Mr. HUNT. Mr. Chairman, I think your bill is very well founded. One of the complaints that has often been made is that the importers have much more opportunity for judicial review than the American industrialist has. Furthermore, I had suggested one time to the Treasury that in the case of Poland, for example, that if they cannot make information available, then we have to forget the old rule of English common law and assume that they are guilty until they can prove otherwise.

Senator FANNIN. Well, that would be consistent with what I was discussing, because if they were not provided the right to import during that period, then I think it would probably get their attention. Thank you, gentlemen.

I could cite other instances of countervailing duty petitions being ignored by the Treasury Department. For this reason I introduced legislation in 1970 to correct this problem, and will seriously consider your recommendations in that respect. And I do not know whether you have had an opportunity to review the legislation that I did introduce, but I would appreciate it if you have that opportunity. If you do not have the legislation available to you, my staff can furnish it and I would like to have your comments, because I would feel that with the expertise that you have in this field it would be very valuable. Under the problems that we have, you have heard discussions earlier under GATT, what is your feeling as to what we face in the future in working with GATT, under GATT, as far as the American industry is concerned?

Mr. HUNT. I happen to be very familiar with GATT, going back to my State Department days, and I think that it was a very good agreement when it was first inaugurated. But I am afraid that the situation in the world today, the economy of the world, has made GATT somewhat obsolete. I heard Senator Long expound on that when Secretary Shultz was here. This business of having to make most favored nation treatment available every time you make an agreement is very difficult. I remember one case dealing with a country in South America where they said, well, we would like to do better with you in respect to this product, but we do not want those fellows over there in Europe to have it. That was about 5 or 6 years ago, and the situation is even

worse now.

Now, of course, there is the escape clause involved in GATT which everybody says, if you have any trouble, why do you not use the escape clause.

One can really bring the escape clause into effect only when it is too late, when there is such a tremendous amount of imports.

Now, in the case of the cast iron soil pipe people, for example, quantity is not so important as bringing it in at subsidized prices or dumping prices. You know, iron pipe is like cement. It is something that you do not move around readily, as you would a calculator-and you can completely disrupt the market in one given area. We have cited this in the case of Poland, which was bringing it in to New York. It was the Northeast, which had its market disrupted just by enough pipe and fittings at dumping prices to completely erode the market. Senator FANNIN. Well, I have been vitally concerned, because I have had so many manufacturers call on me explaining the situation they had been in, and of course this has been going on for so many

years that I realized when GATT was originally formed that we had certain objectives. Those objectives have changed.

We were trying to assist the other nations of the world. We were trying to place them in a competitive position. We were giving, I think, giving out agreements. We were giving out concessions that we would not think of being able to do today. I feel that we must update GATT, and I do not know whether we can. With the voting power that is present in GATT it is very difficult to try to do something about it. I know that when a group of us were in Japan not too many years ago we asked if we could have their assistance in updating GÅTT, and the answer was, we like it as it is. It is very much in our favor.

And of course, they seem to so many of the countries, I am not saying that they were the only ones-but so many of the countries ignore what they want to ignore and turn it aside. And so I am really concerned because, in looking at the future and in writing legislation and depending upon GATT in the formulation of that legislation, it is serious business. And I just wonder what we can do in that relationship. We would certainly appreciate your recommendation and your testimony. You have, no doubt, some very valuable data that can be taken into consideration.

Senator Hansen?

Senator HANSEN. Thank you, Mr. Chairman.

Gentlemen, one of the things that I have observed in the last few years is a decline in the price of scrap. I have gone around on farms and ranches in my State of Wyoming and here are old tractors that have a lot of steel and a lot of cast iron in them, and I do not know what the situation is right now, but about a year ago you could not have them hauled a distance where I live of about 170 miles to Rock Spring, Wyo. The scrap iron market down there was not enough to pay the freight on it.

Has that situation changed any?

Mr. MANGUM. It has changed dramatically, Senator. The materials which we use such as automobile bodies. The distribution of automobile bodies has been a problem in some areas of the country for the reasons which you have just cited. In the summer of 1972 we were paying $28 a ton for automobile bodies that had the motor and the transmission, the power train removed, which had been slightly compressed and cut into three sections. We were paying $28 a ton for that material. The market today in the Southeast for that material is about $75 a ton, and that certainly has created plenty of incentive to bring the automobile bodies in and it has made it economically feasible to haul it for much longer distances.

This brings to mind a particular problem which we have had and which I would like to use as an illustration of why we would urge this committee to be very specific in its time requirements and in spelling out its intent in this legislation. We have seen the Commerce Department simply by failing to make a determination that a substantial American industry was being damaged by the quantity of exports, fail to make the rulings that they should have regarding exports.

We have been caught in our industry, and the total foundry industry, in a classic dilemma where the raw materials that we were using were being exported. The price is being escalated by orders of magnitude, and no action being taken on that front, simply because the ad

ministrative agency involved declined, for their own policy reasons, to carry out what we perceived to be the intent of Congress in that legislation.

We have seen sort of thing being done by Treasury in these countervailing duty cases. With that in mind, sir, we would urge you to spell out your intent specifically so that your intent cannot be subverted by the agency which will administer the legislation.

Senator HANSEN. Let me conclude, Mr. Chairman, by saying that I have no sympathy or understanding at all with bureaucrats who say that they are anticipating the passage of legislation and consequently fail to enforce the law of statutes already on the books.

Senator FANNIN. Thank you, Senator Hansen.

Mr. HUNT. Mr. Chairman, I would just like to say one thing.

Senator FANNIN. Yes, if there are any further comments we would certainly want to have them.

Mr. HUNT. I do have one comment to make on what Senator Hansen just said. I am sorry that Senator Byrd could not stay, because I was very impressed on the first day of these hearings when he pinned down Secretary Shultz on a countervailing duty case that had been waiting only a year. He was speaking for the shoe manufacturers at the time, who had three countervailing duty cases pending, and he kept pinning the Secretary down. I was very glad to note that about a week later the Treasury Department did come out with an announcement on one of those three cases.

Now, I would hope, Mr. Chairman and you also, Senator Hansen, that you two would please try to do something with the Treasury Department to get this India case loose.

Senator FANNIN. Well, gentlemen, I appreciate it very much. We will delve into it and we certainly realize the importance to your industry of trying to solve that problem. It just seems ludicrous for something to go on that long without a decision. And of course, naturally, that is what we are concerned about and that is why I was concerned and introduced legislation to try to eliminate this prolonged delay. And I do not know just what we can do, but we will at least make an attempt. I appreciate it that you have brought it so forcefully to our attention.

Do you have any further comments, gentlemen?

Mr. MANGUM. No, sir.

Senator FANNIN. Again, our thanks to you and the hearings will stand adjourned until 10 o'clock tomorrow morning.

[The prepared statement of Mr. Mangum follows:]

PREPARED STATEMENT OF ROBERT B. MANGUM, PRESIDENT, CAST
IRON SOIL PIPE INSTITUTE

Mr. Chairman, I am most appreciative of the opportunity of speaking to you briefly concerning a problem which seriously affects the industry I represent. I am Robert B. Mangum, president of The Central Foundry Company, which is one of the leading manufacturers of cast iron soil pipe and related fittings. Our principal foundry is in Alabama but we have additional plants in Pennsylvania and New York. I am also president of the Cast Iron Soil Pipe Institute whose members produce more than 95 percent of the industry products. All of us make our cast iron products from used automobile motor blocks and bodies and similar east iron items. Every day we see our only source of iron depleted by the transfer of such "scrap" metal to foreign countries. We are hurt by that, believe me! What really hurts the most, however, is for that metal to come back into our domestic

markets as "dumped" or "subsidized" products at prices with which we cannot compete, because we have an entirely different type of relationship, both by law and by custom, with our skilled American workers than do some nations which have a different ideology and relationship to their workers.

In the past 20 years our industry has been involved in at least five dumping investigations. The last two involved shipments from Poland. Whatever relief, if any, we have obtained has been, to put it bluntly, "too little, too late". We are convinced that the Treasury and the Bureau of Customs both have taken an inordinate and totally unjustified length of time to provide relief, if indeed it is provided at all.

We spent years of effort to obtain a ruling that foreign cast iron pipe and fittings must be marked with the country of origin. Why shouldn't ALL products be so marked so as to prevent commingling of foreign with domestic products with the result that American purchasers are unable to make a choice between domestic and foreign-made products? For years foreign-made cast iron soil pipe and fittings were not marked in this respect simply because the Treasury erroneously included them in an excepted category in which they should not have been included. What reason is there for us to believe that if Treasury is given the discretion it now seeks it will exercise better judgment than it has in the past? We do not believe that it will.

Now, let me tell you of our most recent unhappy experience with Treasury. Since June 23, 1969, four years and nine months ago, we have had pending a petition for the imposition of countervailing duties for cast iron soil pipe and fittings imported from India. No relief is yet in sight although we have furnished positive evidence of subsidization by the government of India. So, you can easily understand our industry's deep concern with respect to Title III of the pending bill.

An article dealing with our petition appeared in the press following testimony before the House Ways and Means Committee in 1973. This article was published in the August 14, 1973 issue of American Metal Market. A copy is attached as Exhibit 1. It gives an objective and fair resume of the events which have transpired since our petition was first filed in 1969. I request that a copy of it be received into the record. I also submit for the record a copy of one of the documents which we presented to Treasury and which makes it abundantly clear that India does, in fact, make a substantial subsidy available to exporters of Indian-made cast iron soil pipe and fittings to the American markets. See Exhibit 2.

When we pursued this matter, Treasury officials stated that a matter of "policy" was involved but they never told us what that policy was. Members of the House Ways and Means Committee inquired as to why the Secretary of the Treasury had not acted but they were not given a meaningful answer either. See Exhibits 3 and 4 attached. Upon pursuing the matter further, top ranking administration officials advisd us that they hoped to gain such wide latitude in discretionary areas under the pending bill that they did not propose to take any action under the law as it now stands.

The law currently provides for the mandatory levy of countervailing duties once the Secretary of the Treasury has announced that the country of origin has provided a subsidy. Unfortunately for us, however, the law does not set any time limit within which Treasury must complete its investigation as to whether or not there was payment of such subsidy. This permits Treasury to avoid the levy by not making the announcement. In our case there is really no need for any substantial investigation-certainly not one of almost five years duration-because Treasury could have confirmed the information which we provided on this subject within a matter of a few days.

We believe that the Executive Branch of the Government is not going to make such findings but, on the contrary, will keep the investigation on the "back burner" until it is granted the discretionary power which it is seeking and that when this is done the discretion will be exercised to the detriment of American manufacturers.

The House, in its consideration of the bill, decided to delete the provision for the exercise of this discretionary power but still permitted a suspension of the countervailing duty requirements for a period of four years during negotiations under the provisions of this bill.

Even so, we are greatly concerned that the Administration will attempt to interpret this suspension as granting it authority to exercise its own discre tion as to whether, if at all, and in what situations, if any, the imposition of

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countervailing duties will be undertaken. That appears to be what it actually is doing now rather than enforcing the mandatory provisions of the law.

Now I would like to speak specifically to several amendments which we believe to be required to protect American industry from what may be a serious curtailment of the protection which Congress obviously intends for it to have. Section 303 (a) (1) provides that "the Secretary of the Treasury shall determine within twelve months after the date on which the question is presented to him, whether any bounty or grant is being paid or bestowed". This section should be amended so as to require the determination to be made within six months instead of twelve. There is no reason why the time element should be so long and there are many why it should be as short as possible to minimize the disruption of the American market.

We are much more deeply concerned, however, with Section 303 (a) (4) which provides that "whenever . . . the Secretary concludes from information presented to him . . . that a formal investigation is warranted he shall forthwith publish notice of the initiation of such investigation in the Federal Register". Please note that there is no time limitation whatever as to when, if ever, the petition must be presented to the Secretary for consideration. Publication as to the initiation of the investigation should be required within some statutory period of time. We suggest that such publication in fairness to all parties, take place within 30 days after an industry files a petition for the levy of a duty. We are driven to the inescapable conclusion that Treasury wants to have complete freedom to take whatever action it wants to, whenever it wants to, or to take no action whatsoever! It must not be permitted to so thwart the will of Congress.

We also believe that Section 321 likewise be amended so as to require publication of notice of the initiation of an investigation within 30 days following the filing of a petition. The Tariff Commission already has a statutory limitation of only three months to investigate and to decide the question of injury in those cases in which the Treasury has found that dumping exists. Business judgments must be made expeditiously. Why can't the Treasury accomplish its task within seven months?

We also believe that Section 321 (b) should be amended by omitting the words "or in more complicated investigations within nine months". I do not know exactly what the term "more complicated investigations" is intended to mean. I suspect that it may be interpreted to mean that the Treasury shou'd be granted a substantially longer period of time to investigate complaints involving exports from Socialist countries. From our experience with dumping cases involving Polish exports, we see no justification whatever for granting this additional period of time. The present law does not differentiate between nations and there should not be any special circumstances (such as unwillingness to furnish information) which can be interpreted as involving “more complicated investigations". The grant of power to substantially extend the period of time for the completion of investigations which are loosely characterized as "more complicated" simply creates a fertile field for granting extensions of time for little or no reason at all. The American businessman has to meet many deadlines in dealing with the Executive Branch. Why should not it be required to meet a few deadlines itself when deciding whether to grant relief or not to do so?

Mr. Chairman, this brings me to one final point. Our experience in the Polish cases has demonstrated the fact that, in dealing with certain nations, no one knows the values of their currencies or their actual production or distribution costs: nor how they compute their sales prices either for domestic consumption or for export. All foreign trade is conducted through state trading companies which are government owned and controlled. As we understand it, Treasury contends that it cannot readily obtain information necessary to properly investigate dumping or subsidy charges. This is a sad commentary. If foreign exporters who send their merchandise to this country for sale in competition with American-made products will not tell the American government whether their products are being "dumped" or being "subsidized", as the case may be. then there is a very simple answer. Their products should be denied entry until they provide such information. We, the American businessmen, realize that we must compete in our own markets with foreign-made products but aren't we entitled to start out on a somewhat equal basis?