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supplementary submission for the record of our position would suffice if desired.

We do wish to express our concern that the proposed changes in the escape clause will result in a great number of new petitions and possibly uncertainty. And uncertainty is the fear of every planning businessman, whether he is an American producer, a distributor, an importer, a foreign supplier or any other businessman. It appears to us that the Tariff Commission, already in effect, has liberalized the the interpretation of the escape clause and has made it an effective instrument of international trade relief. We are concerned that the substantial changes may bring out abuses, and we hope that the legislative expression in connection with the escape clause changes would note and forestall such abuse.

The Chamber fully endorses the proposed changes in the adjustment assistance provision of existing law. We believe that workers should not suffer due to changing trade practices. They should have prompt, effective, and substantial relief where needed. The Trade Reform Act seems to confer the proper relief.

The Chamber also endorses the provisions concerning extension of the most-favored-nation treatment and generalized preferences for less developed countries, with the note that the extension of these benefits should require some adequate quantification of economic results and commercial effects of these privileges. It appears to us that the trading community should know in some detail the prospective results of such benefits as they are being negotiated or prior to implementation.

Our main point is our wholehearted support of the proposal that industry, labor, and the trade communities should have the fullest possible advisory access to negotiations. Our experience has shown us that the negotiators of our trading partners have had the advantage of very close advise of their constituencies during the negotiations. We believe that our American negotiators must have the same assistance and we believe that the trade bill goes a long way in developing an advisory system. We would urge that this very important aspect of successful negotiations should be emphasized and we hope that full opportunity will exist for all American groups interested in international trade to work with an assist our negotiators.

This concludes my highlighted remarks. May I add our appreciation for the opportunity of appearing before you?

Thank you, Mr. Chairman.

The CHAIRMAN. Thank you very much for your statement, Mr. DeSantis. We will include it in the record. Thank you.

Mr. DESANTIS. Thank you, Mr. Chairman.


OF THE ITALY-AMERICA CHAMBER OF COMMERCE, INC. Mr. Chairman and Members of the Committee: My name is Arthur A. De Santis and I appear before you on behalf of the Italy-America Chamber of Commerce to present our views with respect to the pending Trade Reform Act and to offer such assistance as our Chamber can give you to aid in your deliberations.

The Italr-America Chamber of Commerce. Inc. is a membership corporation established in 1887 and presently chartered under the laws of the State of New York. It is composed of approximately 500 American corporations and businessmen vitually interested in trade relations between the United States and Italy.

Attached to the statement, I am submitting an up-to-date list of the standing committees of the Italy-America Chamber of Commerce and of its chairmen and co-chairmen.

Our Chamber takes pride in its record of assistance to the Congress and to the Administration with respect to a number of trade-policy related issues over the years. The Chamber has appeared before committees of the Senate, the House, and before a number of Administration agencies in matters affecting general trade policy, or such specific issues as crime on the waterfront, importation of cheese, shoes, and other commodities, and in an effort to assist the Congress and our trade negotiators with respect to both tariff and non-tariff barriers. In particular, we take satisfaction from our record of predictions-come-true. Thus, in 1970 when imports of footwear were a matter of great concern, we identified the changing trends in international footwear trade and the impact on L'$ indusOur prediction that Italian performance—which had been remarkable indeedwould be maintained at reasonable import levels, and would not increase to a point where it would be destructive of the very efficient US industry, stands as a mark of the Chamber's objectivity.

The purpose of our appearance before you today is to endorse the basic purposes of H.R. 10710. In particular, we believe that our Government must have the changing trends in international footwear trade and the impact on US industry. Our prediction that Italian performance—which had been remarkable indeed-would be maintained at reasonable import levels, and would not increase to a point where it would be destructive of the very efficient US industry, stands as a and our trading partners around the world.

Since economic policy is becoming a major instrument of international relations and foreign policy we appreciate, of course, that the Congress in giving authority to the President will wish to carefully describe the scope of this authority and the way in which it should be used. This purpose seems to be accomplished by the Trade Reform Act and although individual provisions may yet be changed, we believe, on balance, that the bill provides the necessary tools to move forward from the present position where the United States cannot make any trade agreement commitments. We believe that the opportunity to initiate action on the trade negotiating front is very important to all Americans interested in or affected by international trade, and we believe that the present legislation will be useful in opening up the opportunities for forward movement rather than restricting the United States to residual, retaliatory authority existing under prior trade laws. Further, US authority to take the initiative is most important because it appears that at the present time the initiative lies with other countries and that the United States is not in a position to respond adequately to ideas, threats, or promises, The United States must be in a position to develop advantageous trade relations or to respond properly to undesirable trade policy developments abroad.

Our Chamber agrees, in particular, with the provision of the bill which would provide basic authority for trade agreements including the duty reducing authority which would be given to the President. The harmonization of duty structures and the selective reduction of duties on a negotiated basis would go far to eliminate distortions which now exist in international trade solely on the basis of tariffs. In saying so, we make no judgment as to whether a particular tariff or how much a particular tariff should be reduced. We believe this is a matter which has to be considered on a line-by-line basis with respect to our tariff schedules. The same holds true with respect to the Brussels Tariff Schedules, if our structure is transformed into the Brussels format: A specific level of tariff protection must be a matter of individual consideration of the industry involved so that our trade policy experts in various Government departments and agencies and our negotiators may have the specific and practical advice of the industry.

Similarly, we endorse the authority which the bill would provide the President for negotiating non-tariff barriers. It is much more difficult, however, to make a general statement in this regard, particularly because the scope and burden of individual barriers are largely unknown and very difficult to quantify. It is, we appreciate, very difficult to establish reliable guidelines for negotiation of the deletion of a specific trade barrier as juxtaposed to a deletion of a similar barrier in a foreign country. We can foresee that non-tariff barrier negotiations, if closely restricted to specific commodity fields cannot be too productive because often a quid-pro-quo cannot be found for the removal of a non-tariff barrier in the same field by two, much less more, countries. We would urge, therefore, that the scope of negotiations with regard to non-tariff barriers be drawn broadly, and

we see little harm in so doing since negotiation results on non-tariff barriers must be returned to the Congress for a review procedure. We do have a number of particular concerns regarding non-tariff barriers. For instance, although there are listings of existing barriers with respect to a number of countries in official records, such as the Committee Print of the Ways and Means Committee, and although we in our Chamber have our own views with respect to what is a barrier here or abroad, international traders and the public at large have not been in a position to adequately review all barriers and hence are not in a position to offer suggestions as to proper subjects for negotiation all with respect to a potential quid-pro-quo. It is our understanding that the Secretariat of the General Agreement on Tariffs and Trade is still restricting the availability of its total non-tariff barrier lists to members of participating administrations in the GATT, but not making them available to the public at large. We believe it would be very useful to have it made clear in our legislative process that our Government should be in a position to make all information available to the public and not to be restrained by institutional restrictions which may now exist. Even if our Chamber is in a position to develop profiles and details on an individual trade barrier-and I hasten to add that our Government has been most helpful in informing us on specifics—our individual members or committees are not now in a position to form a comprehensive view as to how their problems may be negotiated, without meeting an excessive research and analysis task. The free availability of all GATT information will go a long way to assist our members, the Chamber, and the trade community at large.

With respect to the so-called safeguard procedures, the Chamber also endorses, generally, the approach taken by H.R. 10710. We do so, notwithstanding specific concerns arising from the proposed changes in several safeguard laws, such as the international anti-dumping act, the countervailing duty statute, fair trade provisions of section 337 and others. With respect to the Antidumping Act, we believe that the statutory enactment, now proposed, of recent regulatory changes which clearly contradict existing court decisions will be most detrimental to investment, to US labor, and to trade relations in general. I refer here to the proposed statutory change which would allow disregard of established valuation practices under the Antidumping law where so-called "exporter's sales price" comparisons are made. The question of what valuation was proper has long been considered settled by a decision of the US Customs court in the Sherwin-Williams case, and in reliance on that decision, major investments have been made. Not only would such investments in the US be avoided if the unfortunate regulation attains the status and force of law, previous investments would likely become the subject of review with potential adverse effects upon US workers in the affected establishment. Moreover, our trading partners might be justified in deploring the loss of international trade stability which must result if judicial precedent in the trade area is abolished without necessity. Our pride in our system of law, and-most importantly for the businessmen-its stability and reliability, will be seriously undermined by this unwarranted change.

However, with the exception of specific problems on antidumping, counter: vailing, and patent enforcement, the Chamber approves the basic safeguard approach with regard to these statutes taken by the Trade Reform Act. We are, moreover, in full concurrence with the proposals for improving existing adjustment assistance for firms and workers affected by distortions arising from international trade.

Our support for the proposed changes in the Escape Clause is more qualified: although our members—having had experience with Escape Clause investigations and their burdensome demands-would agree generally that a workable escape valve is necessary, and that the present Escape Clause might be clarified, we have doubts that the sweeping changes now proposed, which will create a massive burden of new cases, are really required. In particular, the removal of concessioni relation criteria from the law appears to serve only the purpose of introducing additional uncertainty into the appraisal of international trade performance, without guaranteeing the stability of US industries in the US market. We would point out, that the Tariff Commission has already within its powers the opportunity to interpret the application of existing criteria--and has indeed so interpreted them—that it may be unnecessary to make the sweeping changes which are now proposed. However, whatever changes the Congress in its wisdom enacts, we urge here that proper steps be taken to prevent abuse and to develop Escape Clause criteria which will allow American and international businessmen to predict with some certainty whether they may safely promote trade or

if an Escape Clause petition is lodged by an affected US industry, whether it has merit.

This, we would add, would also be our view with respect to other safeguards. The administration of safeguards, unless clearly circumscribed and supervised, can do more harm than good. The most important criterion in our view, to take into consideration in all safeguard areas, is the necessity for the businessman, be it a domestic producer, an importer, a foreign manufacturer, or a multinational corporation, to know within reasonable degrees of certainty and predictibility what the law is and what to expect from the administration of such safeguards.

We have few comments to offer with respect to those provisions of the proposed law dealing with most-favored-nation status or non-market economies. With regard to the trade effects if this title of H.R. 10710 is enacted, we would like to comment that it would appear most important to seek to determine the trade effects in terms of merchandise and in terms of balance of payments if goods from Communist countries are permitted the same access as merchandise from other countries in terms of importation. The most important immediate effect would be, of course, to permit entry of such goods under the duty rates set forth in column 1 of the Tariff Schedules of the United States, rather than the much higher column 2 rates most of which represent the old statutory rates dating back to 1934. We have not seen a great deal of analysis what this would mean in terms of trade and we believe as this is negotiated with nonmarket economy countries that a fair determination would be made on the effect in international trade of this liberalizaton. Another result of mostfavored-nation treatment would be to relieve the trade both in export and import from the restrictions which are now being imposed, be it in terms of limited access for Communist goods much of which has already been liberalized, or be it in terms of liberalization of export controls, because the goods for many nonmarket economy countries are still under relatively tight control under categories S and Z of the Export Commodity Control lists. Again, we believe that a quantification of the trade effects would be most important in order to be able to judge the effect of what we would receive and what we would offer such countries if such status is accorded them.

Concerning Title V dealing with preferences for developing countries, it is our view that since other countries have long made available generalized preferences to developing countries, it is appropriate for the United States to also develop and make available a scheme of preferences which will adequately reflect this country's position taking into consideration particularly the provisions which already exist in this area as they are being afforded by European countries and Japan most notably. In this regard, it is proper to point out that less developed countries or developing countries have been the suppliers of raw materials and we are beginning to experience the need for a great number of raw materials not only energy but for instance certain metals are in relatively short supply in the United States and we would believe it an important consideration to seek to secure a source of supply. On the other hand, we fully understand that developing countries are seeking investment so that they may advance their industries, and these desires can be balanced against our raw material needs. There are appropriate quid proquos which we believe can be very advantageously worked out.

The point we consider most crucial to the entire Trade Reform Act and the negotiations which it would authorize is contained in Chapter 3 of Title I, and in particular in the provisions dealing with industry and public advisory participation in the trade negotiations. We have observed that over many years the negotiators of our trading partners have had the benefit of the closest advice of their industry right during the negotiations and, of course, extensive preparations before then. In some cases, it developed that the negotiators were themselves representatives of the industries involved who were in some way or oth commissioned by their governments to undertake these negotiations. On the other hand, we have followed concepts which have permitted hearings and which have permitted views to be expressed, but which by and large have left the matter of negotiations to a group of experts who often confronted our trading partners without the benefit of industry sitting at their elbows and right behind them in the conference room. We are pleased to see in the Trade Reform Act that the concern of negotiatory advice and participation has been noted, and that the Administration both recognizes the importance and need for such advices, and

that the Ways and Means Committee has placed in the bill provisions which assure that such advice will be available and forthcoming. We hope that it will be made clear by the Senate that if our trading partners enjoy the benefits of industry advice at or near the conference table, our negotiators should have the same privilege. We therefore hope that the provisions of the Trade bill might be strengthened in this regard. Similarly, we would believe it to be most advantangeous, if Congress could be present through a delegation and sufficiently large permanent staff to very closely observe the progress of negotiations. Especially in the non-tariff barrier area, where results are to be presented to the Congress, the full understanding of such agreements to be reviewed would clearly make such indepths observation not only appropriate but highly advisable.

To summarize, the Italy-America Chamber of Commerce supports and urges the enactment of H.R. 10710 and we will gladly assist this committee with further information which you may desire.

Thank you Mr. Chairman and members of the Committee for this opportunity to present our views to you.


Chairman:C. W. Pugh-Alitalia Airlines.
Co-Chair: J. Di Sano-H. W. Robinson, Inc.
Co-Chair: S. Paganucci-Seaboard World Airlines.
Co-Chair: M. Klein—T.W.A.

Chairman: J. Mariani, Jr.-Banfi Products, Inc.
Co-Chair: G. Truffini-Schieffelin & Co.
Co-Chair: D. Sozzi—The Jos. Garneau Co.

Chairman: M. Foah-Ramsey Imports, Ltd.
Co-Chair: F. Landrey-Andre' Prost, Inc.
Co-Chair: J. Ravegno—Buitoni Foods (Perugina).
Dairy Products
Chairman: E. Laraja-Progresso Foods.
Co-Chair: A. Antolini-Antolini Co., Ltd.
Co-Chair: P. Cannizzaro--L. Della Cella Co., Inc.
Meat Products
Chairman : M. Nevy-Galvanoni & Nevy Bros., Inc.
Co-Chair: W. Ajemian-Ambriola Co., Inc.
Vegetable Products
Chairman:P. Surace-Paul Surace.
Co-Chair: A. Landriani—C. Landriani, Inc.

Chairman: F. Durando-Olympic International.
Co-Chair: D. Cavanna-Indesit, Inc.
Co-Chair: R. Boulogne-J. C. Penney Purchasing Corp.

Chairman: A. L. Watson-A. L. Watson & Co.
Co-Chair: F. Waehler-Haines, Lundberg & Waehler.
Co-Chair: F. X. Zietz-Westinghouse Electric Int'l Corp.

Chairman: H. Glick-Marx & Newman Co., Inc.
Co-Chair: W. Luft-Lujan, Inc.
Co-Chair: M. Finkel-S.C.A. International, Inc.
Co-Chair: S. Shir-Benj. Shir, Inc.
Co-Chair: W. Blumenthal-Harwyn International, Inc.

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