Commission should advise the President, either directly or through the Interdepartmental Committee, as to whether or not a particular concession in a trade agreement will cause or threaten serious injury to doinestic producers. It is my view that it should.
So long as Congress reserved to itself the authority to fix tariffs, the principal obligation of the Tariff Commission was to supply the Congress and the Executive with unbiased, objective, factual information on the basis of which the Congress and the President could act in tariff matters.
In 1922, the Congress delegated to the President the authority to lower or raise by a maximum of 50 percent the rate of duty upon a particular product, based upon the difference in the costs of production of that product at home and abroad, on the basis of findings following investigation and hearings by the Tariff Commission.
In 1930 this authority was continued. In 1934 the Trade Agreements Act was passed, delegating additional authority to the President to modify tariffs. Section 4 of that act provides, however, that before any trade agreement is concluded, the President shall seek information and advice with respect thereto from the United States Tariff Commission and certain other agencies of the Government.
It has always seemed to me under the terms of the law that there is a distinct obligation on the Tariff Commission to supply advice with respect to all concessions under consideration, whether contained in the tariff schedules or in the general provisions of the agreements, and that the intent and spirit of the act is not fulfilled by getting merely the views and opinion of the members of the Commission, or its staff, rather than the judgment of the Commission as a whole.
It should be made clear that for the first time, that is, under the Trade Agreements Extension Act of 1948, the Commission as a body considers and transmits to the President its judgment as to whether a reduction of a present rate of duty will or will not cause or threaten serious injury to a domestic industry. Under the previous procedures this has not been the case.
At no time prior to 1948, in more than 13 years that the Trade Agreements Act had been in effect has the Tariff Commission as a body ever been consulted with respect to whether or not a particular concession will cause or threaten serious injury to the domestic industry.
On the other hand, individual commissioners have been asked this question, and the economic and technical staff of the Commission, serving on subcommittees and country committees have been asked that question-but not the Commission.
Senator CONNALLY. All of the Commissioners, individually, you say, have been consulted ?
Mr. GREGG. Some of them have.
So far as I know, there is no disagreement in any quater that in making concessions in a trade agreement, the possibility of serious injury to domestic producers should be considered.
Leaders of the administration, including two Presidents, have hitherto repeatedly declared the intention to avoid serious injury to domestic producers of agricultural and industrial products.
Certainly the President before concluding a trade agreement should have the most competent and the least biased opinions available as to the probable impact of such concessions on the domestic industry.
It has seemed to me that no agency of the Government is better fitted than the Tariff Commission to assemble the facts and render a judgment on this matter with appropriate recommendations to the President.
The Commission was created for the express purpose of aiding Congress and the President to reach conclusions regarding tariff matters.
Most of its members are professional economists who have had long experience in the Commission as members either of the Commission itself or of its staff.
For an expert body, such as the Tariff Commission, assisted by its expert staff, to form judgments as to the future effects of a given reduction in duty is by no means sheer guesswork.
The Commission has accumulated over the years a vast mass of information regarding the several thousand commodities listed in the Tariff's schedules. It has succeeded fairly well in keeping this information up to date.
For a great majority of commodities consideration of past experience as to the ratio of imports to production and to exports and as to prices, and of the known facts regarding techniques of production, wages, productivity of labor, and other conditions in the industry in this country and abroad furnishes a broad basis for forecasts, at least forecasts of somewhat general and not unduly specific character.
Although in many foreign countries the war has left abnormal conditions, and although rapid changes are taking place or may shortly take place in those conditions, the Commission has in most instances sufficient information to enable it to forecast conditions abroad, at least for the near future, much more accurately than any other Government agency.
Of course, there are some commodities concerning which greater uncertainty exists both as to the future course of imports and as to whether the effect of any probable increase in imports can be characterized as "serious injury to the domestic producers."
Even in such instances, the opinions of the Commission should be of much value in reaching conclusions concerning the effects of reductions in duties.
It has been suggested that the Tariff Commission is intended prinarily to be a nonpartisan, fact-finding body, and should not, thereCore, as a body, participate through a member subject to its direction
n the decisions of the committee which may be considered to involve policy.
As a matter of fact, in two of the Commission's major functionshat under the escape clause, and that under section 22 of the Agricultural Adjustment Act, as amended—the Commission is now required by law or Executive order to recommend what may be considered policy decisions to the President.
Moreover, it seems just as appropriate that the Commission as a body should express an opinion regarding a trade-agreement concession as that a member of the Commission or a member of its staff in a subcommittee should do so in his individual capacity.
It seems to me, however, that under the proposed bill, the Tariff Commission in recommending to the President through the Trade Agreements Committee, positive action on a concession to be granted or withheld, is participating in policy making to a greater degree than under the present act.
The Commission, under the present act now makes no recommendation. It rather makes a finding that a rate lower than X percent, for example, will cause or threaten serious injury.
The President is wholly free to make the policy decision, either because he may disagree with the Commission or because other considerations outweigh the probability of serious injury.
That completes my statement, Senator.
The CHAIRMAN. You say you have served on the committee? Is that right?
Mr. GREGG. On the interdepartmental committee? As an alternate, yes, sir..
The CHAIRMAN. You have actually served on it, though, in the past?
Mr. GREGG. Yes, sir.
The CHAIRMAN. And what other members of the Commission have served on it?
Mr. GREGG. Mr. Ryder is the official member. The chairman is the official member. I have served as an alternate. I think the vice chairman, Mr. Edminster, has served as an alternate, and Mr. Brossard at Geneva, I think, also served as an alternate. Further than that I am not informed.
The CHAIRMAN. I see. So that you have actually served on that committee. Mr. GREGG. Yes, sir. The CHAIRMAN. That is the point that I was getting at. Mr. GREGG. Yes, sir.
The CHAIRMAX. Reference is made to the Reciprocal Trade Agreements Act.
The organic act did enjoin the President to accept the responsibility of getting both information and advice from the Tariff Commission; did it not? Mr. GREGG. Yes, sir.
The CHAIRMAN. Of course, as you said, a difference in viewpoint may exist in the Commission.
Mr. GREGG. Yes.
The CHAIRMAN. That, of course, is quite readily understandable. Mr. GREGG. Yes, sir.
The CHAIRMAN. But if the President has the opportunity of being advised, through the presence of some one member of the Commission, acting in conjunction with representatives from other agencies of Government, would you not say it was a reasonable deduction that he might get the view or the divided view of the Commission on any particular point, if it became material in the negotiation of a trade agreement?
Mr. GREGG. I think not, Senator. By no means, unless he specifically requested it. Because the member of the Commission who sits on the interdepartmental committee does not speak for the Commission.
The CHAIRMAN. Oh, I understand that, but he is there.
The CHAIRMAN.' And he has the right to give his views and opinions,
The CHAIRMAN. He is there for consultation purposes. And is it not to be assumed, that if there is a sharp difference of opinion in the Commission the representative of the Commission in the interdepartmental committee would certainly make that fact known in the discussions ?
Mr. GREGG. Mr. Chairman, at least so far as my experience is concerned, the other members of the Commission were never even consulted, and do not know what is at issue in the interdepartmental committee. If it is with reference to a particular rate of duty, a concession to be offered, the other members of the Commission are not informed about it. It is never considered by the Commission.
The CHAIRMAN. You served on the committee?
The CHAIRMAN. Well, did you keep it a secret from your fellow Commissioners what the issues were, what the opinions were, in this interdepartmental committee?
Mr. GREGG. Yes, sir. I never took it up with the Commission, or with any member of the Commission, other than Mr. Ryder, who was the Chairman, and for whom I acted.
The CHAIRMAN. But you were free to do so, if you wished to.
The CHAIRMAN. You hardly think you could have discussed this matter among yourselves, within your own Commission?
Mr. GREGG. I hardly think so, sir. That was not the understanding that I had.
The CHAIRMAN. Well, now, of course, men differ as to whether the finding of peril points is a very helpful function, and on that point I will not ask you any questions, because it is a point upon which men can have differences of view and opinion.
You have frankly stated your own opinion on that, as I understood your earlier statement.
Mr. GREGG. Yes, sir.