Agreements Extension Act of 1955 (19 U. S. C., sec. 1352a), is amended to read as follows:

"SEC. 2. (a) No action shall be taken pursuant to section 350 of the Tariff Act of 1930, as amended (19 U. S. C., sec. 1351), to decrease the duty on any article if the President finds that such reduction would threaten to impair the national security.

"(b) Upon request of the head of any Department or Agency, upon application of an interested party, or upon his own motion, the Director of the Office of Defense Mobilization (hereinafter in this section referred to as the 'Director') shall immediately make an appropriate investigation, in the course of which he shall seek information and advice from other appropriate Departments and Agencies, to determine the effects on the national security of imports of the article which is the shbject of such request, application, or motion. If, as a result of such investigation, the Director is of the opinion that the said article is being imported into the United States in such quantities or under such circumstances as to threaten to impair the national security, he shall promptly so advise the President, and, if the President determines that the article is being imported into the United States in such quantities or under such circumstances as to threaten to impair the national security, he shall take such action, and for such time, as he deems necessary to adjust the imports of such article so that such imports will not threaten to impair the national security.

"(c) For the purposes of this section, the Director and the President shall, in the light of the requirements of national security and without excluding other relevant factors, give consideration to domestic production needed for projected national defense requirements, the capacity of domestic industries to meet such requirements, existing and anticipated availabilities of the human resources, products, raw materials, and other supplies and services essential to the national defense, the requirements of growth of such industries and such supplies and services including the investment, exploration, and development necessary to assure such growth, and the importation of goods in terms of their quantities, availabilities, character, and use as those affect such industries and the capacity of the United States to meet national security requirements.

"(d) A report shall be made and published upon the disposition of each request application, or motion under subsection (b). The Director shall publish procedural regulations to give effect to the authority conferred on him by subsection (b).

"(e) The Director, with the advice and consultation of other appropriate Departments and Agencies and with the approval of the President, shall by February 1, 1959, submit to the Congress a report on the administration of this section. In preparing such a report, an analysis should be made of the nature of projected national defense requirements, the character of emergencies that may give rise to such requirements, the manner in which the capacity of the economy to satisfy such requirements can be judged, the alternative means of assuring such capacity and related matters."

(b) The amendment made by subsection (a) shall not affect any action taken or determinations made before the date of the enactment of this Act.

SEC. 9. (a) Subsection (a) of section 333 of the Tariff Act of 1930 (19 U. S. C., sec. 1333 (a)) is amended to read as follows:

"(a) AUTHORITY TO OBTAIN INFORMATION. For the purposes of carrying out its functions and duties in connection with any investigation authorized by law, the commission or its duly authorized agent or agents (1) shall have access to and the right to copy any document, paper, or record, pertinent to the subject matter under investigation, in the possession of any person, firm, copartnership, corporation, or association engaged in the production, importation, or distribution of any article under investigation, (2) may summon witnesses, take testimony, and administer oaths, (3) may require any person, firm, copartnership, corporation, or association to produce books or papers relating to any matter pertaining to such investigation, and (4) may require any person, firm, copartnership, corporation, or association to furnish in writing, in such detail and in such form as the commission may prescribe, information in their possession pertaining to such investigation. Any member of the commission may sign subpenas, and members and agents of the commission, when authorized by the commission, may administer oaths and affirmations, examine witnesses, take testimony, and receive evidence." (b) Subsection (d) of section 333 of the Tariff Act of 1930 (19 U. S. C., sec. 1333 (d)) is amended by striking out "under Part II of this title" and inserting in lieu thereof "before the commission".

(c) (1) Subsection (a) of section 336 of the Tariff Act of 1930 (19 U. S. C., sec. 1336 (a)) is amended by striking out the third sentence thereof. The first sentence of subsection (c) of section 337 of the Tariff Act of 1930 (19 U. S. C., sec. 1337 (c)) is amended by striking out "under and in accordance with such rules as it may promulgate".

(2) Part II of title III of the Tariff Act of 1930 (19 U. S. C., sec. 1330, et seq.) is amended by inserting after section 334 the following new section:

"SEC. 335. RULES AND REGULATIONS.

"The commission is authorized to adopt such reasonable procedures and rules and regulations as it deems necessary to carry out its functions and duties."

SEC. 10. The enactment of this Act shall not be construed to determine or indicate the approval or disapproval by the Congress of the executive agreement known as the General Agreement on Tariffs and Trade.

Passed the House of Representatives June 11, 1958.
Attest:

RALPH R. ROBERTS, Clerk.

The CHAIRMAN. We are very happy to have the distinguished Secretary of State as our first witness today. Mr. Dulles, you may proceed, sir, to make your statement.

STATEMENT OF HON. JOHN FOSTER DULLES, SECRETARY OF STATE

Secretary DULLES. Mr. Chairman and members of the committee, 4 months ago I spoke before the House Ways and Means Committee in support of the President's proposal to extend and strengthen the Trade Agreements Act.

I now direct myself to the bill which has come to this committee from the House of Representatives. That bill represents some alteration of the bill as originally introduced. The changes, however, are acceptable to the Executive and H. R. 12591 as received in the Senate has my full support.

The Secretary of Commerce will speak to you about the compelling reasons of domestic economic policy for strengthening and extending the Trade Agreements Act. The Secretary of Labor and the Secretary of Agriculture will doubtless present further convincing evidence of the importance of the program from the domestic viewpoint. I shall direct myself primarily to foreign policy considerations.

We live in a world which is new in terms of its political structure and its economic demands. Twenty countries have won their political independence within the last 15 years and this trend is likely to

continue.

Seven hundred million people are directly involved in this rapid transformation from the long-established system of colonialism. The very rapidity with which this transformation is occurring presents a major problem-how to achieve and maintain political stability.

Mass aspirations follow these new grants of independence. They are contagious and spread to other lands. The demands for improved living conditions are insistent. No possible sources of assistance are dismissed out of hand. Present free-world nations may prefer to buy and sell within the free world. But if they are frustrated in their efforts to do so, they can be expected to direct their search elsewhere. Although no international wars are being fought today, our security is menaced, not only by the vast Soviet military buildup, but by the efforts of International Communism to turn the worldwide changes to selfish use as stepping stones to world domination. If we are to com

bat this evil successfully, a better international order must be built and the United States must be in the forefront of that effort.

Fortunately for us, the free world is not disunited. It works together and provides dispersed power to retaliate against armed aggression. Military unity is imperative and must be continually strengthened. But this requires high morale throughout the free world and a willing spirit of close cooperation. Such an atmosphere is not created and maintained through military cooperation alone.

It

Economic security is indispensable to all our allies and friends. is essential that their relationship to the United States contribute not only to their military security but also to their economic well-being. The strategy of Communist imperialism involves the subversion of country after country until the United States is isolated and subject to economic strangulation. You have heard repeatedly Mr. Khrushchev's threat of war in the peaceful field of trade and his boast that the Soviets will win this war because of the superiority of their system. I have said before-and I say again-it would be reckless to treat this threat as negligible.

The Soviet Union is rapidly developing its weapons for waging economic warfare against the United States and has achieved an industrial level which enables it to export manufactured goods in increasing quantity and variety, and to take in exchange large amounts of natural products, whether agricultural or mineral, for their own use or to dump on free world markets.

Through pursuing this course, they hope to gain dominance-first economically, then politically, in many countries which need an assured foreign market.

Our Government has, by treaty or resolution declared, in effect, that the peace and security of the United States would be endangered if any of nearly 50 countries were to be conquered by Communist imperialism. But, declaring this is not enough. We have to convince both friend and foe that we will do what is needed to prevent the Communist conquest. So we have the policies and actions represented by our mutual security program and by the Trade Agreements Act.

Some seem to believe that national policies which aim to assure a congenial and friendly world environment are un-American or unpatriotic. The fact is that, from our beginning, United States doctrine has proclaimed that our own peace and security are bound up inextricably with conditions of freedom elsewhere. Today, that doctrine, the doctrine of interdependence, is the cornerstone of freeworld policy.

How has trade figured in these developments? During the depression of the early thirties, many countries tried to restore their economies by tariffs, quotas, and currency manipulations. We did those things, and did them without regard to the effect upon others who were largely dependent on international trade.

But the domestic relief we expected did not come. And by 1934 the decline in world trade brought to power, in several countries, leaders so nationalistic and aggressive as to constitute a major cause of World War II.

They sought to expand their national domains at the expense of weaker neighbors on the ground that they could not assure their people a living standard by normal methods of peaceful trade. The

price we all paid in World War II will, I hope, help us to avoid such shortsighted action in the future.

So far as the free world is concerned, the trend since that war has,. fortunately, been in the other direction. In this movement to liberalize trade, the United States has been an indispensable leader. Our Trade Agreements Act, first enacted in 1934, and since extended 10 times, has reflected our desire and purpose to promote the mutually advantageous expansion of world trade.

Some elements of United States industry try to improve their competitive position by implying that any competition from abroad, merely because it is foreign, should for that reason be barred. This viewpoint, I repeat, cannot be accepted as United States policy without endangering our whole Nation. This is not to say there are no cases where foreign competition should be restrained. There is a wide range of such cases, and protection is, in fact, accorded.

It is true, however, that any general disposition to exclude foreign goods simply because they are competitive would gravely disrupt economic, political, and spiritual relationships which are required for our own welfare and for the defense of our peace and freedom.

You may ask: What is the proper relationship between the progress of the trade program and the interests of domestic producers? Let me say this: Almost every national policy hurts some and benefits. others. The form of our taxation, the nature of our defense purchases, the location of government operations-all of these and many other national policies inevitably tip the scales of competition. Often, and certainly in the field of trade, the few who may be hurt, or fear that they may be, are more vocal than the many who may gain. That is their right. But the Congress has a duty, that is, to serve the overriding national interest.

Important as the trade-agreements program has been since its inception in 1934 and since World War II, I anticipate a progressively more vital role for the program in the future.

The program is one of our most effective tools for combating the emerging Soviet strategy of political-economic penetration into uncommitted countries through the offer of trade and economic aid. Since 1954, economic assistance extended by the Communist bloc to countries outside the bloc has amounted to $12 billion.

Since 1954, the exports of the Communist bloc to the free rations. have grown 70 percent. In 1957, they amounted to some $3.1 billion. Furthermore, the number of bloc trade agreements with the free nations has more than tripled in the last 3 years, rising from 49 at the end of 1953 to 149 at the end of 1957. From what we know of the economic potential of the Communist bloc, there is reason to believe that this performance can be greatly augmented within the next few years. The state-controlled economy of the Soviets is well suited to swift changes in quantities and destination of exports. The shortage of virtually all consumer goods within the Soviet area means that additional quantities of a wide variety of imported materials can be absorbed with ease.

The danger of the Soviet economic offensive arises from the fact that, to the leaders of Communist imperialism, economic ties are merely another means of gaining ultimate political control. If, through trade and economic assistance, they can bring free nations. within their economic orbit, they will have paved the way for political

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victory. Even though responsible leaders in the recipient countries also know this, desperation for markets in order to meet the aspirations of their people can tempt those governments to gamble their political independence rather than refuse Communist aid and trade.

To this challenge, our basic answer is our trade-agreements program, coupled with our own aid program. The free world, as a whole, certainly offers by far the largest market for the raw materials that provide most of the money income of the less developed countries. This offer can only be realized, however, so long as the dominant free-world trade trend is in the direction of opening markets and expanding trade to the maximum.

In Western Europe, we see unfolding a great new movement toward economic unity. This is the European Economic Community established by the Treaty of Rome, which entered into force on January 1, 1958. Through this treaty, six nations on the European continentBelgium, France, the German Federal Republic, Italy, Luxembourg, and the Netherlands-have agreed to eliminate all barriers to trade among themselves and to act toward others as a single economy.

They will form a single common market of 170 million customers with a total import trade which, last year, was larger than that of the United States.

This new market will, in time, have a single uniform tariff and a common trade policy which it will apply to imports from the United States and other countries of the free world.

This development has been encouraged by the United States, both the Congress and the executive branch, since the early days of the Marshall plan. It should now be our policy to cooperate with the new Economic Community of Europe to the end that both the United States and the European Economic Community will contribute to the economic strength and well-being of the free world as a whole.

The next 5 years will be the critical, formative years of the European Economic Community. This is a major reason why it is essential that the trade-agreements program be renewed this year for 5 years. During this period, long-lasting decisions will be made as the level of the European common external tariff and as to the other commercial policies which the Community will adopt.

The best opportunity we will have to negotiate with the Community the tariff reductions most advantageous to our export trade will be before the new tariff becomes firmly established. We would seek to negotiate tariffs lower than those to which the countries comprising the European Economic Community are presently committed.

The procedure and timetable which its members contemplate for the establishment of the Common Market illustrate the need for extending our program for not less than 5 years.

The first step in reducing internal tariffs, within the Common Market, will be taken next January 1, when internal duties are to be reduced by 10 percent from their present levels. Thereafter, there will be progressive reductions until internal tariffs are completely eliminated by the end of 1972. These reductions are important to us because, after the first of next year, goods produced within the Common Market will have a steadily increasing advantage within the Common Market area over American and other free-world goods. With respect to external tariffs, the plan is this: The European Economic Community has informed us that they expect to have their