In recent years the Common Market has been growing at a rate substantially greater than our own. In addition, negotiations are now taking place looking toward membership of the United Kingdom in the Common Market; and several other countries of Western Europe have applied for membership or association with the Common Market. The likelihood is that within a very few years there will be in operation behind the common external tariff wall of the Common Market, an integrated economy comprising up to 300 million people, with a productive capacity second only to that of the United States. This enlarged, booming Common Market will create an opportunity of wholly new dimensions for U.S. exports, already amounting to nearly $7 billion per year to Western Europe as a whole. We need we must have a trade policy that will assure us access to this booming market, a policy that will advance our common cause of economic growth, strength, and freedom. Acting Secretary Ball will be speaking with you about the political aspects of our relations with the Common Market and of the importance of the Trade Expansion Act from this standpoint. I shall direct my attention more to the economic relations between the Common Market and the United States. Seldom does legislation cover so wide a field of vital national concern, or anticipate so well our needs, as does the Trade Expansion Act. The President in his trade message to Congress accurately stressed: Enactment of this measure will benefit substantially every State of the Union, every segment of the American economy, and every basic objective of our domestic economy and foreign policy. OUR STAKE IN WORLD TRADE International trade plays an essential part in the economic life of the United States. We sometimes forget that our country is the greatest trading nation in the world today. We sell more goods on the world market than any other nation, and we prosper because of it. We are also the world's largest single buyer of goods in international trade, and again we prosper because of it. The living standards of our people are the highest in the world. This is due in no small measure to our exports and our imports. EXPORTS Let us look first at the role our exports now play in providing jobs and income to workers, businessmen, and farmers, and in stimulating the overall growth of our economy. This first chart shows that we came, from 1939, a $42 billion production, to $237 billion in 1961, and that we kept up on an average of about 8.5 percent of our total production in our sales abroad of transportable goods. (Chart No. 1 referred to follows:) Movable Goods Production and Exports as a per cent of Movable Goods Production, 1939, 1950-1961 1939 1950 1951 1952 1953 1954 1955 1956 1957 1958 1959 1960 1961 Industrial and Agricultural Production Secretary HODGES. As a businessman, I would say that the loss of a customer accounting for 8.5 percent, or one-twelfth of sales, would be for many companies the difference between operating at a profit and operating at a loss. The importance of exports to our economy can be shown still another way. In 1961, the value of goods we marketed abroad was $20 billion. That is a lot of money. It is larger than all sales of primary iron and steel producers in the United States; larger than all consumer purchases of furniture and household equipment; larger than all consumer purchases of automobiles, parts, and accessories. For comparison, consider the economic consequences if for 1 year this country produced no new automobiles. Not only would the workers directly engaged in producing cars and parts be out of work; those distributing and selling new cars would be severely hit; and countless numbers of stores, workers, clerks, businessmen, and farmers would be indirectly but adversely affected by the disappearance of this important source of purchasing power. Similarly, if for 1 year this country stopped producing the $20 billion worth of goods it sells in the foreign market, the impact on Americans also would be serious indeed and would weaken our whole economy. Conversely, as we increase our exports from the present level, we give greater strength to our economy. Foreign sales are even more important to particular industries and producers than they are to the economy as a whole. For example, 51 percent of the railroad locomotives produced in the United States in 1960 were sold abroad. In the same year, 23 percent of the metal-forming machine tools and 14 percent of the trucks produced in this country were sold abroad. Among agricultural products, 49 percent of the wheat grown in the United States in the 1960-61 crop year was exported, as was 57 percent of the rice, 41 percent of the soybeans, and 29 percent of the tobacco. Some other representative illustrations from the same period appear in the following table: Industrial products: Carbon black_. Construction and mining machinery Lubricating oils___. Oilfield machinery. Dried peas- Tallow_-. Percent of production exported 35 31 25 31 49 58 30 38 Our sales on the world market account for a large and important segment of national employment. The Department of Labor has recently published estimates that our exports in 1960 supported 3.1 million domestic jobs for people directly engaged in production, transport, and marketing these goods. Secretary of Labor Arthur Goldberg will go into much further detail on the important matter of the employment effects of our trade when he appears before you. I would like to mention, however, that in considering the effect of exports on employment, we should also look at wages in exporting industries. It is a common fallacy to believe that exports come mainly from low-wage industries. Actually, as chart 2 shows, our principal export industries pay higher than average wages. The average paid in all industries is $2.26 an hour exporting $17 billion worth of goods. Above that average of $2.26, we export $10 billion out of the $17 billion. In fact, three-quarters of our total exports in 1960 were from industries which had hourly wages above the average for all manufacturing in the United States. The competitive position of these industries is based on advanced design of product, advanced technology, high productivity, modern and efficient distribution methods, and so forth. (Chart No. 2 referred to follows:) CHART 2 U.S. EXPORT INDUSTRIES PAY HIGHER THAN AVERAGE WAGES Average Hourly Earnings in Dollars-1960 X Ports from his wage Secretary HODGES. It is important to recall that the stimulus of exports is spread very widely through our economy. Every State and a great many local communities share directly in the benefits of exports. Chart 3 coming from the Bureau of the Census shows it on a per capita basis by State. Chart 3 illustrates this, using information recently developed for 1960 by our Bureau of the Census. This information is very revealing. It demonstrates the widespread importance of our export sales to our various States and regions. |