Section 402. Reports

Subsection (a) is based upon section 350 (e) (1) of the Tariff Act of 1930, as amended, and provides that the President shall transmit to the Congress an annual report on trade agreements and adjustment assistance.

Subsection (b) is similar to the second sentence of section 350 (e) (2) of the Tariff Act of 1930, as amended, and provides that the Tariff Commission shall transmit to the Congress an annual report on trade agreements.

Section 403. Tariff Commission

Subsection (a) provides that the Tariff Commission may conduct preliminary investigations, determine the scope and manner of its proceedings, and consolidate proceedings.

Subsection (b) provides that, in performing functions under the act, the Tariff Commission may exercise any powers granted to it under any other act. Subsection (c) is substantially identical to the first sentence of section 350(e) (2) of the Tariff Act of 1930, as amended, and provides that the Tariff Commission shall at all times keep informed concerning the operation and effect of provisions relating to duties or other import restrictions of the United States contained in trade agreements.

Section 404. Finality

Subsection (a) provides that determinations required to be made by the President under title II and actions of the President or any administering agency under title III in determining elegibility to apply for adjustment assistance, in certifying adjustment proposals, or in making determinations with respect to extraordinary relief, shall not be subject to review by any court, though they may be reviewed by an officer. It is believed that such finality provision is appropriate in view of (1) the range and complexity of discretionary judgment involved in such actions and (2) the necessity to insure that the validity of international agreements affecting and generating very large volumes of trade shall not be cast into doubt by litigation which is unlikely to succeed.

Subsection (b) provides that determinations of the administering agency under chapter 2 of title III as to the entitlement of firms to receive adjustment assistance shall not be subject to review by an court or officer. It also provides that determinations of the administering agency or of a State agency as to the entitlement of workers to receive adjustment assistance shall not be subject to review by any court or officer, unless the administering agency provides by regulation for review of State agency determinations by an impartial State administrative tribunal. In this case the decision of such tribunal is final and conclusive and not subject to review by any court or officer.

Section 405. Separability

This is a standard separability provision, designed to insure that the invalidity of one provision of the new act does not render the whole act invalid. Section 406. Authorization of appropriations

This section is a general authorization of appropriations of funds to carry out any part of the new act and also authorizes such funds when appropriated to remain available until expended. It is in addition to the specific authorization in section 316 (revolving fund).

Section 407. Definitions

This section defines a number of terms used throughout the bill, as opposed to definitions applicable only to the specific provisions in which they appear. Paragraph (a) defines "agency" to include any kind of instrumentality of any branch of the U.S. Government. Paragraph (b) defines "duty or other import restriction" in a manner substantially identical to that in section 350 (c)(1) of the Tariff Act of 1930, as amended. Paragraph (c) defines "firm" to include any kind of legal entity, and provides for treating a firm and its predecessor, successor, or affiliate as one firm, where appropriate. Paragraph (d) defines "function" to include any kind of administrative activity. Paragraph (e) makes clear that a group of agricultural, as well as industrial, firms may constitute an industry. Paragraph (f) is intended to suggest a somewhat broader interpretation of "directly competitive with" than has been applied to like words in existing law, by defining the phrase to embrace the competition presented by an article at an

earlier or later stage of processing as well as by a like article in the same stage of processing. Paragraph (g) defines "product" in a manner substantially identical to that in the proviso of section 350(a)(5) of the Tariff Act of 1930, as amended.

THE WHITE HOUSE, Washington, March 9, 1962.

Hon. WILBUR D. MILLS,

Chairman, Committee on Ways and Means,

House of Representatives.

DEAR MR. CHAIRMAN: I am enclosing for the use of the members and staff of the committee a list of executive branch modifications in the text of H.R. 9900, as introduced. A brief explanation is given for each modification.

Because of its significance, I should like to comment upon the amendment to section 211, which relates to the negotiation with the EEC of the reduction or elimination of duties on certain articles. As introduced, the bill provided that the 80-percent formula would be calculated on the basis of the world export value, and this term was defined so as to exclude exports from any country of the EEC to another such country, as well as exports from any Communist country to another such country. As so defined, world export value would have included all trade between the free world and the Sino-Soviet bloc. In fact, however, it was intended that the 80-percent formula be calculated on the basis of the complete exclusion of exports to and from the Sino-Soviet bloc. The basic concept we had in mind was one of free world export value.

I regret that this error was made in drafting the bill, and I wish to bring it to your particular attention because it concerns an important part of the proposed legislation.

Sincerely yours,

HOWARD C. PETERSEN,
Special Assistant to the President.

EXECUTIVE BRANCH MODIFICATIONS IN TEXT OF H.R. 9900 AS INTRODUCED 1. In the second sentence of section 211(c) (2), delete "and shall exclude exports from any country dominated or controlled by international communism within the representative period to another country so dominated or controlled" and substitute therefor "and shall exclude exports to and from any country or area dominated or controlled by international communism within the representative period".

This change corrests a drafting error. It is intended that the 80-percent formula is to be calculated on the basis of the free world export value, excluding only intra-EEC exports. It has not been and is not intended to include a calculation of the value of trade between the free world and the Sino-Soviet bloc. The change is designed to remedy the drafting error and render the provision consistent with the basic concept restricting world export value to the free world. In addition, the words "or area" have been inserted after "country" in order to provide consistency with the language of section 231.

2. In section 213(b), delete “a ‘tropical commodity' is a commodity" and substitute therefor "a "tropical commodity' or a 'primary product thereof' is a commodity or product".

This change is intended to make clear that the geographical limitation on the authority of this section is applicable to the place of processing as well as to the place of growth.

3. In section 222, delete "any duty or import restriction" and substitute therefor "any duty or other import restriction".

This change corrects a typographical error.

4. In section 231, delete "The President shall refrain from applying" and substitute therefor "The President shall as soon as practicable suspend the application of".

With this change, section 231 more closely parallels section 5 of the Trade Agreements Extension Act of 1951, as amended. The purpose of the substituted language, like that in section 5, is to afford the President such time as might be necessary to terminate any international obligation of the United States with which his action under section 231 might conflict. For example, action

under section 5 required the termination of international agreements containing clauses providing for 30 days' to a year's notice before termination could become effective, and a similar situation might well arise under section 231.

5. In section 232(b) (2), delete "as he deems necessary" and substitute therefor "as he determines to be necessary".

This is a technical change to assure consistency of usage of the word "determines".

6. In section 241, insert "or duty-free treatment" after "any duty or other import restriction".

This is a technical change to make clear that the most-favored-nation principle applies to the proclamation of duty-free treatment as well as to the proclamation of any duty or other import restriction.

7. In section 244 (a), delete "if the agreement is not terminated at the end of such period" and substitute therefor "if the agreement is not terminated or withdrawn from at the end of such period".

This is a technical change to provide a consistent parallel reference to termination and withdrawal throughout the subsection.

8. In section 246 (c) (1), delete "to which any particular trade agreement applies" and substitute therefor "to which any particular trade agreement reduction, elimination, or continuance applies".

This is a technical change intended to clarify the ambiguity otherwise existing in the following situation. If in a multilateral trade agreement an article covered by the agreement has been afforded a preferential rate for one or more countries but not for the others, then the existing rate for that article is, in the case of the country or countries receiving the preference, the preferential rate, and in the case of countries not receiving the preference, the nonpreferential rate.

9. In section 246(c)(2), delete "to which the trade agreement applies" and substitute therefor "to which the trade agreement reduction, elimination, or continuance applies".

This technical change parallels that made in section 246 (c) (1) and serves the same purpose.

10. In section 248 (b) (1), delete "section 2 of that Act" and substitute therefor "section 2(a) of that Act".

This change provides a proper citation to the subsection concerned.

11. In the first sentence of section 248 (c)(2), delete "July 30, 1962" and substitute therefor "June 30, 1962".

This change corrects a typographical error.

12. Delete section 221(c), redesignate section 221 (d) as section 221 (c), and amend section 403(b) to read as follows:

"(b) In performing its functions under this Act, the Tariff Commission may exercise any powers granted to it under any other Act, and may hold hearings giving reasonable public notice thereof, to afford opportunity for interested persons to be present, to produce evidence, and to be heard."

The provision authorizing the Tariff Commission to hold hearings is taken out of section 221 and placed among the general provisions at the end of the act, in order to avoid any inference that the Tariff Commission could not hold hearings under any section other than section 221.

13. In section 407 (f), delete "comparable to the of importation" and substitute therefor "comparable to the effect of importation".

This change corrects a typographical error.

The CHAIRMAN. The first week of the public hearings will be devoted to receiving statements and interrogation of the officials of the administration.

Today the committee will hear from the Secretary of Commerce. On subsequent days this week, the committee will receive statements from the Departments of State, Labor, Defense, Interior, Treasury, Agriculture, and the Small Business Administration.

This morning we are pleased to have, as our first witness on this. very important subject, the Honorable Luther Hodges, Secretary of Commerce.

STATEMENT OF HON. LUTHER H. HODGES, SECRETARY OF COMMERCE; ACCOMPANIED BY EDWARD GUDEMAN, UNDER SECRETARY; JACK N. BEHRMAN, ASSISTANT SECRETARY FOR INTERNATIONAL AFFAIRS; AND PETER T. JONES, DEPUTY ASSISTANT SECRETARY OF COMMERCE FOR TRADE POLICY

The CHAIRMAN. Secretary Hodges, you are always welcome before the committee, particularly so this morning to discuss this very important matter with us. You are recognized, sir.

Secretary HODGES. Thank you, Mr. Chairman.

My statement today will be longer than I would wish it to be and longer than I am accustomed to making. As you have indicated, the subject is of such great importance that we must lay it all out before you.

The last time, several years ago, the Secretary of Commerce had exactly the same problem and took the time that we are going to have to take this morning.

Each of you and the audience have a copy of this rather large statement, which statement includes a series of charts, indexed and also the subjects are indexed.

The CHAIRMAN. Mr. Secretary, at this point we will obtain consent for you to include these charts in the record and any of the portions of your statement that you may delete will also be included, if you desire.

Secretary HODGES. Thank you very much.

I hope, Mr. Chairman, that by covering this fully, that I may anticipate some of your questions. But we will be prepared in the afternoon, or whenever you wish, to try to answer your other questions.

I do not feel competent, and I do not believe anyone does, to say that we understand every phase of this most complicated subject, but we will do the very best we can.

I appear before you today, Mr. Chairman, and distinguished members of the Committee on Ways and Means, in support of H.R. 9900, the Trade Expansion Act of 1962.

This bill is one of the most important pieces of legislation to have come before the Congress in the last decade. The bill is, as you know, proposed as a replacement for the Trade Agreements Act which expires on June 30 this year. But the Trade Expansion Act of 1962 is much more than this.

Dramatic changes have come to the world and to our country in the 28 years since the reciprocal trade program was initiated by Cordell Hull in 1934.

The time has come when the United States must completely rethink and redefine its international trade policy. The time has come to write a new and basic charter for the conduct of our international economic affairs, especially our trade. The Trade Expansion Act of 1962 is that charter. This is the perspective in which the act must be considered.

Fundamentally, the Trade Expansion Act proposes an integrated and balanced program looking toward three major objectives. Each of these is vital to the economic and political interest of the United States. Taken together they are of surpassing importance to the Nation.

Strengthen

One objective is to enable the United States, and the rest of the co free world together, to take the initiative to strengthen our economies free

and to counter the all-out trade and aid offensive of the Sino-Soviet bloc which strives to weaken and then destroy the economic ties among countries of the free world.

This Soviet offensive seeks particularly to reduce the newly developing countries to a position of economic dependence upon the Sino-Soviet economy. The act will not only provide us a new initiative in the cold war, the act will also serve to strengthen the overall economic growth and cohesion of the free world, thus contributing directly to its stability, strength, and prosperity.

These topics-the indispensable role of the Trade Expansion Act as an instrument of foreign policy and national security-will be discussed with you in more detail by Acting Secretary of State George Ball when he appears before you.

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Another objective of the act is to stimulate and strengthen our Stig, the own U.S. economy. International trade plays a vital role in our economy today. But we are entering upon an era in which this trade will have a new and unprecendented importance.

Changed conditions in the world economy and in our own economy point to vast new opportunities for increased economic growth through international trade. Markets for the consumption of U.S. goods are mounting with each day as more and more countries, developed and less developed, are moving ahead as the "revolution of rising expectations" spreads throughout the world.

These developments bring with them a higher potential for growth of our national economy-growth that will mean more jobs, more goods, more opportunities for the businessman, for labor, for the farmer, and for the American consumer.

The importance of the Trade Expansion Act to the economic growth of the United States will be my main topic this morning. The other basic objective of the act concerns the rapidly emerging European Economic Community or, as it is often called, European Common Market. The six present members of the Common Market, Germany, France, Italy, Belgium, Netherlands, and Luxembourg, have a population approximating our own and a combined gross national product almost half that of the United States.

They are moving swiftly toward a general pooling of their economic resources and policies. At a rate exceeding the original timetable and the most optimistic predictions, the Common Market is progressing toward the elimination of all its internal tariffs (already reduced by about 40 percent on nonagricultural commodities) and the harmonization of their individual customs tariffs into a common external tariff.