bokand diligent

Mr. Raymond E. Salvati, chairman, Island Creek Coal Co.
Mr. Leighton Wilkie, president, DoAll Co.

Mr. Donovan Wilmot, former vice president, Aluminum Co. of
America.

Mr. David J. Winton, president, Winton Lumber Co.

The public advisers are a group of private citizens representing industry, labor, agriculture, and the general public who were appointed by the Secretary of State upon the recommendation of the Cabinet-level Trade Policy Committee. Our function was to provide advice and judgment to the executive branch in its conduct of tariff renegotiations.

I should like to commend to the committee's attention our report to the President. I should like to submit the report for the record.

The CHAIRMAN. Without objection, it will be included in the record.
(The report referred to follows:)

STATEMENT TO THE PRESIDENT BY THE PUBLIC ADVISERS TO THE U.S. DELEGATION
TO THE GATT TARIFF CONFERENCE, GENEVA, SWITZERLAND

As public advisers to the U.S. delegation to the Tariff Conference at Geneva, we are pleased to report to you our observations on the outcome of that Conference and our conclusions concerning the need for further action to reduce barriers to international trade.

The negotiations at Geneva should help to open further foreign markets for our exports at a time when the improvement of our trading position is of key importance to our economy. In return for the limited concessions in U.S. tariffs that our delegation was authorized to offer, the American negotiators bargained diligently and effectively to obtain concessions of value to our export trade. We were impressed by the devotion and competence of all members of the U.S. delegation, representing nine agencies of the Government. In the light of the modest tariff reduction authority provided by the Trade Agreements Act of 1958, and the cumbersome item-by-item negotiation imposed by the requirements of that act, the relatively favorable outcome of the negotiations reflects credit on their diligence and skill.

We have reviewed our experience at Geneva in terms of the need for future authority to reduce barriers to international trade. We have considered the probable impact of the European Economic Community on our economic and our political interests in the world. We believe that the discrimination inherent in the Common Market's removal of internal tariffs while retaining an average external tariff calls for greater negotiating authority to retain or expand our export position in Europe. We became more aware of the special problems of less developed countries whose need for trade should be increasingly taken into account. Finally, we have taken account of the necessity for linking the countries of the free world more closely together in the face of the longterm challenge to the survival of free institutions that is represented by the Soviet bloc.

With these considerations in mind, we are unanimously of the belief that it is the part of American leadership to continue to move forward boldly to reduce further barriers to trade among the free nations.

We welcome, therefore, your proposals for new trade legislation. The times and the circumstances call for broad changes in the character of our basic trade policy law. In our opinion, passage of an act embodying the basic principles of the proposed Trade Expansion Act is necessary for the strengthening of the U.S. economy, for fostering orderly economic development in the poorer nations, and for promoting the unity of the free world.

Our experience convinces us that the broader powers which the new act would provide the President are necessary if we are to continue to lead in bringing down the obstacles that still hamper the exchange of goods and services within the free world. The safeguard provisions in the proposed legislation have been desirably modernized. The hampering features of the expiring legislation have been modified, while at the same time provision has been made for dealing with possible adjustment problems of American labor, industry, and agriculture.

We should like to stress also the importance of other national policies to maintain and strengthen our international competitive position. The trade expansion programs should stimulate and enable American exporters to retain and to develop market opportunities abroad.

It has been a stimulating experience to have participated in the Geneva negotiations as representatives of industry, labor, agriculture, and the general public. We appreciate the opportunity to have served.

Public advisers

Mr. Andrew J. Biemiller, director, AFL-CIO Legislative Department.

Mr. Homer L. Brinkley, executive vice president, National Council of Farmer Cooperatives.

Mr. Alfred C. Neal, president, Committee for Economic Development.

Mr. Raymond E. Salvati, chairman, Island Creek Coal Co.

Mr. Claude Wickard, former Secretary of Agriculture.

Mr. Leighton, Wilkie, president, DaAll Co.

Mr. Donovan Wilmot, former vice president, Aluminum Co. of America.

Mr. David J. Winton, president, Winton Lumber Co.

The following public advisers were either out of the country or otherwise unavailable and thus did not have an opportunity to participate in the preparation of the statement or to approve it before submission to the President:

Mr. Elliott V. Bell, editor and publisher, Business Week.

Mr. Morris C. Dobrow, executive secretary and treasurer, Writing Paper
Manufactures Association.

Mr. Jacob S. Potofsky, president, Amalgamated Colthing Workers of America.
Mr. Bert Seidman, economist, Research Department, AFL-CIO.

Mr. WICKARD. Our unique opportunity to observe these negotiations, the implementation of the Trade Agreements Act extended by the Congress in 1958, led us to a number of conclusions.

First, we were impressed by the skill, competence, devotion, and perseverance displayed by our negotiators in the face of the obstacles they had. Faced with the severely restrictive nature of the negotiating authority granted under existing legislation and the archaic method of bargaining on an item-by-item approach, our negotiators achieved results which stand as ample proof of their ability and devotion. To quote a section from our statement to the President:

In return for the limited concessions in tariffs that our delegation was authorized to offer, the American negotiators bargained diligently and effectively to obtain concessions of value to our export trade. We were impressed by the devotion and competence of all members of the *** delegation.

Second, for reasons which directly affect our national security and well-being, we need, and urgently need, new trade legislation. To quote another section of our report to the President:

We welcome your proposals for new trade legislation. The times and the circumstances call for broad changes in the character of our basic trade policy law. In our opinion, passage of an act embodying the basic principles of the proposed Trade Expansion Act is necessary for the strengthening of the U.S. economy, for fostering orderly economic development in the poorer nations, and for promoting the unity of the free world.

Let me emphasize again that this is the collective conclusion of eight public advisers, representing different segments of the economy, industry, agriculture, labor, and the general public. In short, the public advisers reflect a cross section of our diversified economy speaking in support of a new national trade policy.

A third conclusion reached by the public advisers is that our present authority to negotiate for the reduction of trade barriers is inadequate. In the recent Geneva negotiations we were not able to match the negotiating authority of the Common Market. The item-by-item bargain

Public advirep

ing under the present law is extremely cumbersome and inadequate to meet our needs. If we are to open and expand foreign markets for American industry and agriculture, and in this way take effective steps to assure the vitality and security of the free world, we must provide the President with the authority necessary to bargain effectively for the reduction of barriers to trade among the nations of the free world. Although these conclusions are the direct reflection of our cumulative experience in the past year, they are founded on many more years of contact with foreign trade and observation of its effect on our economy. The single outstanding conclusion reached from this longer period of association is that never before has trade policy been a more important factor in our foreign relations; never before has expanding trade been more essential to our economic well-being. In the international sphere, our ability to strengthen free world economics-and especially to give new vitality to the Atlantic Community-is a major factor promoting our way of life. And in the national sphere our ability to expand exports will stimulate employment, wages, and profitsin short our economic growth and standard of living.

Never jo for

more importe

In closing, I should like to reemphasize the unanimous observation of the public advisers that our present tariff negotiating authority is outmoded and inadequate to serve our national interests. Further progress is dependent upon broad new authority. We must equip ourselves to negotiate effectively. We must demonstrate to ourselves and to the world that we remain prepared to fulfill the responsibilities of imaginative and positive leadership. We are convinced that the President must have the broader powers which the new act would provide.

Thank you.

The CHAIRMAN. We thank you for bringing to us the views of the public advisers to the GATT whose names you read into the record and who worked with you in that capacity, Mr. Wickard.

Again we appreciate you personally being with us this morning.
May I ask, are you still engaged in agricultural activities

Mr. WICKARD. Yes, sir, I live and help to operate the family farm in the State of Indiana.

The CHAIRMAN. Any questions of Mr. Wickard, Mr. Curtis?

Mr. CURTIS. Yes, Mr. Chairman, I am so pleased that we have a witness before us who can speak with some authority on GATT, which is our main machinery, it it not, for implementing the author

Ail U) ties that we grant the President under the Reciprocal Trade Act!

Mr. WICKARD. That is correct.

Mr. CURTIS. One question I would like to ask. You praised our group of negotiators. It is true, Mr. Wickard, that our negotiators have to be Government people, civil service people?

Mr. WICKARD. Well, I think necessarily that they should be Government people.

Mr. CURTIS. As a matter of fact they are, are they not?

Mr. WICKARD. Yes, sir.

Mr. CURTIS. As I understand, actually whether it is an unwritten law or actually regulation, they must be?

Mr. WICKARD. I am not sure but I think that is good government for them to be.

Mr. CURTIS. This rule, however, does not apply to other countries in negotiations, does it?

Mr. WICKARD. I am not familiar with it but all the negotiators whom I met, from other countries, appeared to have a very firm Government status of some kind.

Mr. CURTIS. I am very much interested in that because when I last checked on this, which was several years ago I must confess, and it was done partly by myself but also in questioning witnesses, it was really the policy the other way around.

For instance, in one of our very important textile negotiations on the British team of negotiators was one of the leading textile manufacturers, and one of the reasons I raised this question, and I have raised it before, I was going to suggest maybe we ought to change our policy. Why should we not have people on our negotiating team who are knowledgeable in these fields?

Mr. WICKARD. I think the public advisers serve that purpose, at least to some extent.

Mr. CURTIS. No, not when you get into a specific thing such as the complexities of the textile or any other industries, for that matter. A great deal of the trade and the manner in which it is regulated and the various kinds of unfair trade practices that can exist in regulations require a rather detailed knowledge of the industry or the economic process, would you not agree?

Mr. WICKARD. I see under the proposed legislation, the public will be given an opportunity to present its views to the Tariff Commission before these negotiations are undertaken.

Mr. CURTIS. I am not discussing that. I know that.

I am talking about when you get right into the actual negotiations. I will not dwell on it.

Your recommendation is that you think it is good that we do not have anyone, outside the Government that is, to be present in these negotiations?

Mr. WICKARD. I would feel that it would not be well to have industry representatives who are beholden entirely to that industry trying to speak for the overall Government policy.

Mr. CURTIS. I do not want to have anyone hoeing their own particular row. I put it in a different way, having people present who have knowledge. I would hope that whoever we have there would be objective but you immediately assume that a person, who has knowledge in this area, would not be objective and that I would reject, I do not think that would be so.

I am looking to getting people with knowledge on our negotiating

team.

Mr. WICKARD. My observation at Geneva was that we did have people there who had knowledge, very intimate and detailed knowledge, in every sphere of our economic activity.

I was impressed with the competence of those people.

Mr. CURTIS. But you, of course, would not compare that kind of knowledge with a person who had been in civil service, a fine person, a knowledge he would have, say, of textiles, that a person who may have spent his 30 years in the industry would have. You surely recognize the difference. That is not casting aspersions on the civil

service and I meant no such thing. I am talking just as a matter of fact. If you have a person who has been specializing in the field, of course they are apt to know more.

The second question that I wanted to ask you is in regard to our recent negotiations because, as I understood more or less the situation. in our previous negotiations with the Western European countries and others, for that matter, we have granted away many concessions in previous trading but the other countries, in using the reason of balance of payments, had not actually allowed their concessions to go through. They had imposed a variety of trade barriers, quotas, licenses, even embargoes, subsidies, monetary exchange, and so forth, to rob us of those benefits.

In the light of the fact of our recent negotiations, the balance-oftrade situation has switched against the United States, I cannot quite understand why you felt that we did not have enough trading material, as it were, to get the proper concessions from particularly the Western Europeans.

Why could we not use and have used effectively this switch in balance of trade and begin to get some of the quid pro quo which we had bargained for in the past?

Would you comment on that?

Mr. WICKARD. Yes. We were informed and we recognized, I think, that there had been some failure on the part of other countries to fulfill their obligations under previous negotiations because of what they claim was balance-of-payments problems in their own economy. I know that our negotiators were constantly reminding these people of their failure and I believe that compensatory agreements were agreed upon which recognized the failure of what had happened in the past.

I am also sure that in the future our problem in this field will be taken into consideration and must be taken into consideration by our negotiators.

Mr. CURTIS. But, Mr. Wickard, in your statement and in the statement of President Kennedy reporting to Congress on this nothing was said about this. Instead, you use the same language that the President used:

Faced with the severely restrictive nature of the negotiating authority granted under existing legislation and the archaic method of bargaining on an item-byitem approach, our negotiators achieved results which stand *

The point is that the real significant economic factor that lay at the base of these recent negotiations was this change in the balance-ofpayment problem.

Now, the President says nothing about it; you ignore it, and yet how can this committee believe, or I believe, that this was a major factor and was pressed by our negotiators?

Mr. WICKARD. I know it was.

Mr. CURTIS. Then why did you not say something about it?

Mr. WICKARD. I did not attempt to cover every observation or every

thing that came up.

Mr. CURTIS. You took the trouble to put it the other way.
Mr. WICKARD. Which is, I think, an honest appraisal.