cultural exports to the Common Market countries are in serious jeopardy. Certainly those agricultural commodities which the Common Market countries do not themselves produce, such as soya beans, cotton, and so forth, for which the U.S. Government is subsidizing the export and therefore the U.S. taxpayer is not only paying for a high support price but also for an export subsidy, will continue to be shipped to the Common Market countries. But this is not the purpose of our negotiations, and therefore, we would like to draw your attention to the levels of protectionism that will face our poultry products to the Common Market countries, and especially West Germany, as of July 1, 1962, and which will have to be opposed in every possible manner.

If the Common Market regulations regarding the import of poultry products from the United States as issued by the Council of Ministers of the European Economic Community as issued on January 14, 1962, will be permitted to take effect, it will mean that the U.S. exports of poultry products to the Common Market countries will have been sentenced to death.

DEAR SENATOR BYRD: As you may know, Riegel Paper Corp., a major manufacturer of pulp and paper products, owns and operates a plant in Danville, Va. Recently, H.R. 9900 (Trade Expansion Act of 1962) was introduced to Congress, and I would like to express to you the attitude of our corporation on this bill.

As far as pulp exports to the Common Market countries are concerned, they are now entering on a duty-free basis. While tariffs theoretically exist, they are nullified by a system of allocations.

If Sweden, Norway, and Finland enter the Common Market, an external tariff of 6 percent is expected on pulp and as much as an 18-percent tariff is expected on some grades of paper.

Riegel Paper Corp., each year ships many thousands of tons of pulp to Europe against severe price competition from Sweden. At present prices, profits on pulp after paying for freight are very small. If we had also to pay a 6-percent duty, we would be forced to relinquish much of our European market. Such loss of sales would make it necessary for us to shut down certain of our integrated operations periodically for lack of orders.

From our point of view, therefore, it is essential that our Government be able to bargain with the European Common Market to assure that no tariff be imposed on our pulp and that duties on paper should be eliminated or at least substantially reduced. It would certainly be a poor bargain on our part to bargain to reduce our own tariffs in exchange for a reduction in Common Market tariffs of 6 percent to 18 percent which have never been in effect.

We understand that any tariffs reduced as a result of negotiations would be extended automatically to all other "favored nation" countries. We believe that this automatic extension could be damaging to us if such countries were not required to reciprocate.

In summary, we are in favor of granting President Kennedy the authority to bargain with the Common Market for lower tariffs. However, we urge that as far as pulp and paper are concerned, such a bargain be based on our present low or duty-free status, not on a newly effective tariff to be established. Second, we feel that any reduction in American tariffs which is agreed on should be extended to other countries as they themselves recipricate with reduced tariffs on American grades. As you probably know, this position which we favor is the same as that adopted by the American Paper & Pulp Association at their annual meeting in New York in February of this year.

Very truly yours,

J. HANES LASSITER, Vice President.

STATEMENT OF STEPHEN F. DUNN, PRESIDENT, ON BEHALF OF THE NATIONAL COAL ASSOCIATION, REGARDING H.R. 11970, THE TRADE EXPANSION ACT OF 1962

My name is Stephen F. Dunn. I am president of the National Coal Associa tion which maintains headquarters in the Coal Building, 1130 17th Street NW, Washington, D.C. This statement is made on behalf of the association.

National Coal Association is the only national trade association representing the commercial producers and marketers of bituminous coal in the United States Bituminous coal is a most important factor in our economic development and in the national defense and security of our Nation. Bituminous coal is the basic source of energy in the United States today.

The coal industry is sympathetic to the underlying principles which form the basis for trade expansion legislation. It is our hope that proper steps will be taken to strengthen the commercial position of the United States in the world economic picture. We also hope that the entire domestic fuels industry, and in particular the coal industry, will have opportunity to partake in any improvement in our economy.

Improvement in the coal industry is absolutely essential to our continued economic welfare. It is not necessary to elaborate on the fact that the areas in which coal is the predominant industrial activity are among the most depressed in our Nation. The situation peculiar to the coal industry and the coal communities has been recognized both by the Congress and the administration and we look forward to development of a national policy which will hasten improve ment in our industry. Because of comparable depressed economic conditions in the domestic petroleum industry, it is our contention that special consideration must be given to domestic energy sources in the construction of any long-range trade policy. Because energy is so important to our overall industrial expension, special legislative consideration must be given to the domestic fuels industries in developing any trade enactments designed to expand industrial opportunities. Unlike manufactured goods, fuel resources are not mobile. Resources, particularly energy resources, are locked in nature's storehouse in specific geographical areas and must be produced in that area. There is no possibility

of transferring an industry or in other ways meeting the impact of competition of foreign imports. Likewise, energy resources are not renewable and therefore must be utilized efficiently.

Governmental efforts to encourage and develop strong, viable domestic fuels industries are not in conflict with the cooperative foreign trade policy that is the goal of the administration in the current legislative effort. Special interest and consideration has been given by our Government experts on foreign trade to the situation which is developing in the European Economic Community. Protection of domestic industry is one of the tenets of the philosophy of the Common Market. As a matter of fact, a recent article in the Financial Times intimates that one of the more difficult items in the negotiations between Community representatives and those of Britain, as to Britain's entry into the Commurit, has been on the subject of a common energy policy. Within the Community itself, there are some members who contend that the Community's energy costs must be held down to a very minimum, whereas other member countries agree that the interests of their mining industries and the workers therein must receive special consideration.

As an example, Mr. Jean Couture, chairman of the West European Coal Producers Association, in an address before the National Coal Association convention in Pittsburgh on June 19, 1962, speaking on the subject of European imports of American coal, pointed out that a certain portion of Europe's needs would. of necessity, be covered by imports. He then said: "The only problem is to keep imports within such limits as not to endanger the very existence of basic home resources, which, we firmly believe, will be required in the future to meet the essential needs of our Community." The situation referred to by Mr. Conture is duplicated in the conditions that exist in the domestic fuels industries of the United States because of the increasing volume of foreign petroleum imports which are causing degradation of the coal and petroleum industries of this country. Much of the economic crisis that exists in the coal and related industries today can be traced to the increasing volume of residual oil imports from foreign sources.

Despite the fact that it is agreed that domestic energy sources are capable of supplying the demands of our economy in times of emergency, as well as under normal conditions, an ever-increasing larger share of the energy market has been taken over by foreign fuel imports. This situation has been recognized

within the last several days by one of the esteemed members of the Senate Finance Committee, Senator Robert Kerr, of Oklahoma, who indicated in a press conference that it was his aim to obtain, either by legislative enactment or by Executive edict, some positive control over the volume of permitted imports in order that domestic producers may be guaranteed a reasonable share of the existing, as well as future energy markets.

Some concept of the seriousness of the situation so far as the coal industry is concerned may be drawn from a brief statistical review. In 1948, there were imported into the eastern territories of the United States 53 million barrels of residual fuel oil. This represented 26 percent of the total residual fuel oil consumed in this area. Twelve years later, in 1960, there were consumed 213 million barrels of imported residual fuel oil, representing 65 percent of all the residual fuel oil used in that territory. During the same period, consumption of coal in this specific market area declined from 201 million tons in 1947 to 140 million tons in 1960.

Since 1959, by virtue of a Presidential Executive order, there has been in effect a mandatory oil import control program. Originally, it was intended that this control program should provide limitations as to the amount of imported oil that might be brought into this country. However, because of administrative action, effectiveness of this program has been in question. As a matter of fact, on the theory that domestic demand required additional supplies, the governmental department responsible for the oil import control program in April of 1962 authorized an overall increase of 10 percent in permissible residual oil imports into the United States. These added supplies of foreign oil, topping an already existing market surplus, resulted in a serious demoralization of the fuel and energy markets in eastern territory. The situation became so acute that fuel oil distributors, in order to dispose of mounting surpluses, sought customers far afield from what had been considered the conventional markets for imported residual oil. In some instances, residual oil is being distributed far inland, and in many cases the oil distribution has been so expanded that sales offices of competing fuel companies have been closed, because of the inability to meet the competition provided by the distressed pricing program inaugurated by the residual oil importers in order to move their surplus supplies.

A very significant reference to this contention, both as to excess supplies and to pricing policies, was contained in the July 27, 1962, issue of The Petroleum Situation, published by the Chase Manhattan Bank of New York. In contradiction to the contentions of those who are seeking unlimited imports of foreign oil, the bank statement states, in reference to the current market conditions for fuel oil:

"But the heavy fuel oil movement was down from last year by 1 percent and was at the lowest second quarter rate since the recession year of 1958." In contrast, the analysis reveals that there was an overall increase in petroleum demand for the period of 3 percent, "all of which represents growth." Continuing the bank's petroleum statement looking into the future of oil demand says: "Looking ahead, the industry is not likely to experience a percentage gain in the second half of the year nearly as large as that registered during the first 6 months."

The pricing of residual oil by importers and major oil companies, in order to move the increasing volume of permitted imports is the major objection of the coal industry. It has been pointed out repeatedly that residual oil is sold at whatever price is necessary to undersell the competition, then the losses are made up from the price assessed the consuming public for those petroleum products on which the petroleum industry enjoys a more or less "captive market."

To this point, The Petroleum Situation makes specific reference. The author in commenting upon the competitive impact which is being felt in the heavy fuel industry by competition of natural gas in the industrial markets states that this impact "fails most heavily upon fuel oils." The statement continues that these oils "necessarily must be marketed within the competitive framework established by the price of gas." Then, the article makes a most significant statement as to the marketing policies of the oil companies who are meeting this competition. The article states:

"If the industry is to counter declining wellhead prices at the wholesale level, gasoline is the only major product that is a potential source of relief."

Therein is justification from a reliable and unbiased source of the contention long made by coal and other groups that the economic advantages enjoyed by the distressed prices of residual fuel oil in the energy markets, for the purpose

of displacing coal, is being compensated for by higher prices paid by the motorists throughout the United States for their gasoline and lubricating oils. Here we have the situation of the New England area, which is the prime beneficiary of the "below cost" prices on residual oil, being subsidized by the American motoring public. Residual fuel oil is the "invisible and uninvited hitchhiker in the back seat of every American automobile."

The coal industry recommends that as a part of the trade expansion consideration, this Senate committee include an amendment to the so-called national security section to provide, by legislative enactment, a continuing and definite stabilizing formula by which permissible imports of foreign petroleum. including residual oil, will be limited to a representative and reasonable base period level. Thus, essential supplies of imported oils will be available and will supplement rather than supplant the production of the domestic fuels industries. We believe that such a legislative enactment can be written into the present Trade Act without interfering in any way with the basic intent of the act, or without hampering the administration's commendable program of increasing foreign markets for American goods.

STATEMENT OF WILLIAM A. BARLOCKER ON TURKEY EXPORTS TO THE COMMON MARKET SUBCOMMITTEE CONCERNING H.R. 11970, TRADE EXPANSION ACT, AUGUST 1, 1962

Mr. Chairman, I am William A. Barlocker, president of Barlocker Farms. Inc., in St. George, Utah. I am one of the directors of the National Turkey Federation representing Utah and because of this, I wish to make the following statement in support of H.R. 11970.

The European Economic Community, or the Common Market, as it is more commonly called, yesterday put into effect their common agricultural policy which can only be interpreted by the turkey producers of America as restrictive and unfair in trade regulations.

Because I am a leading turkey producer and a businessman who has a definite interest in the advancement of our economy, I feel that some positive action. such as outlined in H.R. 11970, is needed. The exporting of poultry, and more specifically turkeys, has in the last 5 years grown so rapidly that it is one of our major markets. A university recently concluded a study which points to the fact that had there been no exports in 1960, domestic prices of turkeys would have declined more than a half cent per pound. Not only would turkey pro ducers have lost the income from exports, but the decrease in domestic values would have resulted in additional losses to producers, totaling almost $100 million.

The European Economic Community has through its agricultural policy taken advantage of the United States. They will impose unfair duties, variable import fees and levies, and gate prices, directed toward our poultry. The gate price is one below which no turkey from the United States may enter the Common Market countries. The unfairness of these variable levies, gate prices, and duties is illustrated by the fact that although turkey exports have increased severalfold over the last 5 years, turkey production in the Common Market has increased at even a faster rate. By placing such restrictions on U.S. exports the Common Market is attempting to build its production to meet its own demands. We are convinced that it will be uneconomical for the Europeans to attempt self-sufficiency on turkeys since we can mass produce at a considerably lower cost than the cost in Europe today.

It should be pointed out that the turkey industry in the United States is one area of the agricultural picture which is not Government-subsidized nor is it Government-controlled. We produce our product under the law of supply and demand. Turkeys are produced and marketed freely and competitively The U.S. turkey producers are daily demonstrating our willingness and ability to compete in foreign markets if we are given an opportunity to do so.

Due to our advanced techniques and processes, we are able to hatch, grow. process, and ship our turkeys to the border of any European country cheaper than they themselves can produce turkeys for sale in their own country.

We in the United States have always supported the idea of the European Common Community, and we have no wish to undercut or deter their programs for economic growth and stability. I think, however, because of this attempt to stifle trade that some affirmative action on the part of the United States is

indicated. This action I feel will come at least in part by the enactment of H.R. 11970, and specifically section 252, which grants to the President the power to take "all appropriations and feasible steps within his power to eliminate such restrictions and to refrain from negotiating the reduction or elimination of any U.S. import restriction under section "201" and under section 2, point 1, "Whenever a foreign country or instrumentality the products of which received benefits of trade agreement concessions made by the United States, maintains nontariff restrictions including unlimited variable import fees which substantially burden U.S. commerce."

I feel that the President supported this position when he said "Let me emphasize that we mean to see to it that all restrictions and concessions are reciprocal and that the access we gain is not limited by the use of quotas or other restricted devices."

When the President has been given the authority granted to him under section 252, he will then be able to evaluate in what areas the Common Market is most productive and be able to negotiate with a give and take thereby breaking the restrictions of the Common Market and giving us truly free trade.

The Trade Expansion Act of 1962 (H.R. 11970) will be the tool by which such negotiations can take place. It is our feeling that only through this authority, or perhaps even an increase in this authority, will we be able to bring the Common Market to a level where serious negotiations can take place.

TESTIMONY OF JOSEPH ROBY, JR., SECRETARY OF THE WALL PAPER INSTITUTE, ON H.R. 11970

In testifying before the committee in opposition to H.R. 11970, I would like to cover 2 specific areas only.

It is not my intention to dwell upon the higher wage rates in this country which will be threatened by lower wages in other countries.

Nor, is it my intention to argue that increasing imports of manufactured articles from abroad will reduce the volume of similar goods manufactured in this country, and therefore, lower the wage rates and/or profits in this country which are considered necessary to sustain our economy through taxation of these wages and profits.

Nor, is it my intention to ask for reciprocal duties between countries producing the same product, even though this might appear to the average citizen to be only fair and just treatment for both importers and exporters.

Nor, is it my intention to question the advisability of turning over all powers to the President in the matters of foreign trade, heretofore given to Congress by the Constitution.

Nor, would I have any way of knowing the extent of injury which could be caused by the passage of this bill in its present form and which therefore would, in theory, be alleviated through subsidy by means of application of Federal funds in relief payments.

Nor, is it in my province to question the matter of quotas, licensing arrangements, blocked currencies, and other devices used by other countries as a means of restricting U.S. exports when the United States does not employ such tactics (except in the case of agricultural products).

All the above aspects, and more besides, of our foreign trade have been covered by testimony of experts arguing both sides of the question voluminously before House of Representatives and this committee.

I would, however, like to call the committee's attention to two areas of our foreign relations in respect to foreign trade which it seems to the wallpaper manufacturers is extremely important and which I have not seen adequately covered in the testimony that I have read.

First, there appears to be no concern with the fact that if all duties are eliminated, which would appear to be the ultimate intention of this bill, that the U.S. Government would lost $1.1 billion in revenue. This is on the basis of an import volume of $14.3 billion with an average import duty of 7.7 percent for the year 1961. On the basis of dutiable imports represented by $8.7 billion of the total of 14.3, our total import duties represent 12.3 percent. I would, therefore, like to ask this committee how this lost revenue of over $1 billion is to be replaced. It goes without saying that the concerns competing with potentially increased imports as a result of this bill, presumably will show less profits