member pact could be successful, and the TRA should be altered to take account of that possibility. The nontariff barrier negotiating authority granted in section 102 of the TRA is written in the traditional terminology of multilateral trade negotiations, and the Ways and Means Committee report explicitly states that: "The authority granted in section 102 is not intended to be an additional grant of authority for the President to extend the benefits of trade agreements on less than a nondiscriminatory basis." We believe that the TRA should be "opened up" to provide for a cross-network of bilateral standards negotiations, in addition to the overall negotiation on the general principles themselves.

Upon reflection, it can be seen that the additional bilateral authority suggested would expand the possibilities for meaningful negotiations on standards. A series of discussions, each dealing with one annex to the pact, could simultaneously be conducted in order to obtain the maximum mileage in terms of trade-offs. The United States, for example, could agree to give up its requirements on in-process testing for compressed gas cylinders in return for concessions by Japan on boat safety.

In addition to specific bilateral authorities, it may be useful for the Committee to provide guidance for our trade negotiators in a Committee Report on which NTB's should be given priority in negotiations, and what procedures such NTB agreements should establish.

We recognize that working out a formula for Congressional oversight in the area of negotiation on non-tariff barrier accords is both essential and inordinately difficult. The President must have a mandate to negotiate, and the Congress must have an opportunity to check on the results of its delegation. We believe that the TRA has an adequate oversight process in Title I. The need for an accommodation on Congressional oversight is imperative, due to the fact that the number of NTB's is so vast that it would probably be impossible to frame a delegation with adequate standards in advance.

THE SAFEGUARD SYSTEM: TITLE II OF THE TRADE REFORM ACT

International Marine Expositions, Inc. also supports Title II of the TRA, which deals with relief caused by disruption from sudden surges in foreign imports. We believe that the other side of the coin from liberalization of world trade barriers is the ability to moderate difficult adjustment to foreign imports through a viable "safeguard" system. The pleasure boat industry itself has experienced difficulty in containing the growth in foreign boat imports into the U.S. market. The ratio of foreign imports to apparent consumption in the pleasure boat market in the United States has risen from seven percent in 1968 to nineteen percent in 1972 (based on value). Accordingly, we support a permanent delegation of authority to the President to protect U.S. industries from foreign imports that are a "substantial" cause of "serious" injury or threat thereof. We support the major changes which have been effected in the criteria for import relief in the safeguard system, especially the elimination of the link to prior tariff concessions as the required cause for the increased foreign imports. This change is justified because it is difficult to separate out the reason for an increase in foreign imports. Also, it was never clear whether it was equitable to accumulate very old tariff concessions, or, merely to look at the most recent set of tariff concessions. At present escape clause relief is practically non-existent, largely because of the difficult causation criteriachanges to "open up" the import relief mechanism for U.S. producers should be enacted to ease the adjustment difficulties of import-impacted industries. Economic Factors in the United States-Canadian Boat Market

We recognize that the focus of these hearings is the Trade Reform Act of 1973 and other bills relating thereto. We believe that this may, however, be an appropriate forum to express our views on certain economic factors in the United States-Canadian boat market. Our basic view is that pleasure boats should be granted more favorable treatment by Canada. There are three reasons for our position. First, it is conceptually impossible to distinguish between on-the-road transportation vehicles which have tariff equality under the United States-Canadian Automotive Agreement and off-the-road transportation such as boats. All transportation vehicles should be treated in the same manner. Secondly, equality of tariff treatments by Canada would substantially

improve the U.S. trade balance. Our trade balance with Canada has deteriorated since 1965, due in large part to the United States-Canadian Automotive Products Agreement of 1965. During the period 1954 through 1964, prior to the Agreement, the United States' favorable automotive trade balance with Canada averaged slightly over $400 million per year. Depending on how the trade balance is measured, it would seem that U.S. exports are now approximately in equilibrium with U.S. imports under the accord. Our overall balance of trade deficit with Canada last year was $2.5 billion. We believe that our trade posture with Canada could be improved by equality of tariff treatment in the area of boats. Presently, there is a large deficit in the balance of trade in pleasure boats between the United States and Canada. In 1970, 14 percent of overall U.S. pleasure boat exports went to Canada. In the same year, however, the United States imported 26 percent of its overall boat imports from Canada. In dollar terms the deficit in the balance of trade in pleasure boats with Canada was $5.5 million. The reason for this trade imbalance can be traced largely to the differing tariff structures of the two countries. Our tariff on pleasure boats is only 4 percent ad valorem on boats not over $15,000, and 10 percent ad valorem on boats over $15,000. The Canadian tariff on pleasure boats, regardless of price, is 17.5 percent. By providing equality of tariff treatment between the United States and Canada we would be greatly expanding export opportunities into Canada by U.S. boat manufacturers.

SUMMARY

In summary, International Marine Expositions, Inc. supports the Trade Reform Act of 1973. We believe that Title I can be improved by the addition of bilateral NTB authorities, and hope that the "safeguard" system of Title II for U.S. businesses and workers is adopted in its present form. Moreover, we propose that equality of treatment be sought in the United States-Canadian boat market by adjusting the United States and the Canadian tariffs on pleasure boats to the same levels. We can see no reason to distinguish between pleasure boats and other transportation equipment granted equality of treatment by the United States-Canadian Automotive Products Agreement of 1965. Senator HANSEN. We appreciate your presence here today, and we thank you for the contribution that you have made.

Mr. FISHER. Thank you very much.

Senator HANSEN. The subcommittee will stand in recess until 10 o'clock tomorrow morning.

[Whereupon, at 3:50 p.m., the subcommittee recessed, to reconvene at 10 a.m., Thursday, April 4, 1974.]

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