could be large shipments to certain of the countries that we do have a great imbalance of trade with?

For instance, we are trying now to do what we can to offset the tremendous petroleum imports. Were those countries affected to any great extent in those shipments?

Mr. O'HARA. I would say there has been a turnaround also in trade with Europe where we were importing more than we were exporting. Of course, we have had a substantial growth in the East. There have been unprecedented shipments to the U.S.S.R. and some of the Eastern European countries.

Senator FANNIN. I realize we have the great problem on tariffs and trade and we hope that those negotiations go forward and that we have greater luck in getting the votes than we have had in the past.

You say the Japanese turnaround has been significant, still, I worry about it as just a temporary pattern because there still doesn't seem to be any change in the Japanese attitude regarding their desire for exporting to our country.

There has been a time when we had some advantages through exchange rates, but that hasn't been lasting and probably won't be. It is your opinion that we can negotiate these differences then? Mr. O'HARA. Yes, sir, it is.

Senator FANNIN. Thank you.

Senator TALMADGE. Senator Dole?

Senator DOLE. Just briefly, as I understand the testimony of both Mr. Burke and Mr. O'Hara, you are not in accord with title IV of the bill passed by the House with reference to discrimination?

Mr. O'HARA. That is correct.

Senator DOLE. I share the view that you express in your statement that it may be a commendable objective, but this may not be the proper way to approach that. I don't know how we can determine internal policies in a trade bill.

I assume if you look around you can find some internal policies in some of the other countries that might not please the majority of the Members of Congress, but in any event, it is there. It poses a threat to the trade bill.

There was some hint in Dr. Kissinger's testimony that it might all go down the drain. It is very important that we come to grips with that problem.

Mr. O'HARA. We certainly agree. I think that Dr. Kissinger's statements were extremely to the point. I know there are some less developed countries which also have emigration restrictions to prevent people who have been educated at government expense from moving out. This is something that really doesn't belong in this bill.

Senator DOLE. I am cosponsor of the Jackson amendment, but I believe it may not be the proper place to solve that problem.

I want to get into the World Food Bank that I want to commend my colleague for, I think. I am not certain what he has in mind. but we have had hearings recently in the Senate Agriculture Committee about food reserves.

It always frightens farmers in America to talk about reserve in anything because they look upon this as a price depressing mecha

nism. Somebody is always trotting it out in Congress-Orville Freeman used to do it frequently. Fortunately it never got passed, but in any event they are concerned about this.

Maybe the World Food Bank can be taken away from here and put in another place

Senator MONDALE. Would you yield?

Senator DOLE. Yes.

Senator MONDALE. I would be against any reserves that didn't have legislative protections against dumping.

Senator DOLE. I agree with that. I have never been able to find anybody to draft such a bill. Sooner or later you have to-I don't know if "dump" is the right word—but you will have to dispose of it and it will have an impact on the market.

I do believe and I share the view expressed by the Senator from Minnesota that we have an obligation not just during times of surplus to unload all of our surpluses in developing countries, but we have an obligation during times of scarcity or at least when we don't have that great surplus.

I think the idea is sound but am not certain how we will get around to doing it. If we look at the history of Public Law 480, which was initiated by, I think, another Senator from Minnesota, Senator Humphrey, and a Senator from Kansas by the name of Andy Schoeppel. We spent several billion dollars on Public Law 480 to help developing countries. Many of those countries felt we were dumping surpluses because it helped foreign market prices.

I share the view that we have that an obligation to help developing countries, but what do you do when it gets to the point of taking it away from this country and supplying it to some other country? How do you make the choice?

Mr. BURKE. I think, Senator, in those years of surplus, that is where the banks will come in. You built the food supplies in those banks so that, hopefully, you will never take it away from the United States when you have a short crop.

Senator DOLE. The objective is commendable. I don't know how it will hold together.

Mr. BURKE. I don't either, but I think the forthcoming conference in Rome would be a very good place to begin.

Senator DOLE. I may go there if I lose. Is it in November?
Mr. BURKE. It is early November.

Senator DOLE. I may go either way.

Senator MONDALE. Is the President going to drop the leaflets for your election?

Senator DOLE. He is going to do a flyover for me.

Senator MONDALE. That may do it.

Mr. Burke, I think we are all terribly concerned on this committee about U.S. jobs. As you know, president Meany of the AFL-CIO and president Abel, of the Steel Workers, strongly urged a concern for U.S. employment and, as Senator Fannin pointed out, Mr. Woodcock, president of the Auto Workers, similarly made a strong plea for recognition that there ought to be adequate concern for U.S. employment.

I think that a poll is a very strong and valid one.

Could you just briefly point out what the impact on employment investment has been from the activity of the Duluth Port, in the Duluth area, just to give one example, where there is employment picked up that way.

Mr. BURKE. About 3 years ago when the U.S. Steel plant in Duluth started to phase out and finally did completely, we lost about 2,800 jobs or 3,000 jobs.

It was just about that time that the port activities started to increase and we picked up quite a few of those people that were laid off at the steel plant.

Now on a day-to-day basis, we have over 2,000 people employed actively in the maritime industry. Last year, as a result of moving the grain cargo, the dollar benefit to the State was about $43 million direct bill and then two and a half times that as the other spinoffapproximately $160 million was the effect that the port had on the State of Minnesota.

So, in answer to your question, Senator, if it weren't for a viable Maritime industry in Duluth, that city would be in very serious trouble.

Senator MONDALE. You say you are employing about 2,000 people at the port?

Mr. BURKE. Maritime related, customhouse brokers, freight forwarders, pilots who bring the ships in and out-you can run down the gamut of anything that has to do with maritime trade.

Senator MONDALE. What about direct employment in shipbuilding or ship repair? Is there any employment there or is there likely to be? Mr. BURKE. Yes, in Duluth, we have Frazier Shipyards, who employ over a thousand people. As a result of the season extension program, for instance, we are able to cut a channel in the harbor to get two of the U.S. Steel ore vessels into their yard during the winter months and that kept 300 or 400 people working through February and March.

Senator MONDALE. When you are talking about the 2,000 employees, you are not including them?"

Mr. BURKE. No.

Senator MONDALE. Would you say the Frazier operation is the result of the Duluth Superior activity?

Mr. BURKE. They are doing quite well, the Frazier people as a result of the rebuilding of the Great Lakes fleet as a result of the Maritime Act of 1970.

Senator MONDALE. Do the amendments we made to the 1970 Act help to build up nontax reserves?

Mr. BURKE. Considerably. It was very beneficial to companies like Frazier who were not doing too well before that.

Senator MONDALE. Senator Fannin?

Senator FANNIN. Thank you, Mr. Chairman. You place great confidence, Mr. Burke, as to what will result if we do have a trade bill. I hope we have a trade bill. I think you are a little optimistic if you

think you will accomplish several of these objectives that you seem to refer to in your last statement where you say:

Finally, having just returned from a European trade mission, it is quite obvious to me that no meaningful negotiations can take place between the United States and any foreign country until such time as we have a congressionally approved trade bill.

That is placing us in a position that if we don't have a trade bill, we are in difficulties. Is that your feeling?

Mr. BURKE. Yes, it is, Senator. Especially if you look at what is happening in the GATT talks, there is just no movement at all. They are waiting for a trade bill.

Senator FANNIN. I don't have your optimism that there will be. Unless we can get some different voting arrangment in GATT. It isn't within our power to pass legislation that would change the voting arrangements in GATT.

Of course, you are aware that we have been negotiating with the EEC relating to compensation for enlargement of the EEC and how is this going to help us as far as that negotiation is concerned?

Here, we have been trying to do something that is basic, but we haven't been successful and it doesn't look very promising.

How would the trade bill change that?

Mr. O'HARA. I would be inclined to think that the trade bill cannot do much for that. That is a rather separate matter.

The purpose of the trade bill as we understand it, is to give U.S. negotiators the opportunity to bargain multilaterally in order to make arrangements on matters such as bringing tariffs down, dismantling nontariff barriers and other such things.

Senator FANNIN. I well understand that. If we cannot negotiate now, how are we going to be able to negotiate on these other matters? I am not disagreeing with you at all regarding the position we are in with EEC with respect to compensation from the community.

It is going to be very difficult for us to go forward to any greater extent than we are today because our negotiations today are very troublesome and certainly not very rewarding.

I think it is necessary for us to apply some standards to a trade bill before we can make the statement that Mr. Burke has given; do you agree?

Mr. BURKE. Perhaps I am too optimistic.

Senator FANNIN. If you would have made that observation with the stipulation that you think it is highly essential for this trade bill, then I think it would be more beneficial to us, more helpful.

What I am trying to arrive at: What do we need in this trade bill that will make it possible for us to accomplish what you are talking about.

You have been discussing these matters with the trading community of Europe. What do you feel is essential to this trade bill that would make that possible?

Could you think about this and give it to us in writing? In other words, there are certain stipulations you want in this trade bill to accomplish the objectives that you see are needed. Could you give us your thoughts?

Mr. BURKE. Yes.

Mr. O'HARA. I'd like to reiterate that we support the bill. We think the bill does give us what is needed in order to have the proper reference for negotiations with these other countries so that we can try to bring down some of their trade barriers. We have made modest suggestions, but on the whole we approve the bill as it was passed by the House.

Senator FANNIN. Do you realize the changes and amendments that have been recommended?

Mr. O'HARA. Yes.

Senator FANNIN. We want to know what you think we should end up with that will accomplish the objectives that you have been talking about.

Mr. O'HARA. Negotiating authority that will give the greatest possible leverage for those representing the U.S. at the GATT bargaining table.

Senator FANNIN. Thank you.

Senator MONDALE. Thank you very much.

Our next panel consists of Thomas N. Stainback, president of World Trade Department, New York Chamber of Commerce and Industry, and Mr. James H. Ingersoll, vice president for World Trade, Chicago Association of Commerce and Industry, also a vice president of Borg-Warner Corporation.

STATEMENT OF THOMAS N. STAINBACK, PRESIDENT, WORLD TRADE DEPARTMENT, NEW YORK CHAMBER OF COMMERCE AND INDUSTRY, ACCOMPANIED BY: CHARLES E. LILIEN, VICE CHAIRMAN OF THE CHAMBER'S WORLD TRADE COMMITTEE AND EXECUTIVE VICE PRESIDENT OF WELLS FARGO BANK INTERNATIONAL AND JAMES H. INGERSOLL, VICE PRESIDENT FOR WORLD TRADE, CHICAGO ASSOCIATION OF COMMERCE AND INDUSTRY, ALSO A VICE PRESIDENT OF BORG-WARNER CORP. AND A. ROBERT ABBOUD, VICE CHAIRMAN OF FIRST CHICAGO CORP., CHAIRMAN, WORLD TRADE POLICY COMMITTEE OF THE CHICAGO ASSOCIATION OF COMMERCE AND INDUSTRY

Statement of Thomas N. Stainback

Mr. STAINBACK. Thank you.

My name is Thomas N. Stainback. I am president of the New York Chamber of Commerce and Industry. I regret the witness list does not indicate that I am accompanied by Mr. Charles E. Lilien, vice chairman of the Chamber's World Trade Committee and executive vice president of Wells Fargo Bank International.

The Chamber that I represent, which is the oldest Chamber in the United States, having been founded in 1768, is composed of over 3,000 member firms broadly representative of the commerce and industry of New York City and this metropolitan area, including finance, banking, import and export trade, insurance, shipping, transportation, construction, and public utilities, and all the ancillary services and