Mr. CURTIS. I hope it can be ready so that it can be publicized. I again call attention to the fact that we have witnesses, as we should I have, from all over the country, dealing in all areas, who ought to have this data available so that they can talk with reason or present their case with reason to this committee.

Incidentally, speaking of the list which I asked for, and which I think you are going to prepare-which I hope will be very exhaustiveof all the acts of trade barriers that have been utilized in the pastSecretary HODGES. Cannot you say are being utilized rather than have been? You are giving us an impossible task, if we go back 15

years.

Mr. CURTIS. Of course I would expect a cutoff. Some of the categories would be unusual. But, for example, human ingenuity is such. that they are always coming up with new ones. For instance, one doesn't get an understanding of the problem of trade with Argentina or the field of meat production unless one relates it to the health laws. It isn't tariffs, it isn't the quantitative restrictions. The problem there is hoof-and-mouth disease. It may be a perfectly legitimate one. But, on the other hand, there is the barrier. I mentioned another example in an entirely different area, that of the extension of credit to customers in certain South American countries, which amounted to a subsidization by the West German Government, if the allegations are correct. So the purpose is to get as complete a list of these kinds. of things as we can have, and also the best we can, to check off those that have been eliminated and to relate the year, say, 1960, if that is a good time to pick, or 1961, in relation to what have been the restrictions before.

Secretary HODGES. All right, sir.

Mr. CURTIS. In that area, too, I think it is quite important that we don't limit ourselves to the barriers that may exist between the United States, for example, and Western European countries. It might be a barrier that they have erected against others-well, take in textiles. The British talk about how they want to get into our textile market, and they complain about our tariffs. Then ask them how much Japanese textiles come into the British Isles, and I think it is still zero. Don't they have an almost complete embargo?

Secretary HODGES. Well, they haven't bought enough.

Mr. CURTIS. They haven't bought any, as near as I can remember. But that becomes important in this picture.

Undue concentration on manufacturing

(The above-mentioned information is on pp. 162 and 489.) The other general line of questioning relates to this: 1 have a feeling that your statement and the publicity of the President's program, including his own statement to the Congress, has an undue concentration on the manufacturing sector of economic enterprise. I think in this trade business we have to look at the full gamut of economic process, from extraction, right on through manufacturing, to warehousing, to mass distribution, to retailing, including servicing, which

also includes, very importantly, the financing and the method of extending credit, as I mentioned earlier. That is why the question Mr. Byrnes directed to you this morning in regard to the tax bill, which this committee just voted out around 1:30 this afternoon, must be considered in relation to this bill. There are 21 sections to this bill, 240 pages, 21 sections to the tax bill, and 12 of those sections alter the incidence of foreign investment or relate to investment abroad or doing business abroad. All of them, I can assure you, are more restrictive on our foreign investments abroad. Therefore, in considering these various trade barriers, and I include subsidies as very important, state trading, cartels, and so on, one must look at the full gamut of economic process. In my judgment, the great thing behind the European Common Market is that they are opening up now to themselves the opportunity for mass production, which is based upon, of course, mass distribution.

Some of the greatest genius in America has been in the area of mass distribution, which includes mass service. That is one of the areas that I think our people can well get into. So, in considering these trade barriers, I hope you will relate them to this full economic process.

One other matter that deals with fairness of international trade relates to the most-favored-nation clause, which I understand you are advocating, and I think probably wisely, that we do continue. But nothing was said about suggesting that the most-favored-nation clause be adopted by the Western European countries and the European Common Market. Would you comment on that?

Secretary HODGES. Yes. They are subject to the same principle that we. They will do it the same way.

Mr. CURTIS. Will they do it in a way that it just is not tariffs but it will actually relate to these other trade barriers?

Secretary HODGES. Well, we are talking tariffs at the moment, sir, and I would say if they substituted something else for the tariffs, they would be certainly out of order and we would be able to correct them.

Mr. CURTIS. How would we? That is the thing that worries me. I am surprised that the administration is not recommending not necessarily the OTC but some sort of machinery for carrying out these agreements. I thought that was the whole reason behind the Organization for Trade Cooperation. What are you going to use for machinery to enforce these agreements?

Secretary HODGES. We would constantly be working with these nations and would see that if they did the thing you are inferring they might do, we would withdraw our own concessions.

Mr. CURTIS. But we are talking about machinery. This bill, in my judgment, is essentially a matter of machinery, establishing procedures whereby the Congress delegates certain authority to the Executive under certain guidelines. So the machinery becomes important, and the administration has suggested no machinery whatsoever, as near as

I can figure, in this bill or in their statements. They simply say that you will try to do this. That is fine. I think we want to get into some of the details of how you are going to do it.

Secretary HODGES. Basically, certainly when you delegate the power to the President, he has the responsibility of setting up the kind of machinery for his own negotiators.

Mr. CURTIS. No, Mr. Secretary. When we delegate authority to the President, we usually do it under certain guidelines. That becomes the area of disagreement frequently, as to what sort of guidelines, if any, we should have. You are not asking us to just delegate blanket authority. You are asking us to insert the guidelines.

Secretary HODGES. We have certain safeguards in there, of course. Mr. CURTIS. That is what we want to talk about. Apparently there are no safeguards here at all. In fact, I would say that in this area you are asking us to delegate complete authority without any guidelines.

Secretary HODGES. No more than we have done under previous reciprocal trade agreements.

Mr. CURTIS. That is one of the troubles. We apparently have not set out the guidelines previously with enough detail so that the previous executives have paid attention to these things, at least in my opinion.

Secretary HODGES. I would say, Mr. Curtis, we have done pretty well, because the President represents the whole country and I think his interests are for the whole country, I think that you depreciate GATT what the GATT group does. You have a GATT ministerial group there which has a lot of influence, moral, and otherwise, to get some of these things done.

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Mr. CURTIS. Mr. Secretary, I am one of the few people, probably_arnce.

not few, but I am certainly not in the majority-who thinks that GATT is a good procedure, and I am quite aware of it. I, for one, felt that the OTC was a logical development. But I don't find this administration any more than my administration coming in forthrightly and saying "We think this is right." In fact, there is no mention of GATT at all. Yet we know that that is the machinery. If it is good machinery, for heaven's sake, let's make it legal and not continue what I regard as sheer hypocrisy, Congress putting on, as we do in this one, saying that anything we do here is not to be considered as approval of GATT, when, as a matter of fact, I do not know how it could be considered otherwise.

So I am willing to discuss the GATT machinery. But I think this enforcement machinery

Congress and this committee needs to get into this kind of machinery to find out what we are delegating to the President.

Mr. Byrnes brought out very appropriately-or perhaps it was Mr. Baker who brought it out-the techniques that have been used that are outside the law, such as the voluntary quota. We did not delegate any authority to the President to do that. If he needs authority, and that

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is the desirable thing to do, I think this Congress, from a constitutional standpoint, as well as to fulfill its responsibilities to the people, must set this up.

I have just been handed a note. Let me ask this: Is the textile quota agreement in violation of GATT?

Secretary HODGES. I wouldn't think so.

Mr. CURTIS. Why not? There is no provision in GATT for quotas. In fact, they abhor them.

Secretary HODGES. GATT, in addition to being representative of many nations, also acts somewhat as a coordinator and umpire of these things. This was done in cooperation with GATT, this textile thing.

Mr. CURTIS. And you did not have to get any permission to do that. We are in violation of GATT now because of section 22 of the Agriculture act.

Secretary HODGES. They gave us permission.

Mr. CURTIS. They gave us permission by saying others could take cracks at us and withdraw. That certainly was not permission that was granted willingly, and it was granted more or less because what else were they going to do. Am I not correct?

Secretary HODGES. I would not want to get into the philosophy. If you get permission, whether it is willingly or not, you can work with it.

Mr. CURTIS. As a matter of fact, Mr. Secretary, let's do not bandy this about. We have been required to report back to GATT each time

STONE CAN meet, saying how we are getting along in getting into compliance

with the noncompliance under section 22, isn't that right? Are we not required each time to explain, and is that not an issue that the United States has to defend itself on at each one of the GATT meetings? Secretary HODGES. Whether it is each one or not, I cannot answer. Mr. CURTIS. You know what I am getting at.

Secretary HODGES. From time to time, yes. In other words, they would rather not have had it, but we needed it.

Mr. CURTIS. You see, I am getting back to my main theme. I am not sure that the people pleading for this are interested in freer trade because when it gets to each one of these issues there hasn't been a firming up of increased trade, but it has been a substitution of what I regard as a much more restrictive trade barrier in lieu of a tariff. The tariff is a very convenient and liberal thing-if you are going to have a trade barrier-which any businessman, any person, no matter how small he is, can read, and adjust for himself. Quotas, licenses, subsidies, all of these other devices, require the businessman to come down and deal with a bureaucracy. You get more and more to government by men and more and more away from government by law which, in my judgment, is almost the definition of restricting and tying up instead of freeing up your marketplace. That is why I come back to this.

Again here we are, the United States, in one hand tying up trade through section 22 of the Agricultural Act, using the quotas we do, in lieu of freeing up, and being in violation of the act.

Secretary HODGES. Mr. Curtis, I think your Congress authorized the President to do what he did.

Mr. CURTIS. I am sure they did. I am in disagreement with my colleagues on a great many things here. There are a lot of pressures on people to try to come in and get subsidies or get quotas or get licenses. We are talking about what the administration is proposing here in the guise of freeing up trade. I am trying to find out whether this really is going to do it or what I have regretfully concluded, that all it is is just a transfer of power to the executive so that more restrictive types of trade regulations can be utilized. That is what I am going to direct my questioning to in the next 6 weeks to find out, to see whether what we are trying to do is that.

One other item: One reason, of course, for the use of trade barriers by the Western European countries and others right after the war was because of the balance-of-payments problem, is that correct?

Secretary HODGES. Yes, sir.

Mr. CURTIS. Now that that has been used for them and we have the balance-of-payments problem, why cannot we use that as an argument so that we can go in and, even before we offer any trade material like the President is asking for here, use that as trade material. Secretary HODGES. We have considered that.

Mr. CURTIS. Is that how we go through with the last agreement just a few weeks ago?

Secretary HODGES. No, not specifically tied in with the Geneva negotiations, sir, but with OECD and other contacts, both in banking and otherwise, with all of these European nations, we have, for the last 2 years or more, been persistently urging them to take some of this load off of us which would improve it.

Mr. CURTIS. I am talking about trade.

Secretary HODGES. No, not in trade, but in the question of balance of payments.

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M. CURTIS. We are talking about trade. I am asking whether or not, inasmuch as these other countries use that in order to compose their barriers to trade, whether we cannot now come in and use that in relation to trade as some of our trading terms. has respondent Secretary HODGES. Mr. Curtis, I do not claim to know too much ice about all these international negotiations from the standpoint of what effect it has on this particular tariff or that, but I think that the pressure that has been brought from a friendly country on a moral basis has had a great deal to do with the European nations doing away with these restrictions. I do not think you can go into them, to answer the question specifically, and say, "Here, we did something for you 10 years ago. We want you now to drop these things as we start working on tariffs."

Mr. CURTIS. They are removing theirs, partly under the pressure of GATT, because they had used in GATT the argument of their balance