will go to conference, and whatever happens then is, of course, up to the gods. Not being one of those conferees, I am very respectful of the acts that come from the conference, and I realize that there the art of compromise has to be exercised very judiciously.

The trade legislation that was finally developed by the House is the product of 5 months of intensive debate within the Ways and Means Committee, debate not only between witnesses before the committee but by the members of the committee. It took about 31⁄2 months of debate within the committee as we developed this legislation. It was one of the most arduously developed pieces of legislation that I have had the privilege to participate in forming in the 5 years that I have been on the committee, and I was surprised that it passed the committee by a vote of 20 to 5.

It was a surprise, I think, to most of the members of the committee and to the House itself that there was as much unanimity about the bill as we finally developed. The bill passed the House, of course, with only one amendment and by a very substantial margin.

The House-passed bill is a great improvement over the existing law because it provides great flexibility as well as strength to our negotiators. And it sets forth a number of procedural safeguards for the process of developing future attempts to bargain in the international field. Not only is prior consultation required to a greater extent than ever before with industry and with consumers in this country, but also required is a kind of post-bargaining consultation or referral back to the Congress, to the House and to the Senate, of many of the decisions that will be made in this bargaining process.

Also, I think the trade bill takes fuller advantage of the uniqueness of the U.S. system of Government where, as contrasted with the parliamentary system of Government, the Congress is an equal partner in the process of making trade decisions. This can be used to our own advantage.

Now, I think most people, on whatever side they are on this issue. think that this is the time to move forward. There are so many problems facing our country and the world that we cannot afford to sit back and neglect the opportunity or the challenge to move forward on trade negotiations. I am referring to the energy shortage that we have had, the food shortages and other shortfalls that we are having, the worldwide inflation that we are having, and now is absolutely the time that the free nations in this world must work together cooperatively for the solution of our mutual problems.

Far too much attention has been given, in my opinion, in this whole debate to the problem of the most favored nation treatment of the Russian bloc nations and of the Export-Import Bank lending authority for these nations. This bill that you are considering is primarily an attempt to build a pact among the free nations of the world so that these free nations can strengthen themselves and can strengthen the fabric of freedom around the world. That is what this bill is all about. We are trying to strengthen the U.S. economy, the U.S. political system, and the free world economy and political system.

It is unfortunate that title IV was ever combined with this bill. It should not be the stumbling block of this bill. Any trade that we ever

hope to develop with the Russian bloc countries, the nonmarket countries, is going to be minimal. Primarily, we are likely to find ourselves importing from these countries raw products and semifinished products for which we have no other source of supply. I cannot foresee the time when we will ever be importing from them large amounts of consumer items, nor can I foresee a time at which they will be importing from us large amounts of consumer goods.

As I say, it was an unhappy marriage that put these two subject matters together-trade negotiations and our economic relations with the Soviet bloc. This is certainly one piece of legislation where we ought not to stumble over the problem of our relations with the Soviet. bloc, because the whole thrust of this legislation is to help us in the United States and to help the rest of the free world to develop a stronger climate economically and politically-and not to try to solve all of the problems of East-West tension and detente and all of that. I hope that America has recognized I believe it has that we cannot go it alone, that we live in an interdependent world. I try to point all of this out in the many pages of my statement here. I also try to point out why I think that now is the time to start to bargain on solving our trade problems.

As I said at the beginning of my testimony, I realize that today is April fool's day, and I do not come here proposing that everything is well in America and that we are omnipotent in the area of trade. Certainly we have our problems. But the American economy is strong. We have been infected by inflation, but this is a virus that has infected the whole world. And I think it is a virus that we can overcome and are overcoming.

Our economy is strong. We are in a mini-recession now, but I think it is like the bad weather we've been having. It is not going to last all week, all month, or all year. It is eventually going to go away, and the American economy is going to rebound. There are already plenty of signposts that our economy is rebounding strongly.

The energy shortage that has affected us-and no one knows how long it will last, but certainly it has not been nearly as bad as the dire predictions we faced last October and November-has affected us less and will affect us less than all of the other industrial nations of the world, and certainly a great deal less than it is affecting the lesser developed countries of the world.

We have partially solved the international monetary problem amongst the free nations of the world. We have not had a monetary crisis in two years. The dollar is strong. It is relatively stable. It is gaining strength all the time. Those of you who have had the opportunity to travel in other parts of the world know that the dollar is back in demand all over the world. It is as strong as any other currency in the world and is gaining strength daily. We have done what I think, will in the long-run turnout to be a very effective thing, reducing the value of the dollar with regard to its purchasing power overseas. I think this is one of the strong reasons why we are being as successful as we are now in our export trade. Also, we are beginning to tame our appetites for imports because of devaluation.

I think that the overvalued dollar, the long overvalued dollar, was the primary reason that the American businessman went overseas and established plants over there, and that we lost jobs to overseas plants.

Senator, I have heard the bell ring, and I know that my time has expired.

Senator TALMADGE. You in the House are accustomed to being called down on short notice. We in the Senate are not, as a general rule, but in view of the multiplicity of witnesses that wanted to be heard on this, we had to invoke by unanimous consent the limitation of time.

Mr. GIBBONS. I certainly understand your time problems, and I want to close by saying that now is the time to move forward on trade. It has been 12 years since we had a trade bill, but this is a good trade bill, and I know that the Senate will have a great many contributions to make to it.

Thank you, sir.

Senator TALMADGE. I appreciate so much your excellent statement. Are there any questions?

[No response.]

Senator TALMADGE. Thank you very much, Congressman. We are honored to have you with us.

[The prepared statement of Congressman Gibbons follows:]

PREPARED STATEMENT BY HON. SAM M. GIBBONS, A U.S. REPRESENTATIVE IN CONGRESS FROM THE STATE OF FLORIDA

SUMMARY

I. Now is the time to move forward on trade

A. It is important to maintain the momentum toward a new round of trade negotiations by enacting a good trade bill as soon as possible. These negotiations, by further reducing barriers to world trade, will be of great benefit to the United States both economically and politically. They will also help to improve the climate for cooperative multilateral solutions to other world-wide economic problems. The need for such cooperative action has been made even more urgent by developments such as the actions of the OPEC supply cartel, food and energy shortfalls, rampant world inflation, and the danger of resurgent nationalism. Indeed, the world watches to see whether the United States is going to reassume our leadership in this area.

B. The United States has everything to gain from a new round of trade negotiations. Demand for U.S. exports is high and rising. The elimination of barriers to these exports would benefit us greatly. Also, we are dependent on trade for some of the raw materials we need. We can negotiate now from a position of strength. We have a strong economy and a strong dollar. We have been less affected by the four-fold increase in world crude oil prices in the past year than other nations.

II. The Trade Reform Act is a good bill

A. It grants to our able negotiators the strength and flexibility they need to negotiate mutually beneficial trade agreements. Yet it reasserts the power of Congress "to regulate foreign commerce." It provides for a great many procedural safeguards and consultation requirements to insure that U.S. workers. industries, farmers and consumers are helped rather than hurt by trade decisions. It makes relief from unreasonable import competition easier and quicker to get and more generous. It is an improvement both over present law and over the Administration's original proposal.

B. The trade bill is aimed basically at helping the countries of the free world solve their trade problems and strengthen their economies. We should not

lose sight of this fact. Too many people have tied the fate of the bill to the fate of Title IV, relating to our relations with the Soviet Union. While the bill does not change our laws relating to the taxation of income earned abroad by U.S. firms, this is being done elsewhere.

III. It is important for us to move forward in the area of trade

A. Not to do so would be to drift away from the cooperative, multilateral, institutionalized approach to our trade and other economic problems which has worked as well since World War II.

B. Economic relations are at the base of our political relations with other countries. If we do not negotiate to find solutions to these "pocketbook" issues which divide us, we cannot hope to settle our political differences.

STATEMENT

Mr. Chairman and Members of the Committee, I appreciate the opportunity to appear before you today to talk briefly about some of the considerations which I believe are very important as you begin to make decisions on the proposed Trade Reform Act.

I notice that the arguments you've been hearing on trade are pretty much the same ones that we on the Ways and Means Committee heard during our five months of deliberations on the trade bill. It was good to see that at least some of your witnesses praised the House-passed version of the bill as an improvement over the Administration's original proposal. I think this is so, and I sincerely hope that the decisions we made and the language we drafted will be helpful to you and may even shorten the time you have to spend marking up the bill.

As you know, the Ways and Means Committee is not known to be a bunch of free traders, and I can certainly vouch for the accuracy of that reputation. It came as a bit of a suprirse to many people, I think, that the trade bill finally approved by the Committee-by an overwhelming vote of 20 to 5-was as well balanced and as carefully drawn as it was. I have talked to both supporters and opponents of a continued expansion of world trade who feel that the bill we approved was, all things considered, quite a satisfactory one.

It grants to our negotiators the flexibility and strength they need to strike sound and mutually beneficial bargains with our trading partners, but it introduces a great number of procedural safeguards and consultation requirements -far more than were requested by the Administration. By providing for Congressional review and even possible veto of important trade decisions, it also gives real recognition to the Constitutional grant of power to the Congress to "regulate foreign commerce."

The House-passed bill is a real improvement over present law with regard to providing relief from the effects of unreasonable import competition. All forms of import relief are made easier and quicker to get and adjustment assistance is made more generous.

I didn't come here to pat myself on the back for the House-passed trade bill. Indeed, there are a few provisions in the bill that I would like to see deleted, and there are amendments which I fought for in the Committee that are not included in the bill. However, the decisions on all of these matters are now in your hands.

Now is the time to move forward on trade

The reason I asked to be heard by you is this: I believe strongly that a continued expansion of mutually beneficial trade among the nations of the world is very important to this country, both economically and politically. Therefore, the timely enactment of a good trade bill is deserving of our best efforts. In fact, such fairly recent developments as world-wide energy and food shortfalls and galloping inflation have made it even more urgent that we continue to assume world leadership in finding cooperative solutions to world-wide economic problems. The proposed trade bill is an integral part of our efforts in this area.

You are, of course, familiar with the traditional arguments on why trade is so important to us, so I won't dwell long on these. Many of you have seen in your own states just how important export business has become to many of our factories and farms. In an era of resource shortages, imports have also become

important to both consumers and producers. Today, more than 14% of our goods are exported, and about 14% of the goods we consume are imported. Some of our industries, such as the aerospace and agricultural chemical industries export 40-50% or more of their production. Moreover, we are dependent on imports for more than 50% of 6 of the 13 major raw materials needed by our industries.

It's no longer possible for us, or perhaps any nation, to cut off trade and investment flows and say that we will "go it alone." Trade and investment and the operations of the MNC have simply become an integral part of growing economies here and abroad. Our choice is not whether we will "allow these to exist" or not, but whether or not we will harness and regulate these phenomena for our benefit and that of the rest of the world-and whether this country will reassume the leadership role in this area that we assumed at the end of World War II.

Some of those who testified before the Ways and Means Committee painted trade issues in terms of black and white. All of us know that this is no longer possible, if it ever was. To be sure, the issues involved in trade are complex and politically sensitive ones. They cut right across employment problems, foreign policy attitudes, and the vested interests of numberless economic groups-and they cannot be solved easily. If they could, it would not have taken the Ways and Means Committee five months to report out a trade bill. Literally cutting off trade and investment, as some have suggested, would not have taken the Committee long at all. However, it soon became clear that such a step would have been no solution at all. Also, we realized that we could dismiss these issues, or not act on them, only at our peril.

The Ways and Means Committee soon found that some of those who testified on the trade bill simply did not want a trade bill enacted and had no interest whatsoever in working with the Committee to come up with a balanced bill. This was hard to understand, since some of these people would benefit greatly by the approval of a good, balanced trade bill. Nonetheless, these people continued to cling to their simplistic and illusionary proposals to virtually cut off trade and investment even after these had been rejected by large margins in the Committee.

It couldn't be more clear, it seems to me, that this country has everything to gain from approving a sensible trade bill and maintaining the momentum toward a new round of international trade negotiations designed to reduce the barriers to trade.

It's a puzzle to me that some people feel that this country should not enter into trade negotiations. It's not going to be easy to work out mutually beneficial trade agreements. Obviously, each country has to give up something for what it gets in terms of reducing the trade barriers that have been erected, and each trade agreement will affect economic interests in the various countries. However, the demand for U. S. products is great world-wide and it is growing fast. There are a great number of barriers to the entry of U. S. exports into other countries and we have everything to gain by at least undertaking trade negotiations and making a real start toward reducing trade barriers.

The U. S. economy is becoming ever more dependent on trade for continued growth and the reduction of trade barriers is becoming ever more important to us. Something which we sometimes tend to forget-that our businessmen discovered long ago-is that there's a great wide world beyond our borders which offers tremendous outlets for our products, as well as new sources of raw materials for our industries.

Right now, we can negotiate from a position of strength with our trading partners. Our economy is strong. We have been affected by the Arab oil boycott and the four-fold increase in the price of crude oil this last year far less than countries who are more dependent on imported oil for their energy supplies. The floating of national currencies has provided needed flexibility in the international monetary system, and the strength of our dollar in this new scheme of things reflects the strength of our economy.

It's been the fear of some that our trade negotiators would "sell out" certain American interests. This fear is, I think, baseless, and has been made completely irrevlevant by those sections of the House-passed trade bill which require prenegotiation procedural safeguards and continuing close Congressional scrutiny of the negotiations and their results.