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duce either because they are not produced in this country, or are not produced in any significant quantity. They provide us with products we need but cannot efficiently make or grow (such as bananas or coffee), supplement our own steadily depleting natural resources with items not available here in quantity (such as manganese or chome ore, 90 percent or more of which must be imported if our steel mills are to operate), and contribute to our industrial efficiency, our economic growth, and our high level of consumption. Those imports that do compete are equal to only 1 or 11⁄2 percent of our total national production; and even these imports create jobs directly for those engaged in their processing. distribution, or transportation, and indirectly for those employed in both export industries and in those industries dependent upon reasonably priced imported supplies for their own ability to compete.

Moreover, we must reduce our own tariffs if we hope to reduce tariffs abroad and thereby increase our exports and export surplus. There are many more American jobs dependent upon exports than could possibly be adversely affected by increased imports. And those export industries are our strongest, most efficient, highest paying growth industries.

It is obvious, therefore, that the warnings against increased imports based upon the lower level of wages paid in other countries are not telling the whole story. For this fear is refuted by the fact that American industry in general. and America's highest paid industries in particular, export more goods to other markets than any other nation; sell far more abroad to other countries than they sell to us; and command the vast preponderance of our own market here in the United States. There are three reasons for this:

(a) The skill and efficiency of American workers, with the help of our machinery and technology, can produce more units per man-hour than any other workers in the world, thus making the competitive cost of our labor for many products far less than it is in countries with lower wage rates. For example, while a United States coal miner is paid 8 times as much per hour as the Japanese miner, he produces 14 times as much coal-our real cost per ton of coal is thus far smaller-and we sell the Japanese tens of millions of dollars worth of coal each year.

(b) Our best industries also possess other advantages-the adequacy of low-cost raw materials or electrical power, for example. Neither wages nor total labor costs is an adequate standard of comparison if used alone.

(c) American products can frequently compete successfully even where foreign prices are somewhat lower by virtue of their superior quality, style. packaging, servicing, or assurance of delivery.

Given this strength, accompanied by increasing productivity and wages in the rest of the world, there is less need to be concerned over the level of wages in the low-wage countries. These levels, moreover, are already on the rise, and we would hope, will continue to narrow the current wage gap, encouraged by appropriate consultations on an international basis.

This philosophy of the free market-the wider economic choice for men and nations-is as old as freedom itself. It is not a partisan philosophy. For many years our trade legislation has enjoyed bipartisan backing from those members of both parties who recognized how essential trade is to our basic security abroad and our economic health at home. This is even more true today. The Trade Expansion Act of 1962 is designed as the expression of a nation, not of any single faction, not of any single faction or section. It is in that spirit that I recommend it to the Congress for prompt and favorable action.

II. PROVISIONS OF THE BILL

New negotiating authority. To achieve all of the goals and gains set forth above to empower our negotiators with sufficient authority to induce the EEC to grant wider access to our goods and crops and fair treatment to those of Latin America, Japan, and other countries, and to be ready to talk trade with the Common Market in practical terms-it is essential that our bargaining authority be increased in both flexibility and extent. I am therefore requesting two basic kinds of authority to be exercised over the next 5 years:

First, a general authority, to reduce existing tariffs by 50 percent in reciprocal negotiations. It would be our intention to employ a variety of techniques in exercising this authority, including negotiations on broad categories or subcategories of products.

Secondly, a special authority, to be used in negotiating with the EEC, to reduce or eliminate all tariffs on those groups of products where the United States

and the EEC together account for 80 percent or more of world trade in a representative period. The fact that these groups of products fall within this special or "dominant supplier" authority is proof that they can be produced here or in Europe more efficiently than anywhere else in the world. They include most of the products which the members of the Common Market are especially interested in trading with us, and most of the products for which we want freer access to the Common Market; and to a considerable extent they are items in which our own ability to compete is demonstrated by the fact that our exports of these items are substantially greater than our imports. They account for nearly $2 billion of our total industrial exports to present and prospective Common Market members in 1960, and for about $1.4 billion of our imports from Ped co these countries. In short, this special authority will enable us to negotiate for chea a dramatic agreement with the Common Market that will pool our economic strength for the advancement of freedom.

To be effective in achieving a breakthrough agreement with the EEC so that our farmers, manufacturers, and other free world trading partners can participate, we will need to use both the dominant supplier authority and the general authority in combination. Reductions would be put into effect gradually in stages over 5 years or more. But the traditional technique of trading one brick at a time off our respective tariff walls will not suffice to assure American farm and factory exports the kind of access to the European market which they must have if trade between the two Atlantic markets is to expand. We must talk instead in terms of trading whole layers at a time in exchange for other layers, as the Europeans have been doing in reducing their internal tariffs, permitting the forces of competition to set new trade patterns. Trading in such an enlarged basis is not possible, the EEC has found, if traditional item-byitem economic histories are to dominate. But let me emphasize that we mean to see to it that all reductions and concessions are reciprocal, and that the access we gain is not limited by the use of quotas or other restrictive devices. Safeguarding interests of other trading partners.-In our negotiations with the Common Market, we will preserve our traditional most-favored-nation principle under which any tariff concessions negotiated will be generalized to our other trading partners. Obviously, in special authority agreements where the United States and the EEC are the dominant suppliers, the participation of other nations often would not be significant. On other items, where justified, compensating concessions from other interested countries should be obtained as part of the negotiations. But in essence we must strive for a nondiscriminatory trade partnership with the EEC. If it succeeds only in splintering the free world, or increasing the disparity between rich and poor nations, it will have failed to achieve one of its major purposes. The negotiating authority under this bill will thus be used to strengthen the ties of both "Common Markets" with, and expand our own trade in, the Latin American Republics, Canada, Japan, and other non-European nations—as well as helping them maximize their opportunities to trade with the Common Market.

The bill also requests special authority to reduce or eliminate all duties and other restrictions on the importation of tropical agricultural and forestry products supplied by friendly less-developed countries and not produced here in any significant quantity, if our action is taken in concert with similar action by the Common Market. These tropical products are the staple exports of many lessdeveloped countries. Their efforts for economic development and diversification must be advanced out of earnings from these products. By assuring them as large a market as possible, we are bringing closer the day when they will be able to finance their own development needs on a self-sustaining basis.

Safeguards to American industry.-If the authority requested in this act is used, imports as well as exports will increase; and this increase will, in the overwhelming number of cases, be beneficial for the reasons outlined above. Nevertheless ample safeguards against injury to American industry and agriculture will be retained. Escape-clause relief will continue to be available with more up-to-date definitions. Temporary tariff relief will be granted where essential. The power to impose duties or suspend concessions to protect the national security will be retained. Articles will be reserved from negotiations whenever such action is deemed to be in the best interest of the Nation and the economy. And the four basic stages of the traditional peril point procedures and safeguards will be retained and improved:

the President will refer to the Tariff Commission the list of proposed items for negotiations;

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the Tariff Commission will conduct hearings to determine the effect of concessions on these products;

the Commission will make a report to the President, specifically based, as such reports are based now, upon its findings of how new imports might lead to the idling of productive facilities, the inability of domestic producers to operate at a profit, and the unemployment of workers as the result of anticipated reductions in duties; and

the President will report to the Congress on his action after completion of the negotiations. The present arrangements will be substantially improved, however, since both the Tariff Commission recommendation and the President's report would be broader than a bare determination of specific peril points; and this should enable us to make much more informed use of these recommendations than has been true in the past. Trade adjustment assistance.-I am also recommending as an essential part of the new trade program that companies, farmers, and workers who suffer damage from increased foreign import competition be assisted in their efforts to adjust to that competition. When considerations of national policy make it desirable to avoid higher tariffs, those injured by that competition should not be required to bear the full brunt of the impact. Rather, the burden of economic adjustment should be borne in part by the Federal Government.

Under existing law, the only alternatives available to the President are the imposition or refusal of tariff relief. These alternatives should continue to be available.

The legislation I am proposing, however, provides an additional alternative called trade adjustment assistance. This alternative will permit the executive branch to make extensive use of its facilities, programs, and resources to provide special assistance to farmers, firms, and their employees in making the economic readjustments necessitated by the imports resulting from tariff concessions.

Any worker or group of workers unemployed or underemployed as a result of increased imports would, under this bill, be eligible for the following forms of assistance:

1. Readjustment allowances providing as much as 65 percent of the individual's average weekly wage for up to 52 weeks for all workers, and for as many as 13 additional weeks for workers over 60, with unemployment insurance benefits deducted from such allowances to the extent available; 2. Vocational education and training assistance to develop higher and different skills;

3. Financial assistance for those who cannot find work in their present community to relocate to a different place in the United States where suitable employment is available.

For a businessman or farmer adversely affected by imports, there should be available

1. Technical information, advice, and consultation to help plan and implement an attack on the problem;

2. Tax benefits to encourage modernization and diversification;

3. Loan guarantees and loans otherwise not commercially available to aid modernization and diversification.

Just as the Federal Government has assisted in personal readjustments made necessary by military service, just as the Federal Government met its obligation to assist industry in adjusting to war production and again to return to peacetime production, so there is an obligation to render assistance to those who suffer as a result of national trade policy. Such a program will supplement and work in coordination with, not duplicate, what we are already doing or proposing to do for depressed areas, for small business, for investment incentives, and for the retraining and compensation of our unemployed workers. This cannot be and will not be a subsidy program of Government paternalism. It is instead a program to afford time for American initiative, American adaptability, and American resiliency to assert themselves. It is consistent with that part of the proposed law which would stage tariff reductions over a 5-year period. Accordingly, trade adjustment assistance, like the other provisions of the Trade Expansion Act of 1962, is designed to strengthen the efficiency of our economy, not to protect inefficiencies.

Authority to grant temporary tariff relief will remain available to assist those industries injured by a sudden influx of goods under revised tariffs. But the accent is on "adjustment” more than "assistance." Through trade adjustment

prompt and effective help can be given to those suffering genuine hardship in adjusting to import competition, moving men and resources out of uneconomic production into efficient production and competitive positions, and in the process o preserving the employment relationships between firms and workers wherever possible. Unlike tariff relief, this assistance can be tailored to their individual needs without disrupting other policies. Experience with a similar kind of program in the Common Market, and in the face of more extensive tariff reductions than we propose here, testifies to the effective but relatively inexpensive nature of this approach. For most affected firms will find that the adjustment involved is no more than the adjustment they face every year or few years as the result of changes in the economy, consumer taste, or domestic competition. The purpose of this message has been to describe the challenge we face and the tools we need. The decision rests with the Congress. That decision will either mark the beginning of a new chapter in the alliance of free nations, or a threat to the growth of Western unity. The two great Atlantic markets will either grow together or they will grow apart. The meaning and range of free economic choice will either be widened for the benefit of freemen everywhere or confused and constricted by new barriers and delays.

Last year, in enacting a long-term foreign-aid program, the Congress made possible a fundamental change in our relations with the developing nations. This bill will make possible a fundamental, far-reaching, and unique change in our relations with the other industrialized nations, particularly with the other members of the Atlantic community. As NATO was unprecedented in military history, this measure is unprecedented in economic history. But its passage will be long remembered and its benefits widely distributed among those who work for freedom.

At rare moments in the life of this Nation an opportunity comes along to fashion out of the confusion of current events a clear and bold action to show the world what it is we stand for. Such an opportunity is before us now. This bill, by enabling us to strike a bargain with the Common Market, will “strike a blow” for freedom.

THE WHITE HOUSE, January 25, 1962.

JOHN F. KENNEDY.

COMMITTEE ON WAYS AND MEANS, U.S. HOUSE OF REPRESENTATIVES

1102 New House Office Building

[For immediate release for the press February 16, 1962]

CHAIRMAN WILBUR D. MILLS, DEMOCRAT, OF ARKANSAS, COMMITTEE ON WAYS AND MEANS, HOUSE OF REPRESENTATIVES, ANNOUNCES PUBLIC HEARINGS ON PRESIDENT'S RECIPROCAL TRADE AGREEMENTS PROPOSAL

Chairman Wilbur D. Mills, Democrat, of Arkansas, Committee on Ways and Means, House of Representatives, today announced that the Committee on Ways and Means would begin public hearings on Monday, March 12, 1962, for the purpose of receiving testimony on the President's reciprocal trade agreements proposal. This proposal is contained in H.R. 9900, the Trade Expansion Act of 1962, which was introduced by Chairman Mills on January 25, 1962.

A summary of H.R. 9900 is attached to this press release. Reference may also be made to the message of the President on this subject of January 25, 1962, which is available as House Document 314, 87th Congress.

Chairman Mills stated that officials of the executive departments will be the first witnesses, at the beginning of the hearings, to be followed by public witnesses.

Chairman Mills pointed out that the President's existing trade agreement authority expires on June 30, 1962, and that in view of the desirability for affording time for the enactment of legislation before that date, the time available to the Committee on Ways and Means for these hearings necessarily will be limited.

Important.-Due to this fact it will be necessary for all organizations, groups and individuals with a similar interest and position to designate one spokesman to speak for the group or groups concerned so as to conserve the time of the committee and witnesses and at the same time avoid needless repetitious testi

mony. This is required in order to enable the committee to make a more adequate time allocation available to witnesses expressing differing points of view. In the past it has been the experience of the committee that there have been numerous requests to be heard by many persons and groups representing the same interests wherein it appears that there would have been an undue amount of needlessly repetitious testimony since, in general, the position of many of these groups is the same on this subject-either supporting or opposing this type of legislation for the same reasons. These groups have cooperated with the committee in the past in avoiding time-consuming, needless repetition which adds nothing to the knowledge or understanding of the committee or the interested public. It is again urged that these groups cooperate with the committee. In cases where there are significant differences within an organization or group, this fact should be pointed out in the request to be heard and the committee will undertake to schedule one spokesman representing the different points of view.

It is emphasized that all persons who desire to do so will be permitted to file written statements for the consideration of the committee and for inclusion in the printed record, in lieu of presenting testimony in a personal appearance. Any such written statement should clearly indicate that it is to be made a part of the printed record. A minimum of three copies of written statements should be submitted to Leo H. Irwin, Chief Counsel, Committee on Ways and Means, Room 1102, New House Office Building, Washington, D.C. These statements should be submitted by not later than March 23, 1962.

Persons desiring to appear and testify before the committee should submit their request to Leo H. Irwin, Chief Counsel, Committee on Ways and Means, Room 1102, New House Office Building, Washington 25, D.C., not later than the close of business Monday, March 5, 1962.

Important. To properly schedule witnesses and to allocate time if this has to be done, it will be necessary for the request to specify:

(1) The name, address, and capacity in which the witness will appear; (2) The time the witness desires in which to present his direct oral testimony;

(3) Whether the witness, in general, supports or opposes the President's proposal; and

(4) The particular subjects, titles, or sections of the bill to which testimony will be directed.

A witness cannot be properly scheduled unless the above information is contained in the request.

Witnesses who are scheduled to appear will be notified as soon as possible after the termination date for receipt of requests to be heard-March 5, 1962. A number of individuals have already expressed their interest in this subject to the Committee on Ways and Means and have indicated a desire in presenting either oral or written testimony to the committee. However, due to the very heavy volume of requests which are anticipated and the need for the information specified herein in the interest of orderly procedure and to assure that every individual who desires to testify will have an equal opportunity to present a request, it will be necessary for all persons who have heretofore expressed an interest in testifying in person to again indicate their interest in complying with the above requirements.

Also, in view of the time schedule and the necessity for a firm, orderly procedure in the scheduling of witnesses, it is emphasized that witnesses must appear on the day on which they are scheduled and that it will not be possible, after the schedules are established, for witnesses to shift their hearing date. A shift where the schedule is established balancing pro and con witnesses on the same day on the same subject is impossible since it involves the shifting of many other witnesses and results in a chain reaction of difficulties in scheduling. Witnesses who are scheduled to appear in person before the committee should, where possible, submit a minimum of 75 copies of their statements for the use of the committee members and staff at least 24 hours in advance of their scheduled appearance. If a witness also desires that his statement be made available to the press and the interested public, it is suggested that at least 75 additional copies be submitted for this purpose to the staff office, room 1102, New House Office Building, on the witness' date of appearance.

Persons submitting statements in lieu of an appearance may subunit the number noted above if they desire the same distribution.