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431 Animal and vegetable oils and fats, processed, and waxes of animal or
wood, worked, not elsewhere specified.
iron or steel.
688 Uranium and thorium and their alloys.
Textile and leather machinery.
not elsewhere specified.
Equipment for distributing electricity.
Road vehicles other than motor vehicles.
Ships and boats.
Clothing (except fur clothing).
artificial fur and articles thereof.
Secretary HODGES. The 80-percent formula list will be calculated
When the United Kingdom joins the EEC, as is confidently ex-
Attached as annex C for illustrative purposes only, is a tabulation
Mr. Chairman, I would submit that for the record.
(Annex C referred to follows:)
CATEGORIES IN WHICH THE UNITED STATES AND THE EUROPEAN ECONOMIC COM
MUNITY PLUS FIVE POSSIBLE ADDITIONAL MEMBERS SUPPLIED 80 PERCENT OR MORE OF FREE-WORLD EXPORTS IN 1960
The attached is a tabulation of those commodities groups based on the Standard International Trade Classification, Revised (SITC), of which the value of exports from the United States and six present and five other possible members of the European Economic Community together accounted for 80 percent or more of free-world exports in 1960.
Such a commodity list can only be illustrative at the present time of the kinds of commodity groups which may be included in a finally selected list under the "80 percent dominant supplier formula” in the special European Common Market authority in the Trade Expansion Act of 1962. Under the provisions of the new trade legislation a definitive list of the commodity groups which would be included under the special EEC authority can only be compiled (1) at a future date which approaches the commencement of negotiations, and (2) after data have been assembled for world trade in a representative period, selected from the 5 years previous to the time the list is drawn up, as determined by the President. Such period may include future years for which trade statistics are not yet available. In accordance with the bill's requirements, some commodity groups included in the attached illustrative list for 1960 may not be included in the final list and others may be added, depending upon what the trade figures show for the actual representative period selected.
The list of commodities to be actually offered in negotiation under the special EEC authority, as distinguished from the maximum list of commodities which could be included as described in the preceding paragraphs, would only be put together after public hearings have been held by the President and by the Tarifi Commission, and the Tariff Commission has reported to the President its views concerning the impact on American employment, productive facilities, and profits from anticipated reductions in duties on such commodities. Under the proposed law, items on which escape clause or national security action is in effect must be withheld from negotiation, as must certain other items previously covered by escape clause investigations, as described in the bill. In addition, the President may withhold such other items, where he deems such action to be in the best interests of the Nation and the economy.
List of SITC, Revised, commodity groups of which exports from the United States and the European Economic Community and 5 other possible
EEC member European countries combined, total 80 percent or more of free-world exports in 19601 (Values of U.S. trade with the free world, values of exports to the free world from the EEC and 5 other possible EEC member European countries, and values of their imports from
1 The free-world export value used in these calculations includes total exports of all
Commodity groups are taken from the Standard International Trade Classification,
Secretary HODGES. I wish to emphasize that the list of commodities to be actually offered in negotiation under this special authority may be shorter than the full list of commodities technically eligible for such treatment. The actual negotiating list would be decided upon only after public hearings have been held by an interagency committee and by the Tariff Commission as required by the bill.
Furthermore, the Tariff Commission and the relevant executive branch departments will have reported to the President their views concerning the probable impact on American employment, productive facilities, and profits that might result from the anticipated tariff reductions on such commodities.
Under the act, the President on the basis of such advice may reserve any item from negotiations and in addition is required to reserve certain others.
I will discuss this reserve list in more detail later when I deal with all the safeguards contained in the bill.
This bill follows the practice of past trade legislation in not stipulating the detailed method of negotiation to be followed, since our negotiating team should have the flexibility to choose whatever method is most appropriate at the time negotiations take place.
Thus, for example, the several tariff reducing authorities could be used, as appropriate, to negotiate tariff concessions on a product-byproduct basis, as has been customary in many tariff negotiations up to now.
Useful as this technique has been in the past, however, a broader basis for the negotiation of tariff reductions under these authorities must also be used if substantial further progress is to be made in the lowering of tariff barriers.
In negotiations of any magnitude, item-by-item treatment tends to create long delays and unnecessary complexity. The last round of negotiating under the 1958 extension of the reciprocal trade program was finally completed just this year.
Moreover, the EEC has itself found it necessary to use a broader basis for negotiation in the reduction of its own tariffs, and wherever appropriate under the special and general authorities, we must be ready to work in the same way in order to have the flexibility and bargaining power to achieve our objectives of bringing down free world tariff barriers.
Further, the technique of broadly based negotiations has the advantage of carrying with it a built-in response to changing trade conditions. A striking feature of our modern world is the rapidity of technological developments, which is constantly creating new products, and, from them new trading interests and opportunities.
Our own producers are probably the world's leading innovators. Therefore, it is strongly in our own interest to negotiate on broader groupings of items which would result in tariffs being lowered not only on products in which we now have a strong export interest, but also on products in which we may well develop such an interest in the future through technological innovation.
In recognition of the importance of the EEC area as a market for the exports of American farmers, there is a separate section 212 in the bill dealing with this subject.
Under this section, Mr. Chairman, the President is authorized to exceed the 50-percent limitation on an agricultural commodity, if he