of such tribunal shall be final and conclusive and shall not be subject to review by any court or officer.

SEC. 405. SEPARABILITY.

If any provision of this Act or the application of any provision to any circumstances or persons shall be held invalid, the validity of the remainder of this Act, and of the application of such provision to other circumstances or persons, shall not be affected thereby.

SEC. 406. AUTHORIZATION OF APPROPRIATIONS.

In addition to appropriations authorized by section 316 of this Act, there is hereby authorized to be appropriated from time to time to any agency performing functions under this Act such sums as may be necessary to perform such functions, which sums are authorized to remain available until expended. SEC. 407. DEFINITIONS.

For the purpose of this Act

(a) The term "agency" includes any agency, department, board, wholly or partly owned corporation, instrumentality, commission, or establishment of the United States Government.

(b) The term "duty or other import restriction" includes (1) the rate and form of an import duty and classification of an article, and (2) a limitation, prohibition, charge, and exaction other than duty, imposed on the importation or imposed for the regulation of imports.

(c) The term "firm" includes an individual proprietorship, partnership, joint venture, association, corporation (including a development corporation), business trust, cooperative, trustees in bankruptcy, and receivers under decree of any court. A firm, together with any predecessor, successor, or affiliated firm controlled or substantially beneficially owned by substantially the same persons, may, where appropriate, be considered a single firm.

(d) The term "function" includes any duty, obligation, power, authority, responsibility, right, privilege, discretion, or activity.

(e) The term "industry” includes firms producing agricultural, forestry, or livestock commodities.

(f) An imported article may be "directly competitive with" a domestic article at an earlier or later stage of processing, and a domestic article may be "directly competitive with" an imported article at an earlier or later stage of processing, if the importation of the imported article has an economic effect on producers of the domestic article comparable to the importation of articles in the same stage of processing as the domestic article.

(g) The term "product" with respect to any country means an article which is the growth, manufacture, or produce of that country.

Section b

SECTION-BY-SECTION ANALYSIS OF TRADE EXPANSION ACT OF 1962 (H.R. 9900)
AS PREPARED BY THE EXECUTIVE BRANCH

The Trade Expansion Act of 1962 consists of four titles. Title I (secs. 101– 102) is entitled "Title, Effective Date, and Purposes," title II (secs. 201-250) "Trade Agreements," title III (secs. 301-363) "Adjustment Assistance," and title IV (secs. 401-407) "General Provisions."

TITLE I-TITLE, EFFECTIVE DATE, AND PURPOSES

Section 101. Short title and effective date

This section provides that the short statutory title of the act is the "Trade Expansion Act of 1962," and that it will become effective on July 1, 1962. Section 102. Statement of purposes

This section sets forth the two basic purposes of the act, which in turn serve the overall purpose stated in the long statutory title of promoting the general welfare, foreign policy, and security of the United States. The first purpose is to achieve certain specific objectives by lowering trade barriers through trade agreements affording mutual benefits to such basic interests as the general welfare, foreign policy, and national security of the parties to such agreements. These specific objectives are (1) to benefit the economy of the United States, (2) to strengthen economic and political relations between

the United States and the other countries of the free world and especially w the countries of the European Economic Community (hereinafter referr to as the EEC), (3) to assist the economies of countries in the earl stages of economic development, and (4) to counter economic penetration international communism. The second purpose of the act is to provide adju ment assistance, where appropriate, to permit industrial and agricultu enterprises, workers, and farmers to adjust to new competitive conditio which may result from increased trade with the EEC and foreign countri TITLE II-TRADE AGREEMENTS

CHAPTER 1-GENERAL AUTHORTY

Section 201. Authority for all trade agreements

Subsection (a) is based largely upon section 350(a)(1) of the Tariff Act 1930, as amended, and provides the two basic authorities for the trade agre ments program. Although this subsection does not contain the requireme of a Presidential finding as such, the President's authority is limited by t requirement that he may take action only if it will further the purposes specific and elaborated in section 102. The finding, therefore, must take place, bi it is implicit and informal rather than explicit and formal. As for th first authority, it provides that the President may enter into trade agreemen with other countries and instrumentalities thereof, such as the EEC, but on until the close of June 30, 1967. Such agreements may be negotiated on a article-by-article basis or on the basis of such groupings of articles as may b appropriate. As for the second authority, subsection (a) provides that th President may at any time and in accordance with the provisions of title I provide, by formal public proclamation, for such continuance, reduction, o elimination of any existing duty or other import restriction, or such con tinuance of existing duty free or excise treatment as he determines to be re quired or appropriate to carry out such trade agreements. Subsection (a constitutes the basic grant of authorities to the President applicable to al trade agreements, to be exercised in accordance with the specific condition set out in the remainder of the title.

Subsection (b) establishes the general, though not universal, rule that in carrying out any trade agreement under title II, the President may not proclain a rate of duty on any article lower than 50 percent of the rate of duty existing on July 1, 1962. The exceptions to this rule are made in sections 202 (authorit for low-rate articles), 211 (basic authority for EEC), 212 (agricultural com modities), 213 (tropical agricultural and forestry commodities), and 24 (rounding authority). The 50-percent limitation applies equally to article subject to an ad valorem rate, a specific rate, or a compound rate of duty. Section 202. Authority for low-rate articles

This section provides a special authority in the case of any article subject to a rate of duty existing on July 1, 1962, which is not more than 5 percent að valorem or an ad valorem equivalent of not more than 5 percent. (Sec. 246(d) provides a method for converting specific and compound rates to ad valorem equivalents.) In the case of such an article, the President may proclaim the elimination of any duty in carrying out a trade agreement under title II. It is believed that normally rates of duty of 5 percent or less have little or no economic significance, and that these may appropriately be subject to elimination as a matter of convenience of administration.

CHAPTER 2-SPECIAL AUTHORITY FOR EUROPEAN ECONOMIC COMMUNITY

Section 211. Basic authority

This section provides that the President may, in certain circumstances and with regard to certain articles, exercise the authority in section 201 (a) without any limitation, so that, for instance, he may make any reduction in or elimination of applicable import restrictions. This authority applies only to trade agree ments with the EEC, as defined in sections 246 (a) and (b). In addition, the authority applies only to articles falling within a category, which is specially defined and is the subject of Presidential determination. In particular, it must be a category with respect to which the President determines that the United States and the EEC together account for 80 percent or more of the aggregated world export value, in some appropriate period, of all the articles within such

category. That is, if the category by definition contains 10 articles, and the world export value of the 10 articles taken together amounts to $1 billion, the United States and the EEC must export at least $800 million worth of such articles.

Subsection (b) makes clear that the determination required under subsection (a) to permit the issuance of a proclamation thereunder is not contemporaneous with that proclamation, but is one which the President would make prior to entering into the trade agreement. That is, the President would determine the eligible categories in preparation for, and as the basis of, a negotiation with the EEC. Such a determination would be the basis for entering into the trade agreement with the EEC, and would remain valid for purposes of permitting the issuance of a proclamation under this section.

Subsection (c) contains three definitions necessary to the making of a determination of an eligible category under subsection (a). These definitions are peculiar only to this section and do not have general application. In addition, they are all keyed to a single critical date, i.e., the date of the President's request for advice from the Tariff Commission under subsection (d).

Paragraph (1) provides that the "European Economic Community" means the Community, as defined in section 246(a), as of the date of the request for advice. Accordingly, if the President, in preparation for negotiations with the EEC, requests such advice July 1, 1963, the Community would consist of the countries committed on that date to the achievement of a common external tariff through that instrumentality.

Paragraph (2) provides that the determination of "world export value" of all the articles within a category shall be made on the basis of a representative period which shall begin no earlier than January 1, 1957, and end no later than the date of request. Paragraph (2) also provides that the determination of "world export value" shall exclude exports from any country of the EEC, as defined in paragraph (1), to another such country, e.g., from France to Italy, and shall exelude exports from any country dominated or controlled by international communism within the representative period to another such country, e.g., from Czechoslovakia to the Soviet Union. Exports between the free world and the Sino-Soviet bloc would, however, be excluded in the computation of world export value. In general, world export value is the value of all goods of the given category which move in international trade, with the exclusion of the trade noted above. The determination of what countries and areas are within the Communist exclusion would be determined by the President and would be identical to his findings under section 231 (products of Communist countries).

Paragraph (3) defines a category as any three-digit group of the standard international trade classification (SITC) in the edition current on the date of the request. The SITC is prepared and published by the United Nations and is intended to promote greater international comparability of world trade statistics kept by different countries. The SITC has been adopted by at least 50 countries as their national trade classification. In addition, a considerable number of countries, including the United States and the members of the EEC, prepare compilations of their trade data according to the SITC for publication by regional and international agencies. The SITC has recently been revised to afford a direct correspondence between its classification and that of the Brussels tariff nomenclature, which is used by the EEC countries. The classification of the SITC, revised, is made up of one-digit sections, two-digit divisions, three-digit groups, four-digit subgroups, and five-digit items. For example, section 7 is machinery and transport machinery; division 71, machinery, other than electric; group 711 power-generating machinery, other than electric; subgroup 711.4 aircraft engines; and item 711.4 (2) jet and gas turbines for aircraft. Thus, in this example, group 711, power-generating machinery, other than electric, would constitute a category under the definition provided by paragraph (3). It is believed that reference to the SITC will provide a common terminology between the United States and the EEC for negotiating purposes. For such purposes as the issuance of Presidential proclamations after negotiations with the EEC, the SITC groups will have to be broken down into articles classified in U.S. tariff terminology.

Subsection (d) provides that in making a determination as to any category, the President shall request the advice of the Tariff Commission as to the articles falling within the category, the representative period for computation with respect to such category, and the world export value of such articles within the representative period.

Section 212. Agricultural commodities

This section provides that the President may, in carrying out any trade agreement with the EEC under title II, exercise the authority in section 201(a) as to any agricultural commodity or product thereof, whether primary or not, without any limitation, so that for instance he may make any reduction in, or elimination of, applicable import restrictions. However, the use of this authority is conditioned upon the President's determination that the agreement involved will tend to assure the maintenance or expansion of U.S. exports of the like agricultural commodity or product thereof. In other words, the approach will be by a common list, and the President may issue proclamations only as to those articles on which the EEC has agreed to take actions which will assure the maintenance or expansion of U.S. exports of like articles. The first clause of this section is intended to make clear that agricultural commodities and products thereof may come under other applicable authorities in title II, such as sections 201 (a) and (b) (authority for all trade agreements) and section 211 (basic authority for EEC).

Section 213. Tropical agricultural and forestry commodities

Subsection (a) provides that the President may, in carrying out a trade agreement under title II, proclaim the reduction or elimination of any existing duty or other import restriction on any tropical agricultural or forestry commodity or primary product thereof without regard to the 50-percent limitation in section 201 (b). However, the use of this authority is conditioned upon two Presidential determinations. First, the President must determine that the EEC has undertaken commitments to make comparable reductions or eliminations in duties or other import restrictions with respect to the like product substantially without differential treatment. For example, before the President may proclaim general duty-free treatment for a commodity of special interest to a Latin American country, the EEC must have made substantially similar commitments for the like commodity whether imported from Africa, Latin America, or any other area. Second, the President must find that the commodity or primary product is not produced in significant quantities in the United States. The first clause of this subsection is intended to make clear that tropical agricultural and forestry commodities and primary products thereof may come under other applicable authorities in title II, such as sections 201 (a) and (b) (authority for all trade agreements) and section 211 (basic authority for EEC).

Subsection (b) provides that for the purpose of this section a "tropical commodity" has a geographic definition and is a commodity with respect to which the President determines that the principal world output is in the area of the world between 20° north and 20° south latitude.

CHAPTER 3-PREREQUISITES TO NEGOTIATIONS

Section 221. Tariff Commission advice on negotiations

The procedures in this section are adapted from those provided for in section 3(a) of the Trade Agreements Extension Act of 1951, as amended, which authorizes the peril-point procedures.

Subsection (a) provides that before entering into negotiations for any trade agreement under title II, the President shall furnish the Tariff Commission with a list of all articles imported into the United States to be considered for possible modification of duties or other import restrictions, imposition of additional import restrictions, or continuance of existing customs or excise treatment.

Subsection (b) provides that, within 6 months of receipt of the list, the Tariff Commission shall advise the President of its judgment as to the economic effect of reductions or eliminations in duties or other import restrictions on U.S. firms and workers in industries producing like or directly competitive articles. In so advising the President, the Tariff Commission is to take into account the probability of the occurence on a widespread basis in the industry of (1) significant idling of productive facilities of firms, (2) prolonged and persistent inability of firms to operate at a profit, and (3) unemployment or underemployment of workers. The Tariff Commission is, of course, not precluded from taking other relevant factors into account in giving its advice. It is intended that, as under existing peril-point procedures, the reports by the Tariff Commission to the Presi dent under this subsection would not be made public.

Subsection (c) authorizes the Tariff Commission, in the course of preparing its advice, to hold hearings, giving reasonable notice thereof, in order to afford

opportunity for interested persons to be present, to produce evidence, and to be heard.

Subsection (d) prohibits the President from entering into a trade agreement until he receives the advice of the Tariff Commission or until the expiration of the 6-month period, whichever occurs first.

Section 222. Reservation of articles

This section requires the President to reserve from negotiations under title II for the reduction or elimination of any duty or other import restriction, any article as to which there is in effect, at the time of such negotiations, any Presidential action taken under section 232 (safeguarding national security) or its predecessor, section 2(b) of the Trade Agreements Extension Act of 1954, as amended, and under section 351 (extraordinary relief) or its predecessor, the escape clause in section 7 of the Trade Agreements Extension Act of 1951, as amended. In addition, this section authorizes the President to make a similar reservation for any other article he determines to be appropriate, taking into consideration the advice of the Tariff Commission furnished under section 221 (b). Reservation of articles may be accomplished either by a public listing of such articles or by the omission of such articles from a published list. Section 223. Notice

This section is based upon section 4 of the Trade Agreements Act of 1934, as amended. It provides that before entering into negotiations for any trade agreement under title II, the President shall afford an opportunity, after reasonable public notice, for any interested person to present his views, including views on the reservation of any article from the negotiations. As in the case of existing procedure, it is anticipated that any hearings of the Tariff Commission under section 221(e) and presentation of views under this section would take place at the same time.

Section 224. Transmission to Congress

This section provides that, after entering into any trade agreement under title II, the President shall transmit to the Congress a copy of such agreement, stating, in the light of the advice of the Tariff Commission furnished under section 221(b) and of other relevant considerations, his reasons for entering into the agreement. This new procedure will not only permit the Congress to be seasonably informed about each trade agreement, but will also afford an opportunity for a balanced consideration of the reasons justifying the conclusion of the trade agreement.

CHAPTER 4-NATIONAL SECURITY

Section 231. Products of Communist countries

This section is substantially identical to section 5 of the Trade Agreements Extension Act of 1951, as amended. It provides that, as an exception to the most-favored-nation principle, the President shall refrain from applying any reduction or elimination of any duty or other import restriction proclaimed in carrying out any trade agreement under title II or any prior trade agreements act to products of any country or area dominated or controlled by international communism, whether imported directly or indirectly. This section applies to articles which are the growth, manufacture, or produce of the defined country or area. The phrase "dominated or controlled by international communism" is intended to have the same meaning as the comparable phrase in section 5 of the Trade Agreements Extension Act of 1951, as amended, and parallels the language in section 620(b) of the Foreign Assistance Act of 1961, as amended. Accordingly, the use of the more recent phrase leaves unchanged the status of the countries to whom the most-favored-nation principle has been and is currently applied by the President. In addition, under this section, like section 5 of the Trade Agreements Extension Act of 1951, as amended, the President has the implicit discretion of determining in the future whether a given country is or is not dominated or controlled by international communism.

Section 232. Safeguarding national security

This section is substantially identical to section 2 of the Trade Agreements Extension Act of 1954, as amended.

Subsection (a) provides that no action shall be taken by the President under title II if he determines that such action would threaten to impair the national security.