In individual categories 63 percent of all tractors made in this country are exported, 41 percent of all civilian aircraft, 22 percent of metal-cutting machine tools, 21 percent of combine harvesters, and 15 percent of all agricultural machinery. Thus, it is clear that U.S. exports are doing well in our principal foreign markets. Moreover, it is our manufactured products that have shown the greatest competitive strength. WE HAVE FAVORABLE TRADE BALANCES WITH THE INDUSTRIAL NATIONS OF THE WORLD Our strength in exports is in finished manufactures and the destinations of by far the greater part of these goods are the industrialized areas of the world. (See table 4.) In the first three quarters of 1961 we sold $8.6 billion worth of goods to the industralized areas of the world, but we bought from them only $5.9 billion. Our favorable balance with the industrialized areas was about $2.7 billion of which over 60 percent came as a direct result of our trade with Western Europe. This area is by far our largest single market accounting for 31 percent of our total exports in 1960 and for 27 percent of our imports. Our exports in the first 9 months of 1961 to Western Europe were 59 percent above our imports. Our exports to Japan were 73 percent more than our imports. Although our trade in finished manufactures and with industrial areas is important it is by no means the full picture. For example, foreign markets are very important for American agriculture. In 1960 the crop of 1 out of every 6 acres harvested in the United States was sold abroad. The figures are impressive, for 60 percent of our rice, 45 percent of our wheat, 40 percent of our cotton, and 28 percent of our barley were all exported. Much of the product of our natural resources also bring in revenue from overseas. In recent years 30 percent of our resin and 12 to 30 percent of our turpentine were sold abroad. to take just two of many such commodities. Thus, although exports only account for about 4 percent of our gross national product, they are by no means an unimportant factor for certain sectors of our economy. THE COMPARABILITY OF THE STATISTICS It has been suggested recently by many of the witnesses before the Dent subcommittee, among others, that the export and import statistics of the United States, as compiled and published by the Department of Commerce, are not comparable. They claim that the figures overestimate the actual export surplus of the United States. These claims arise from a basic misconception of the facts. U.S. imports and exports are value f.o.b. (free on board) at foreign ports. What this means is that the value of our imports and exports are measured excluding the cost of transportation and insurance. Thus our statistics accurately measure the values of both U.S. exports and imports and represent only the cost of the merchandise. The Assistant Secretary of Commerce, Mr. Jack N. Behrman, in trying to clear up this misunderstanding stated: "The official statistics on U.S. exports and imports, as compiled and published by the Department's Bureau of the Census, are comparable [italic ours] and do measure our sales in foreign markets and the amounts of goods obtained from foreign supplies." 1 As a postscript it is true that many foreign countries do measure their imports c.i.f. (cost of insurance and freight included in the valuation) and thus there is a legitimate question as to whether or not our import figures are directly comparable to theirs. This is because our import statistics being measured f.o.b. do not include shipping and insurance charges whereas countries using the c.i.f. valuation account for such additional costs in their published data. However, this has nothing to do with the question of the comparability of our own import and export statistics. 1 Letter to Hon. Robert N. Giaimo, dated Jan. 30, 1962. TABLE 1.-U.S. foreign trade 1950-61 [Billions of dollars] US for trade 1950-61- Mil+ Nou TABLE 2.-U.S. exports by major classes and selected commodities, 1959-60 US XP by major class 1959-60 'Includes semimanufactures. Excludes "special category" items for which security restrictions prevent publication of detailed statistics. Source: U.S. Department of Commerce. TABLE 3.-U.S. imports of major classes and selected commodities, 1959–60 US M2 majo clari 185960 TRADE EXPANSION ACT OF 1962 TABLE 4.-Balance of U.S. trade with industrialized areas 1961 All industrial areas combined: [Millions of dollars] Source: U.S. Department of Commerce: Foreign Commerce Weekly. EXPANDING EXPORTS-U.S. FIRMS SAY BRISK OVERSEAS ORDERS POINT TO NEW [A Wall Street Journal News Roundup] The volume of U.S. exports, which climbed to a record level last year, appears headed even higher for 1962. This is the conclusion of a Wall Street Journal survey of more than two dozen domestic corporations with major export businesses. Nearly all these companies report their current oversea orders equal or exceed the year-ago level. In some cases the year-to-year gains are impressively large. In no case among the concerns surveyed has there been a significant decline in exports. While the survey shows there is considerable optimism among exporters for 1962, it also reveals a good deal of uncertainty about the outlook for later years. The principal worries: The continuing disparity between U.S. and foreign wages and consequently between the costs of manufacturing; the rising industrial output of foreign, particularly European, nations, and, finally, the prospect of increasing tariff regulations against U.S. goods by the member nations of the European Common Market. BOOST FOR ECONOMY For the time being, however, the rising rate of exports could have some highly beneficial effects on the U.S. economy. Strong foreign demand for U.S.-made goods undoubtedly will contribute to easing the nation's nagging unemployment problem; in January, unemployment fell below 6 percent of the labor force for the first time in 14 months. Moreover, a healthy flow of exports could help curb the continuing drain of U.S. gold. The gold outflow stems from the fact the United States buys, lends, and gives more abroad than it receives from foreigners. Nations to which this country is indebted sometimes elect to convert part of their credits into gold. Among companies whose export sales are doing markedly well are National Acme Co., a Cleveland machine-tool maker, and Union Carbide Corp., the hig New York-based chemical concern. T. L. Strimple, president of National Acme, says, "Our export sales are holding steady at a pretty good rate." He notes exports make up 40 percent of the company's total volume. Agrees a Union rbide official: "Exports of chemicals continue at a high level and show no Lithium Corp. of America, whose exports last year were double what they HARNISCHFEGER BOOSTS EXPORTS Other U.S. corporations find they are doing well abroad because they can Concern over the U.S. export situation several years from now centers partly he tariff plans of the Common Market are an additional worry for many U.S. HOW TARIFF WOULD HURT ere is how the tariff plans of the Common Market would affect those metaling machines sold by the U.S. manufacturers to a French firm: At present e is an 11.7-percent French tariff on the U.S. machines and a 9.6-percent tariff he German ones. By the end of 1966, there will be no tariff on the German nines, but as regulations now stand the U.S. machines would still face a f of about 6 percent. There also is a possibility that this schedule will be led up so that the elimination of tariffs within the Common Market will r sooner. prevent U.S. goods from being shut out by this tariff wall, President edy has asked Congress for broad powers to reduce U.S. tariffs. The idea at the President would offer such reductions to the Common Market in exge for tariff cuts on U.S. goods. Proponents of the Kennedy proposal argue U.S. economic growth depends to a large extent on foreign trade. Oppo3, on the other hands, contend the plan would bring a flood of foreign-made s into this country and hurt employment. The proposal is now before the se Ways and Means Committee, with a vote expected by Congress later this Absolute Not all American businessmen agree that long-range prospects for U.S. exports are unfavorable. As one optimist sees it, "We'll always be able to keep one model ahead" of foreign producers. Industrialists who hold this view note that traditionally U.S. companies spend far more on research and development than their European counterparts-and thus should be able to stay ahead of the Europeans in technology. Whatever the merits of this argument, it is true that U.S. industry spends a great deal more for research and development. For 1960, the outlay amounted to $10.5 billion, compared with less than $2 billion put into research and development by all of the Common Market nations. AFL fedsheet क on JSA Safeguards gord [Fact sheet] SAFEGUARDS AGAINST IMPORT INJURY IN PROPOSED TRADE EXPANSION ACT OF 1962 (H.R. 9900) SAFEGUARDS AT ALL STAGES The bill provides safeguards against possible harm to workers, businesses and farmers who may be affected by higher imports. Despite the beneficial overall effect of expanding trade, the bill recognizes that injury can occur and aims to keep such injury to a minimum at all stages: (1) before tariff negotiations take place with other countries, certain safeguards operate (2) after tariff negotiations take place with other countries, certain safeguards operate Before negotiations ever take place, two specific prenegotiation safeguards are provided in this bill (1) Allowing President not to negotiate tariff changes on certain items if the Tariff Commisison finds that such a tariff cut would have a particularly serious impact. The bill authorizes the President to hold those items out of negotiation on the basis of factfinding and hearings, before the U.S. negotiators start tariff bargaining with other countries. (2) Forbidding President to negotiate tariff changes on any item which has had its tariff raised under the "escape clause" provision of the former trade law. For example, bicycles, stainless steel flatware, and lead and zinc tariffs have been raised under the "escape clause." No tariff negotiation may take place for such items, according to the provisions of this bill. After negotiations have taken place, the bill provides post-negotiation safeguards to help workers, companies and farmers who may have been affected by increased foreign competition. (1) Trade adjustment assistance: President Kennedy calls this "an essential part of the new trade program." The AFL-CIO convention said adjustment assistance is essential “if the American labor movement is to continue its support for a liberal trade policy." (a) Workers would get three kinds of adjustment assistance. (1) Readjustment allowances, up to 65 percent of the worker's average weekly wage up to 52 to 78 weeks. (2) Vocational education and training. (3) Relocation allowances. (b) Businessmen would be eligible for (1) technical assistance. (2) tax relief. (3) financial assistance. (c) Farmers would be eligible for (1) technical assistance. (2) tax relief. (3) financial assistance. (2) Tariff relief: If adjustment assistance by itself would not have those affected by imports from undue harm, the President could invoke "extraordinary relief" either by increasing the tariff on such items or by other tariff restrictions. |