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Senator MALONE. Were you familiar with the International Trade Agreements Act or the international trade agreements proposed legislation?

Mr. SIMPSON. I am broadly familiar with the proposal for the International Trade Organization. That was before I started this work, but I have read about it.

Senator MALONE. What did it provide?

Mr. SIMPSON. The International Trade Organization would have been quite different from the proposed OTC.

Senator MALONE. What was the objective of it?

Mr. SIMPSON. The International Trade Organization would have been an organization of governments dealing with a very comprehensive range of international economic subjects. In addition to the questions of tariffs and trade which the OTC would cover, the International Trade Organization would have covered questions of investments, of cartels, of commodity agreements, of employment, of a number of broad subjects of that character, and much of the opposition in the American business community, and I presume in the Congress to the

Senator MALONE. It could have allocated materials to different nations.

Mr. SIMPSON. It could have dealt with agreements for that purpose. Senator MALONE. Strategic and critical materials?

Mr. SIMPSON. Sir?

Senator MALONE. Could it allocate scarce materials to different nations?

Mr. SIMPSON. Well, it was not proposed that the organization itself engage in allocating, but the organization would have presided over rules for making agreements of that kind, yes.

Senator MALONE. If we had passed that act, we would have ceased being a nation. We would have just been a part of the world in the matter of trade, in the matter of distribution of materials, and in the matter of economic regulations.

Mr. SIMPSON. Well, Senator, that is a very broad description. I am not sure I could say yes or no to that characterization.

Senator MALONE. I am not sure that you know much about it yourself, but you thought you could answer it so I gave you a chance. That is exactly what it did mean.

Secretary WEEKS. Was the act passed?

Senator MALONE. No, it was not. This Congress has steadily and steadfastly turned down everything that would make anything of this nature permanent. God bless them for that.

Secretary WEEKS. It has entered in this bill, the same disclaimer that was in the previous legislation.

Senator MALONE. What?

Secretary WEEKS. The House in this proposed legislation has entered the same disclaimer as far as GATT is concerned.

Senator MALONE. They not only do not want to approve it, but they do not want any subtle language that might be interpreted by a sympathetic Supreme Court that we have approved it. That is right, is it not?

Secretary WEEKS. I understand that has been right up to this moment, yes, sir.

Senator MALONE. I think we are at the turning point. That is where I think we are. The people of the country are waking up. They are 10 years ahead of Congress. They could not believe that any administration or any Congress would do this to them. They are beginning to find it out that Congress is destroying their jobs and investments.

The International Trade Organization and the OTC-as long as you have gotten into that, I might just as well clear it up. I refer to page 261 of Senate Report No. 1627, 83d Congress. It would be very helpful to you if you obtained a copy of that report. Dozens of engineers, economists, and experts testified over a period of a couple of years. There are 10 volumes of testimony behind this 1 volume. I refer in the record to that volume, page 261, describing the International Materials Conference. It was really a part of this whole plan to throw us into a world setup that would pass on the proportion of such materials we could obtain, scarce materials, along with other nations.

Now in the matter of getting out of a multilateral trade agreement, any contracting party-I am reading now from the January 29 letter of the Chairman of the Tariff Commission, and if you have any doubts about this being correct, I hope you will discuss it further:

Any Contracting Party to the General Agreement on Tariffs and Trade (GATT) (including the United States), in accordance with the terms of the Protocol of Provisional Application

it has never been approved by Congress, any of these trade agreements or GATT. It has never been approved by Congress. GATT has never been submitted to us—

the terms of the Protocol of Provisional Application of the General Agreement on Tariffs and Trade, is free to withdraw from the agreement upon the expiration of sixty days

I don't want you to miss this

sixty days after notice of such withdrawal is received by the Secretary General of the United Nations.

You do not even have to notify each of the nations, just say this to the Secretary General, United Nations, and you are out in 60 days. Then do you understand that when you are out all of the products covered by the multilateral trade agreements revert automatically to the Tariff Commission under the 1930 act?

Secretary WEEKS. That is my understanding, yes, sir.

Mr. SIMPSON. Senator, I believe there is one reservation on that

statement.

Senator MALONE. What is it?

Mr. SIMPSON. A number of the bilateral trade agreements which we made with countries in the prewar period before the GATT was conceived remain in abeyance. They are superseded by the GATT, but in the event that the GATT were to disappear, then the bilateral trade agreements resume their force.

Senator MALONE. You mean they were not made for any certain period. They were made permanently, were they?

Mr. SIMPSON. No, sir, they were not made permanently. They were made subject to the 3-year termination provision which the Congress directed.

Senator MALONE. They could be terminated under that 3-year termination.

Mr. SIMPSON. Yes, sir.

Senator MALONE. But it does not take 3 years' notice.

Mr. SIMPSON. No. They may be terminated individually on 60 days' notice. My only point is they are not terminated by a withdrawal from GATT.

Senator MALONE. I am glad I have this second letter. That bothered me, so I wrote Mr. Brossard again, and this is what he said. I think you should study these letters and section 336 and I am going to have them put in the record. We understand of course that there are a lot of holdovers like you down in all these departments and some of them have been there for 25 years and the policy goes on and on.

This is in response to your request this morning for an explanation of how the Protocol of Provisional Application of the General Agreement on Tariffs and Trade permits the United States to withdraw from the agreement upon 60 days' notice.

The basic general agreement was signed at Geneva on October 30, 1947. Article XXXI of the general agreement provided that any contracting party may withdraw from the agreement on or after January 1, 1951, upon 6 months' notice. Article XXVI of the agreement provides for the definitive entry into force thereof under specified conditions. The agreement, however, has never entered definitively into force. However, it has been applied by the United States since January 1, 1948, pursuant to the Protocol of Provisional Application of the General Agreement on Tariffs and Trade signed at Geneva, Switzerland, on October 30, 1947, the same date on which the general agreement itself was signed.

Now, Mr. Chairman, I ask that the 2 letters received from the Tariff Commission, 1 dated January 29 and the later 1 dated March 4, be inserted in the record immediately preceding the insertion of section 336 of the 1930 Tariff Act.

We are completely out of all multilateral trade agreements upon 60 days' notice, and all bilateral trade agreements upon 6 months' notice. Then the workingmen and investors of America are back in business. Senator ANDERSON. Without objection that will be done.

Senator MALONE. Now, Mr. Secretary, there was a good deal of argument yesterday, and there has been considerable talking and argument and especially propaganda recently about the amount of foreign trade we have.

Mr. Secretary, I heard your testimony yesterday that we have $19 billion worth of trade. I studied your charts. I am putting a table in the record showing the amount of profitable trade-the exports of exportable goods from 1909 to 1957-that I want you to study. It is terribly hard to get any specific information on this subject from your Department. I would get an answering letter from somebody saying that my letter had been turned over to the proper authority and that I would receive the requested information. Then a couple of months would elapse with no information and I would write another letter. It was very difficult to get any pertinent information from your Department of Commerce or from the State Department.

It shows the total production of movable goods, exportable United States goods, by year, exports of United States merchandise, percent of movable goods exported, United States Government grants and loans net, exports minus United States grants and loans, ratio of column V which would be exports minus United States grants and loans, the ratio of column V to column I which is total production of

movable goods, the amount that could have been exported in percentage, and this is the way it runs.

In 1909, the first record, we had exported 9.8 percent of our exportable goods. Now this, you understand, Mr. Secretary, is profitable trade, not what you give away or pay foreign nations to take. It does not include the goods on which you pay a subsidy to sell it, not when you buy it at the American support price and sell it at the world price or below like Mr. Benson has to do to get rid of his agricultural products.

And Mr. Benson is very perturbed because our goods go into these countries below the cost of production of the countries that have been furnishing these markets and then they get mad. But we call it foreign trade.

Now it went to 10.9 percent in 1919, 12.9 percent in 1921, and started down again, but ran from 5.8 to 6.29 percent from 1927 to 1942. Let's take it to 1939, the year before the war started. It was 7.5 percent then. Of course, in the war years it immediately began to drop down. There was practically no foreign trade. It began to pick up again in 1945 when it was 7.3 percent, and so on down.

In 1955 it was 5.8. It was 6.3 in 1955. Mr. Chairman, I ask permission to insert this table in the record and to complete the table and any other record that is necessary for this testimony.

Senator ANDERSON. That permission will be granted.

(The tables referred to are as follows:)

United States production of movable goods, proportion exported, and foreign aid, selected years 1909-57

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1 Covers changes in both long- and short-term claims of the U. S. Government on foreign countries.

2 Not available. (Prior to 1940, estimates of production of movable goods have been prepared only for years covered by a Census of Manufactures.)

3 Not available. (See note 2.)

4 Less than $50,000.

5 Military aid shipments under the war and postwar lend-lease and Greek-Turkish aid programs are included in col. 5.

6 Excluding United States subscriptions of $323 million in 1946 and $3,062 million in 1947 to capital of International Bank and Monetary Fund.

Prepared from basic data of the Department of Commerce, June 1958.

The above chart was prepared in an effort to obtain an accurate picture of what portion of our movable goods is being shipped abroad through the normal processes of international trade and without the benefit of subsidies, grants, gifts, and credits extended to the countries receiving American products at the expense of the American taxpayer. This objective has not been completely accomplished, nor, in the absence of any Government central authority collecting and collating the contributions, loans, barter deals, special donations and exchanges of goods for foreign currencies made to or with foreign countries by our numerous and various Government agencies at the expense of the American taxpayer, does it appear that a true picture can be given.

For example, exports of farm products under the barter program authorized in title III of Public Law 480 are included in column 2, showing total exports, but nowhere appear in column 5 or 6 listing, respectively, grants other than military aid and Government loans. In 1957 more than $400 million worth of farm products were exported under the barter program. In 1956 barter "sales" totaled $299 million and the year previously $125 million.

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