markets which the British producers will have to give up because of their inability to supply the products in demand. The de facto devaluation of the French franc appears not as serious as originally anticipated. Although France absorbs 14 per cent of German mechanical engineering exports and supplies 19 per cent of all German imports of machines the competitive advantage of the de facto devaluation of the franc is now expected to be rather marginal and of very brief duration. On the other hand the global efforts to force the development of alternative energy sources, particularly in the United States, are expected to provide additional export opportunities in several sectors of machine construction. Also, West German steel industry does not exclude the possibility that the intensified exploration for oil and accelerated construction of natural gas and oil pipelines could provide a potent export stimulus for its products. For the German chemical industry which with its 1973 exports of some DM26 billion and imports of DM13.5 billion counts among the country's best earners of foreign exchange the situation is less rosy. In 1973 with an export gain of 22 per cent German chemical producers have sold one third of their output abroad. And this high export share is a vital precondition for technologically efficient and economic plant units since the domestic market even at times of boom is too small to absorb the output of optimum size facilities. FEEDSTOCK SHORTAGE The chemical industry has felt already the shortage of petrochemical feedstocks and continued difficulties in procuring required raw materials could impair seriously its ability to meet the foreign demand for its products. Major chemical producers have been forced to cut their deliveries of synthetic fibers and plastics by as much as one fourth of contracted quantities and had to idle some of their plants which could not be run efficiently because of feedstock shortage. The potent increase in prices of oil based chemicals has been so far less of a problem since all major foreign competitors have been equally affected by horrendous increase in the cost of petrochemical feedstocks. The German electrical engineering industry whose growth in the second half of 1973 was almost exclusively generated by export business "will have to rely also in 1974 for a strong showing on the export markets to keep up its overall sales." Whether the anticipated 9 per cent real gain in export business will suffice to provide such stimulus remains to be seen. Certainly Siemens AG., West Germany's biggest electrical engineering concern which closed its business year ending Sept. 30, 1973 with 2 per cent increase in total sales but 12.1 per cent gain in its foreign business, is optimistic about export chances. As of Dec. 31, 1973 Siemens had an order backlog of DM14.5 billion or equivalent to 10 months output capacities. And about half of the orders on books were for export. In the last quarter of 1973 Siemens' foreign orders increased by 9 per cent to DM2.3 billion while domestic orders advanced by only 2 per cent. The plans for accelerated construction of power plants fueled by coal and atomic energy both in Germany and abroad are bound to open new opportunities for German electrical engineering industry. The major victim of the oil crisis, the resulting high gasoline prices, and measures to conserve the oil fuels appear to be the German automobile industry plagued by a steep drop in domestic demand and expectations of declining export businesses in 1974. Last year with 2.35 million vehicles sold abroad or 7 per cent more than in 1972 exports accounted for 59 percent of total German car output of 3.95 million units or 3.5 per cent more than a year before. This year's sales expectations on European markets are estimated with considerable restraint while high hopes are placed on the U.S. business. Those hopes however could be frustrated if the demands of American labor unions for re stricting car imports are met by the administration or if excessive wage demands at home will push the price of German made cars beyond competition with the domestic sub compact models and other foreign imports primarily Japanese. ADJUSTMENT ASSISTANCE One of my major concerns is that the adjustment assistance provisions of the 1962 Trade Expansion Act have not worked well-too little assistance to too few. I also think that adjustment assistance is the wrong approach to trade and the imbalances it causes in our domestic employment structure. Quotas, in my opinion, if applied appropriately would solve the problem before it became a problem. Assistance is just another word for welfare and our working men and women want jobs, not welfare. Given this position, I am also concerned that so few were helped by the provisions of the 1962 act. The proposals in the President's trade bill now before Congress are essentially unchanged from those of 1962. The following is a letter I wrote to Secretary of Labor Brennan asking him just how much assistance had been provided. His reply is also printed along with an article by Dominic Sorrentino which gives figures for the whole fiscal period from 1963 to 1973. This article is reprinted from the Monthly Labor Review, volume 97, January 1974. U.S. SENATE, COMMITTEE ON VETERANS' AFFAIRS, Washington, D.C., March 18, 1974. Hon. PETER J. BRENNAN, Secretary, Department of Labor, DEAR SECRETARY BRENNAN: I understand from the recently published Annual Report of the United States Tariff Commission, that in fiscal year 1973, the Commission voted in the affirmative in eight complete cases and part of three other cases, under Section 301 (c) (2), "worker" investigation of the Trade Expansion Act of 1962. These cases are as follows: (from pages 8-11 of the Annual Report) Tariff Commission Report numbers 510, 511, 512, 519, 533, 545, 553, 561, 562, 575, and 585. According to the Trade Expansion Act, if the Tariff Commission is affirmative, the Secretary of Labor may certify the group of workers involved as eligible for adjustment assistance. My question to you is how many of these eleven cases did you recommend for assistance and what was the extent of this assistance? Did these cases involve individuals or groups of workers? How much will this adjustment assistance cost? There were also eight other cases where the Commission's finding was neither affirmative nor negative (numbers 502, 524, 528, 532, 544, 547, 559, and 588). In all of these cases, even though the Commission was equally divided, the Report makes reference to the fact that the Labor Department certified eligibility to apply for adjustment assistance. Did you recommend assistance in any of these cases? If so, how much? Again, were individuals or groups involved? Your prompt attention to this request would be greatly appreciated. Should there be any questions, please contact Craig Hudson of my staff at 225-4814. Sincerely, VANCE HARTKE, U.S. DEPARTMENT OF LABOR, Hon VANCE HARTKE, DEAR SENATOR HARTKE: In your letter of March 13, 1974, you referred to eleven trade adjustment assistance worker cases under the Trade Expansion Act of 1962 in which the Tariff Commission's findings were affirmative in whole or in part, and eight cases in which the Commission's findings were neither affirmative nor negative. You asked, pursuant to those findings, in how many cases did the Department of Labor recommend assistance, what was the extent of the assistance, were individuals or groups of workers involved, and how much will the assistance cost. The types of assistance available to workers under the Act include weekly trade readjustment allowances training programs; testing, counseling and job placement services; and relocation allowances. Trade adjustment assistance worker cases normally begin as a consequence of a petition filed by or on behalf of a group of workers. Pursuant to an affirmative ruling by the Tariff Commission or a Presidential authorization, the Department of Labor may issue a certification which specifies the adversely affected group of workers that may apply for adjustment assistance benefits. Following a Department of Labor certification, members of the group specified in the certification may apply to their local State Employment Security office for individual determinations of eligibility for benefits. The State agencies also deliver trade adjustment assistance benefits to eligible workers. In all of the eleven cases in which the Commission made an affirmative finding of injury in fiscal year 1973, the groups of workers, about 6,300 workers in all, were certified as eligible to apply for adjustment assistance by the Department of Labor. As of January 1, 1974, the cost of providing trade readjustment allowances for qualified workers amounted to $4,247,848 for the eleven cases. In fiscal year 1973, there were nine cases in which the Commission was evenly divided and made no finding as to whether the petitioning groups of workers were injured by increased imports. In all of these cases, after a review by the Interagency Trade Organization, on which the Labor Department is represented, the President, acting under the authority of section 330 (d) (1) of the Tariff Act of 1930, accepted the views of the Commissioners who found in the affirmative as the finding of the Commission and authorized adjustment assistance for the workers. Subsequently, these groups of workers, about 5,000 workers in all, were certified as eligible to apply for adjustment assistance by the Department of Labor. As of January 1, 1974, the cost of providing trade readjustment allowances for qualified workers amounted to $4,745,048 for these nine cases. For both groups of cases discussed above, additional costs totaling about $325,000 to date were incurred for training. Sincerely, PETER J. BRENNAN, [From Monthly Labor Review, January 1974] RESEARCH SUMMARIES TRADE ADJUSTMENT ASSISTANCE TO WORKERS DISPLACED BY IMPORTS, (By Dominic Sorrentino)1 Since 1962, when the Trade Expansion Act established a method for workers whose employment is adversely affected by import competition to seek compensation from the Federal Government, 41,000 workers in 29 States have re 1 Dominic Serrentino is an economist with the Bureau of International Labor Affairs, U.S. Department of Labor. 30-229 0-74-pt. 4- -29 ceived adjustment assistance under the 84 petitions certified during fiscal years 1963-73. (As of December 31, 1973, the U.S. Department of Labor reported a total of 91 petitions certified, authorizing assistance for 43,439 workers.) Virtually all the assistance has been provided since July 1970; before that time no workers were found to be eligible under the act. Outlays have totaled $56.8 million, either paid directly to the affected workers or as reimbursement to the States. Much of the assistance has gone to workers in the leather products, electrical equipment, and textile products industries. Three-fourths of the total expenditures have in the New England, Middle Atlantic, and East North Central States. PROVISIONS OF THE ACT A group of workers, their union, or other authorized representative may file a petition with the U.S. Tariff Commission for a termination of eligibility for adjustment assistance. The act establishes four criteria for workers' eligibility for such assistance: There must be increased imports like or directly competitive with products made by the firm or industry; the increase must result from concessions granted under trade agreements; a significant number or proportion of workers in a firm must be unemployed or underemployed; and the major factor causing unemployment or underemployment must be concession-generated increased imports. If the Commission finds that the group meets the criteria of the act, the Department of Labor may then certify those workers who were displaced by imports and specify the date on which the import-generated unemployment or underemployment began or threatened to begin. A second route to compensation available to workers involves a determination by the Tariff Commission that an entire industry is imperiled or threatened with injury from increased imports generated by concessions granted under trade agreements. The President may then authorize, as part of the relief to the industry, that workers may apply directly to the Secretary of Labor for a determination and certification of eligibility for adjustment assistance. Assistance to workers under the act may include cash adjustment allowances, testing, counseling, training, job placement, and relocation. The cash adjustment allowance is equal to 65 percent of the worker's average weekly wage, but the payment may not exceed 65 percent of the national average weekly wage in manufacturing (currently a payment of about $101). Payments are normally limited to 52 weeks, but workers 60 years of age and older at the time of separation are entitled to 13 additional weeks of compensation, and workers in approved training programs are entitled to 26 more weeks in order to complete their programs. In no case may payments extend beyond 78 weeks. Eligibility rulings, payments, and other adjustment services, are made with Federal funds through the Division of Employment Security in the State where the worker resides. To be eligible, a worker must have been employed at the adversely affected plant for 6 months out of the year prior to layoff and must have been gainfully employed for at least half of the previous 6 years. DIRECT WORKER PETITIONS During fiscal years 1963-73, the U.S. Tariff Commission issued determinations of eligibility for adjustment assistance on 195 petitions filed on behalf of about 86,700 workers. (See table 1.) About half of these workers were ultimately certi fied to receive aid. From October 1962, when the Trade Expansion Act was enacted, through June 1969, only six petitions, filed on behalf of 1,400 workers, were ruled upon by the Commission and none was found to meet the criteria of eligibility set forth in the act. During fiscal years 1970-73, the Commission found 33 petitions filed on behalf of about 18,000 workers had met the criteria of the act: 118 petitions filed on behalf of about 48,000 workers had not; and, in 38 petitions filed on behalf of 19,000 workers, the Commission was evenly divided. In the latter instance. the President may accept either view of the Commissioners. He accepted the view of those voting affirmatively in all 38 cases and authorized that the Secretary of Labor may certify the workers as eligible for adjustment assistance. TABLE 1.-U.S. TARIFF COMMISSION DETERMINATIONS ON WORKER PETITIONS FOR TRADE ADJUSTMENT ASSISTANCE, BY INDUSTRY, YEARS 1963-73 When the Commission is evenly divided and makes no trading, the President under Section 330(d)(1) of the Tariff Act of 1930, as amended, may accept either view of the Commissioners as the findings of the Commission. About three-fourths of all the petitions and two-thirds of the affected workers were concentrated in three industries: leather products, electrical equipment, and textile mill products. Eighty-seven petitions were filed in behalf of 21,900 workers in the leather products industry. Most of these workers were engaged in the production of women's wear. Thirty-three petitions were filed for the 23,000 electrical equipment workers, almost all engaged in the production of consumer electrical products and electrical components. Twenty-five petitions were filed on behalf of about 13,000 textile workers. Nearly half of these petitions were filed for workers making cotton fabrics and related products. INDUSTRY-WORKER PETITIONS During fiscal years 1963-69, the Tariff Commission found none of the 12 petitions filed on behalf of all workers in an industry had met the criteria of import |