ÆäÀÌÁö À̹ÌÁö
PDF
ePub

into sheets that may be stretched, leveled, polished, ground, or otherwise treated and then trimmed to very exact dimensions.

The zinc sheets, plates, and strips that result from these processes may be used for making engraver's plates, lithographic plates, weatherstrip, terrazzo strip for terrazzo flooring, identification tags, termite protective sheeting, flashing, gutters, mailbag grommets, drawn zinc batter cans, or for many other uses.

Senator KERR. You have used the word "grommets.'
Will you tell us what it is?

[ocr errors]

Mr. MACK. It is a small ring that is placed in a series along the top of the mailbag to prevent tearing when the cord is placed through. Senator KERR. Like an eye in a shoe?

Mr. MACK. That is right; that is a good answer, Senator.

You have seen them in mailbags.

Senator KERR. Well, I may have, but up until this moment I was not aware of what they were called; I thought they were an eye, you

see.

Mr. MACK. All of the facilities that are required for the rolling of zinc are available today in the Netherlands, West Germany, Belgium, Italy, France, and in the British Isles.

However, with the exception of the facilities owned by the companies I represent there are almost no facilities in the Western Hemisphere for the rolling of zinc.

The Rolled Zinc Emergency Tariff Committee is opposed to H. R. 12591 in its present form and recommends that amendments be made by this committee before reporting the measure to the Senate. It is our belief that:

(1) A 5-year extension as proposed in the House bill is too long. We are of the opinion that Congress already has gone too far in abdicating its legislative function as provided in the Constitution for controlling tariffs. The Congress should act to reassert its constitutional responsibilities rather than act to further delegate them.

In our opinion, the Trade Agreements Act should not be extended for more than 2 years. I do not believe it will be disputed that there has been a one-sided administration of the act with little or no concern for the welfare of domestic industries adversely affected by imports. An extension for only 2 years would permit Congress to maintain closer control and be in a position to terminate the delegation of authority, should there not be a fair administration.

Inasmuch as this committee already is fully apprised regarding the treatment given industries which have applied for increased import protection under the escape clause, I shall not, unless requested, discuss this aspect in detail.

(2) Any authority to reduce tariffs further should be limited to 5 percent each year for 2 years, which reductions should not become initially effective after that 2-year period.

In view of the extensive reductions which already have transpired, serious question might be raised as to whether any further reductions should be authorized. However, with the recommendation which we will make following this recommendation, reductions of 5 percent per year for 2 years might be undertaken on some commodities with proper safeguards.

(3) The Tariff Commission should prepare the list of items on which public hearings will be held to determine peril points and the items

subject to negotiation instead of the present practice of the list being prepared by the Trade Agreements Committee.

(4) The provision for Congress to affirm the recommendations of the Tariff Commission over the objection of the President should be by a majority vote of both Houses rather than by a two-thirds vote. The provision in the House bill permitting such action by a two-thirds vote is a meaningless gesture.

Let us look at the situation from a practical standpoint.

Industries today needing increased import protection first must convince the Tariff Commission.

This, in itself, is a very difficult task and to win a case at the Tariff Commission for increased import protection, overwhelming evidence is necessary.

After a case is won in the Tariff Commission and the Commission's recommendations are sent to the President, the future of the particular industry concerned is determined by the decision of the President with the aid of his advisers and the advice of the Commerce and State Departments, among others, who ususally recommend against increased import protection for the domestic industry.

Even if Congress should be permitted by a majority vote of both Houses to affirm the Tariff Commission's recommendations over the objection of the President, the road still would be a difficult one, exceedingly difficult when a small industry is involved.

To illustrate my point, let us turn to the lead and zinc mining industry, which is not a small industry, but one which has tremendous political interest and support in connection with its problems.

The President, very early last fall, requested the Tariff Commission to expedite an investigation under the escape-clause procedure of the lead and zinc industry.

After the Tariff Commission concluded its investigation and all six Commissioners recommended increased import protection, the President should have been in a position to act quickly, particularly since he had requested the Tariff Commission to expedite its investigation.

You know what has happened.

The President, instead of acting promptly, waited until almost the end of the 60-day period in which he is required to act and then announced that he is further suspending action pending congressional consideration of a subsidy program for lead and zinc which would cost the taxpayers tremendous amounts of money.

This is an example of the attention a politically powerful industry receives. A small industry is completely at the mercy of administrative whim. The lead and zinc case is an excellent example of abuse in the administration of the act.

The Rolled Zinc Emergency Tariff Committee, while sympathetic and ever mindful of the problem of the zinc mining industry, is taking no position on the controversial subject of the proper import duty on slab zinc or on zinc concentrates.

We ask only that if increased import protection should be imposed on zinc metal that compensatory changes be made in the applicable import duties on our products.

(5) The Tariff Commission should be authorized to consider the effects on related industries when holding an escape clause investiga

tion on basic industries. In order to explain this recommendation 1 must briefly review the problems of the rolled zinc industry.

Last year H. R. 8257 was introduced. This bill proposed to enact part of the administration's long-range metals program into law and specifically proposed to raise the duties on imports of zinc concentrates, zinc in slab form, zinc sheets, and other enumerated items.

The administration strongly supported this bill. A majority of the members of the House Ways and Means Committee, however, concluded that existing administrative remedies should be exhausted, even though not completely adequate, before resorting to legislation. Accordingly, the lead and zinc industries filed an application with the United States Tariff Commission and requested relief under the escape clause.

This application included rolled zinc strip, rod and wire, as well as sheet and plate. The Tariff Commission ruled that the rolled zinc products constituted a separate industry and that, therefore, these products could not be included in the same escape clause action. When we learned of this, we filed a separate escape clause application for the same rolled zinc products.

The Tariff Commission ruled, however, that the language of the escape clause provision would not authorize the Commission to recommend increased duties on rolled zinc products, even though they might recommend an increase on slab metal duty that would make the duty on slab metal higher, by 100 per cent, than the duty on the same metal in sheet form or plate form.

In effect they told us that according to present rules our industry would have to wait until the increased duty on slab metal actually created sufficient imports of foreign rolled zinc products before section 7 could be used for our protection.

In other words, the Tariff Commission ruled that the provision in the escape clause authorizing increased import protection when injury to the domestic industry is threatened means a threat based on the then current rates of duty and not a threat which would occur should the import duties on raw materials be increased.

It is quite possible under such regulations that sizable portions of the rolled zinc industry might be out of business before we could satisfy the present requirements to obtain additional tariff protection.

Upon careful reflection we felt that there was one administrative remedy still open to us, and only one. The same article XXVIII which it was stated the administration would use to put the increased tariff into effect if the tariff had been increased by legislative action (H. R. 8257) could be used to accomplish the same purpose if the tariff into effect if the tariff had been increased by legislative action

Accordingly, our group filed on November 22, 1957, an application asking for relief under article XXVIII of the General Agreement on Tariffs and Trade. We felt that our situation met the "special circumstances" requirement of article XXVIII.

Action still is pending on this application. I shall not, however. discuss the situation pertaining to this application unless requested to do so by the committee, in which event I shall be pleased to discuss it.

The point which I would like to make is that some disagreement has been expressed as to the correctness of the Tariff Commission ruling. It has been suggested that under the escape clause, the Tariff Commission already has authority to include related industries in

escape clause applications on the basis that the provision in the escape clause regarding threatened injury also means threatened injury contingent on anticipated increased import protection on raw materials or on products which are supplied to other industries for further processing.

To clarify the matter, however, we believe statutory provision should be made authorizing the Tariff Commission, in holding an escape clause investigation, also to consider the effect on related industries and to submit recommendations to the President for increasing import protection on these related industries at the time recommendation is submitted to increase the import protection on the basic industries.

The House Report on H. R. 12591 on page 9 states as follows:

The committee recognized that effective relief in the case of some products on which trade agreement concessions have been granted may suggest the advisability of some remedial action on certain closely related nonconcession products. In such a case, the committee agreed that the Tariff Commission should draw to the attention of the President such other course of action as it might deem appropriate to avoid injury.

Although the above-quoted paragraph refers to nonconcession items, it would seem to follow that if the Commission is authorized to recommend action on items not within its scope of consideration, because of their being nonconcession items, that the Commission also should be authorized to recommend specific action on concession items which are directly under its jurisdiction.

The statement in the House report would seem to imply such authority; however, it does not specifically so state. Therefore, it is our request that the statute be amended to specifically provide this authority. Let me illustrate the importance of this recommendation.

The rolled zinc industry, as I have already indicated, manufactures zinc sheet, strip, rod, wire, and plates. These products are manufactured almost 100 percent from the basic zinc metal. If there should be any increased import protection on the basic zinc metal in equity there should be and, necessarily there must be, if the industry is to survive, simultaneous and proportionate upward adjustments in the duty on rolled zinc products.

Under current Tariff Commission interpretations, such a simultaneous consideration is not in order and we are asking that the statute be amended to provide for consideration of the products of related industries.

I would like to state that we are very much concerned with what, appears to be a new determination to handle cases of injury to domestic industries by providing direct subsidies instead of increasing the import protection.

If

In our opinion, the tariff is the logical way to protect, not by means of subsidization. A subsidized industry is not a healthy industry. a policy of subsidization were practiced generally, we would have a Nation of sick industries and fantastic expense to the taxpayers.

Recently, we have been told by leaders of both parties that the Nation could not afford tax reduction, a decision which most citizens have accepted reluctantly.

Now, however, we understand that a program is being considered for subsidizing various mineral industries as an alternative to increased import protection, a program which would cost $350 million to finance.

Inasmuch as it is the function of this committee to consider taxes, I would like to say that if we can afford such extravagant subsidies, and we believe them to be not only extravagant but unwise, then it would seem far preferable to increase the import protection for the benefit of mineral and related industries and then to reduce taxes.

For example, Federal excise taxes, according to information supplied by the Internal Revenue Service, indicate that if we were to spend $350 million in tax reduction instead of mineral subsidies, then we could repeal entirely the excise taxes on refrigerators, deep freezers, air conditioners, hot water heaters, kitchen ranges, clothes driers and ironers, dehumidifiers, dishwashers, and many other electric, gas, and oil appliances, electric light bulbs, radio and television sets, phonographs, photographic equipment, fountain pens, mechanical pencils, lighters, and matches.

We believe, therefore, that the sound and constructive approach, if the mineral industries are to be assisted, would be tariff protection and then to spend the $350 million in tax reduction for the benefit of taxpayers.

We urge your careful consideration of our recommendations.
The CHAIRMAN. Thank you, Mr. Mack.

I want to say that I thoroughly agree with you that industries that are injured by importation should not be subsidized but there should be other means to remedy the situation. If we carry that to the logical conclusion there may be many industries that, in the future, will need to be subsidized.

Any questions?

Senator KERR. Isn't it a fact, Mr. Mack, that the program kind of gets down to these elements: No. 1, excessive concessions under the Reciprocal Trade Agreements Act actually amount to the transfer of economic benefits to the nations who receive and use the concessions? Mr. MACK. That is our viewpoint, sir.

Senator KERR. So actually that is foreign aid in another form, is it not?

Mr. MACK. Yes, sir.

Senator KERR. Doesn't it look like folly to you not only that we would grant a concession in reciprocal trade agreements, as you say, that would create a sick industry here, that would require subsidization to the extent of $350 million a year just for one industry, but at the same time have a fight over here trying to get the foreign aid program reduced from what we think are exorbitant levels and then open up another door which, by itself, actually amounts to $350 million additional foreign aid but made in a different form and paid for by taxing our people and providing a subsidy to the industry thus injured?

Mr. MACK. Absolutely, Senator, I could not believe this program had been proposed until I saw it in print; I just could not believe it. Senator KERR. When there is a remedy so readily available? Mr. MACK. Yes.

Senator KERR. Authorized by law, and in fact, specified in the very law which is in effect being bypassed to create the situation?

Mr. MACK. In that connection, Senator, I think it is very interesting that the President asked the Tariff Commission to expedite its investigation of the lead, zinc situation, and then after they did expedite it

« ÀÌÀü°è¼Ó »