textile industry that the chairman alluded to, who are unionized in Japan than in the United States, for instance. Senator DOUGLAS. What is the average hourly wage in textiles! Mr. MASAOKA. I believe the average hourly wage in Japan would run somewhat above the chairman's 28 cents. You see in Japan, the export industries, and especially in cotton, I understand are among the largest and they would run substantially more than the 28 cents that the chairman alluded to, perhaps around 40 cents, but they would be much lower than ours. I think the thing to remember, however, is that as low as Japanese wages are, they are nevertheless high enough to allow Japan to buy almost a billion dollars worth more per year from us than we are able to sell to Japan. Senator DOUGLAS. The biggest purchase the Japanese make is cotton, is it not? Mr. MASAOKA. Yes. Senator DOUGLAS. Surplus cotton purchased from the United States? Mr. MASAOKA. Surplus cotton purchased from the United States. Senator DOUGLAS. If they are unable to ship textiles to us would they be able to buy cotton? Mr. MASAOKA. The situation has been that Japan bought well over 1,700,00 bales of raw cotton and she sent back 113,000 bales because this is, this 113,000-bale limitation has enabled her to earn enough dollars to buy much of this, only 2 million bales of raw cotton. We think any further restriction on Japan's ability to ship to this country will hurt the ability of Japan to buy this raw cotton, and we think it is important in terms of overall trade to remember that one item may be hurt but other items must be considered. Perhaps the textile industry may claim injury, but what about the American farmer and the American taxpayer who are involved in this problem of surplus American cotton. Senator DOUGLAS. Well, this is, in a peculiar sense a sectional issue, isn't it? The cotton mills are located in the South in the cotton is grown not as exclusively as in the past but predominantly from the South. So that though the Piedmont region might be hurt, the lowland cotton region would be helped, isn't that true? Mr. MASAOKA. It is very true, Senator. I think this is one of the difficult problems that confronts the Congress and the President. How one balances the national interest of one particular interest and that of another. We, of course, believe that the national interest is encouraged by helping Japan remain on the side of free nations and that is the reason for our difficulty today. Senator DOUGLAS. Another point: Suppose we throw further impediments in the way of Japanese importations, will not this strengthen the movement inside Japan to seek a market in Red China! Mr. MASAOKA. This is true. There is one of the great fears which we Japanese-Americans have. Knowing how implacable an enemy Japan was in World War II, we know how great and powerful she can be as an ally of ours. Nevertheless the economic realities are such that the mainland of Red China is very, very near. Before World War II this was a principal market both for raw materials and for an outlet for Japanese manufactured goods. There is very definitely a movement among certain elements in Japan to seek a greater share of the China market, and we believe as you do, Senator, that any impediment on Japanese trade to the United States simply helps our enemies in Japan and elsewhere and not our friends. Senator DOUGLAS. And if you started trade with Red China would not Red China impose as a condition of trade that Japan cease the alliance with the United States, and agree to put her foreign policy in greater conformity with their foreign policy? Mr. MASAOKA. I think you are very great in your analysis. The enemy, the Communist combination uses trade as a weapon in the present cold war, and unfortunately, in a total cold war such as we are engaged in today, Red China will use every device to wean away Japan from the United Nations. If we lose Japan I am afraid we lose a bulwark for our anchor for our Western defenses in the Pacific. Senator DOUGLAS. You referred to the international agreement in Geneva. Could you briefly summarize what that agreement was? Mr. MASAOKA. Last year, under the invitation of the United States issued officially through GATT, some 17 cotton exporting and importing nations gathered in Geneva and adopted a short-term and a longterm international cotton textile agreement. These provide for certain minimums allowing the importing country to impose if they feel that there is market disruption, unilateral ceilings upon the importation of cotton textiles. This, in a sense, has been extended to the multilateral agreement. In the case of Japan, however, in terms of the single year short-term agreement, the United States and Japan have worked out a bilateral agreement. In essence, at least the theory of this is to allow Japan and other countries to slowly expand their cotton textile trade throughout the world. In actual fact, however, we fear this establishes a dangerous precedent whereby the United States and other importer countries may, if they wish, ignore the free trade aspirations and goals and establish international agreements to control trade and international commerce on various articles. Senator DOUGLAS. Is this rate of growth in Japanese textile exports somewhat less than the past rate of growth, economic rate of growth in the free world? Mr. NASAOKA. I didn't understand your question, Senator. Senator DOUGLAS. Well, you say Japan was to be allowed to expand slightly its percentage of the non-Japanese market in textiles. Therefore, given a rate of growth, I wanted to ask if this rate of growth was less than the expected or past rate of growth of the present world? Mr. MASAOKA. It would be very much less, a very small percentage. Senator DOUGLAS. So that while Japan would get a larger absolute volume of exports, it would have a smaller proportionate volume of world production, is that right? Mr. MASAOKA. That is correct. Senator DOUGLAS. What about the United States as compared with Europe? Mr. MASAOKA. There is no question that the United States allows greater importation of Japanese cotton textiles than European countries. However, it should be remembered that even with the total of Japanese textile imports into the United States constitutes less than 2 percent of American domestic production and when weighed against the great purchases by Japan of all American export products, this is really as nothing. Senator DOUGLAS. Thank you. Senator SMATHERS. Do we have in the record a list of all of the countries that export textiles into the United States and the amount of that, Mr. Chairman? Do we have it in the record? Why don't we get that for the record, to be published in line with the testimony of what countries we allow to import textiles and the amounts. He says Japan only has 2 percent which is a very revealing figure. The CHAIRMAN. It will be put into the record. (The following was later received for the record:) Cotton cloths (pars. 904 and 905).—U.S. imports for consumption, by countries, 2 Includes 5,936 pounds, 27,662 square yards, valued at $13,497, of average yarn No. 50, dutiable at the reduced rate. 3 Includes Newfoundland and Labrador. 4 Less than 0.05 percent. Source: Compiled from official statistics of the U.S. Department of Commerce. |