pertinent to prospective trade agreement negotiations, the detailed content of the agreements, and making recommendations concerning the administration of the trade agreements program to the President through the Trade Policy Committee.

As special problems arise or as new trade agreement negotiations are contemplated, the Trade Agreements Committee sets up interdepartmental subcommittees, sometimes called "country committees,' ," to consider the particular problems or possible negotiations and to submit data and recommendations to the Trade Agreements Committee.

Committee for Reciprocity Information

The Committee for Reciprocity Information has at the present time the same membership as the Interdepartmental Committee on Trade Agreements, but the Tariff Commission member serves as its Chairman. This Committee was established in pursuance of section 4 of the Trade Agreements Act (quoted above) to receive the views of the public in connection with prospective trade agreement negotiations, as well as with the administration of agreements already concluded. The Committee for Reciprocity Information holds public hearings prior to each trade agreement negotiation, in order that interested parties may have an opportunity to be heard and to have their testimony or other statements of views available to the Trade Agreements Committee and to the President.

These three committees provide the machinery to carry out the objective of section 4 of a thorough examination and review of both the concessions we should seek from other countries and the concessions we should offer in order to obtain them, which takes into account the views of interested persons and groups, con. cerning the proposed negotiations, as well as those of all of the governmentaagencies concerned, including the peril point findings of the Tariff Commission] Senator MALONE. I think you had better look that up. Are you telling me that he could not do it regardless of the Tariff Commission recommendations?

Secretary WEEKS. The peril-point procedure is established in the legislation.

Senator MALONE. But it does not say that he has to conform to it. All he has to do when he does not conform to the peril point as set by the Tariff Commission is to explain to Congress why he did not conform.

Secretary WEEKS. Senator, he has to get the peril point finding. Senator MALONE. He has-but he does not need to accept it. Secretary WEEKS. But he does not have to conform to what the finding is.

Senator MALONE. That is what you should have answered in the first place.

has

Secretary WEEKS. Yes; that is correct, but as I said, he always

Senator MALONE. Let's go to the next question. He does not need to conform. That is the purpose of the question.

Secretary WEEKS. He has to get the information, but he does not need to conform.

Senator MALONE. He does not have to do anything but sell the industry down the river if he believes it will further his foreign policy. Secretary WEEKS. That is right.

Senator MALONE. Now then, that only required an additional 10 minutes to get the answer. Then, in effect, what he can do if he thinks it will further his foreign policy, he can sacrifice all or any part of any industry under consideration, can he not?

Secretary WEEKS. He can go beyond the peril point if he sees fit.

(The Secretary of Commerce subsequently forwarded to the committee for insertion in the record the following information with regard to the peril-point procedure:)

The Tariff Commission, in its recent publication Investigations Under the "Peril Point" Provision, third edition, May 1958, gives the following brief description of the statutory requirements concerning peril-point determinations:

"Sections 3 and 4 of the Trade Agreements Extension Act of 1951 set forth the statutory requirements regarding 'peril point' determinations in connection with proposed trade-agreement negotiations. The peril-point provisions of the 1951 act *** require the President, before entering into any trade-agreement negotiation, to transmit to the Tariff Commission a list of the commodities that may be considered for possible concessions. The Commission is then required to make an investigation (including a public hearing) and to report its findings to the President on (1) the maximum decrease in duty, if any, that can be made on each listed commodity without causing or threatening serious injury to the domestic industry producing like or directly competitive products, or (2) the minimum increase in the duty or additional import restrictions that may be necessary on any of the listed products in order to avoid causing or threatening serious injury to such domestic industry.

"The President may not conclude a trade agreement until the Commission has made its report to him, or until 120 days from the date he transmitted the list of products to the Commission. If the President concludes a trade agreement that provides for greater reductions in duty than the Commission specified in its report, or that fails to provide for the additional import restrictions specified, he must transmit to the Congress a copy of the trade agreement in question, identifying the articles concerned and stating his reason for not carrying out the Tariff Commission's recommendation. Promptly thereafter, the Tariff Commission must deposit with the Senate Committee on Finance and the House Committee on Ways and Means a copy of the portions of its report to the President dealing with the articles with respect to which the President did not follow the Tariff Commission's recommendations."

Senator MALONE. That is right, and now like the proposal coming out of the Department of the Interior, with 5 minerals-lead, zinc, tungsten, and others they make a proposition of paying the difference between the world price and the production price up to a certain limit, and that limit in most cases is about 25 to 35 percent of the American market.

You are aware of that, are you not?

Secretary WEEKS. Yes, sir.

Senator MALONE. You are.

Secretary WEEKS. Yes.

Senator MALONE. All right; then that means in the proposal to subsidize it, the tariffs are already so low they are ineffective. Most of them are under trade agreements. Then they are sacrificing at least two-thirds of the market to foreign nations, aren't they, for example, in tungsten?

They trade two-thirds of that now while we produced more tungsten in the United States than the country could use under the MaloneAspinall Act of 1953. It was extended in 1956 with a limited number of minerals and it is good until 1959 but the House did not follow the Senate in appropriating the money.

The Senate sent the appropriation to the House four times. But it showed by having a set price or tariff that made the difference in the wages and the cost of producing goods here and in the chief producing country that you could produce all the tungsten you need. But now they are limited in this offer so that it cuts that market in two. So

what the Secretary of the Interior's proposition is, is to divide the market of tungsten. Just take that as an example. There are about 5,000 products. About 40 percent to the United States and 60 percent abroad; isn't that about what the effect is?

Secretary WEEKS. I do not know what the percentages are.

Senator MALONE. I can furnish that for the record but that is the principle of what they are doing, isn't it?

Secretary WEEKS. Yes, sir.

Senator MALONE. Then the President has sacrificed at least a half of the tungsten industry to foreign nations to further his foreign policy, has he not?

Secretary WEEKS. I do not know the details of the tungsten situation.

Senator MALONE. If what I say is true, that they only figure on subsidizing it up to a certain percentage of the market, the rest of it is sacrificed, is it not?

Secretary WEEKS. I do not know how it will work out in price range. It might or it might not be, I would think.

Senator MALONE. If what I tell you is true, it would be true, would it not, that they only subsidize it up to a certain percentage of the market?

Now if that is true, then the rest of it is sacrificed, is it not?

Secretary WEEKS. I have no competence in the tungsten field.

Senator MALONE. You do not know whether or not I am telling you the truth; is that it?

Secretary WEEKS. If your facts are accurate, we are going to continue to buy some tungsten abroad; yes.

Senator MALONE. But that would sacrifice the amount of the market in this country above the amount of the subsidy, wouldn't it, that is to say, a certain number of units that is subsidized.

Beyond that, it would be a foreign market, would it not?

Secretary WEEKS. Well, obviously if you buy something abroad, you have got it here, as you have expressed it you have sacrificed

Senator MALONE. I know you understand what I am asking you and I want you to answer it and you are going to, though it may take a long time. That is, if I have explained this to you properly, instead of producing 100 percent or 75 percent, you are going to produce the percentage that is subsidized, aren't you, under any plan?

Secretary WEEKS. That would depend on what the world price is and what the domestic price is.

Senator MALONE. Why, of course, but if what I am telling you is true, the foreign price is so low that there is no chance of anybody here competing on a world price. So the subsidy comes in for 40 percent of it or 30 percent or 50 or whatever it proves to be, and beyond that you cannot produce it in this country, can you? Secretary WEEKS. No.

Senator MALONE. All right; that is enough.

Let's get on with it.

Now, the President can, then, regardless of any finding of the Tariff Commission, regardless of any provisions whatever, sacrifice part or all of any industry if he thinks it will further his foreign policy and makes these trades.

Secretary WEEKS. He has stated publicly that he does not intend to sacrifice

Senator MALONE. He has done it so what difference does it make as to what he has said. What he says doesn't make any difference, any more than it did under Truman. What he is doing is what counts. And I like this President; you know I do.

Secretary WEEKS. He has not penetrated the peril point once. You continue to say he can, but he has not done it and he has said publicly he would not do it.

Senator MALONE. He never said publicly that he would not go below the tariff point and if he has, I want you to put it in the record. Secretary WEEKS. Not specifically.

Senator MALONE. Of course he didn't.

Secretary WEEKS. But he has said that he would not stand by and see any industry placed in jeopardy.

Senator MALONE. But my friend, he has.

We are going out of business, and he probably doesn't know it. Secretary WEEKS. I do not think the record of our manufacturing exports and imports indicate we are going out of business. Senator MALONE. I know, but the boys are out of business.

Crockery is out of business, textiles are down, the mineral people are out of business, and I can name you so many, but I do not want to take your time because I know other Senators have questions.

What he is doing is what counts, and if that sound barrier is between the Cabinet and the White House, I think you ought to penetrate it, because he would never say a thing like that if he knows what is going on. I know the President, and I like him personally. I just do not vote for 2 or 3 things he is for; that is, billions to Europe to build these plants to compete with us, and free trade to divide the American markets with the foreign nations that we are subsidizing, and we have already priced ourselves out of every foreign market except when we subsidize the products, so I am not for that. But that is his business. We elected him, and I am for him, and I would be for him tomorrow if he were running.

Secretary WEEKS. Senator, from your standpoint, you are much better off with this new bill than you are with the present legislation. Senator MALONE. I just hope that we do not have any of it and then we would be in business again very quickly, 6 months and 2 months respectively, on the multilateral and bilateral agreements as I outlined to you.

Mr. Secretary, now I want to ask you a further question. We have settled now that the President can make any trade agreement that he wants to make.

Secretary WEEKS. Within the limits

Senator MALONE. Of course, that is understood.

Secretary WEEKS. Of the statute.

Senator MALONE. But the limits are so wide that no one in this Nation can operate under that limit if he uses it. Now he can do it if he wants to under this legislation.

We have established that, and I hope we do not have to go into it again.

Now in the rules and regulations of GATT, we have a document here which I hope I can find quickly.

It is a General Agreement on Tariffs and Trade, present rules and proposed revisions. I do not understand how you do not call this an

organization. You are right enough about it. Page 21-and this is not dated on page 21, proposed article XII, section 1:

Notwithstanding the provisions of paragraph 1 of article XI, any contracting party, in order to safeguard its external financial position and balance of payments, may restrict the quantity or value of merchandise permitted to be imported subject to provisions of the following paragraphs of this article.

Now I am going to ask you a question, and if you answer it the way I know, we will eventually get the answer. I won't take the time of the committee to read it, but I am going to ask permission that article XII, certain marked parts on page 21 to 22 be included in the record when we get around to it.

I am going to ask you if these provisions do not provide that any Nation may be excused and does not have to live up to their part of one of these trade agreements, the bargain they make, if they can show they are short of dollar balance payments.

Secretary WEEKS. Yes. My answer and understanding is that if they have not the dollars to buy, they do not buy.

Senator MALONE. That does not have anything to do with the answer at all.

I will ask it again.

Secretary WEEKS. As I called to your attention yesterday, the quota restrictions that were applied in the first instance have come down continually over the last several years.

Senator MALONE. You mean their quota restrictions on our products?

Secretary WEEKS. I read yesterday that the Belgium, Netherlands, and Germany, three of our principal trading partners, impose virtually no restrictions. Then I went on with Sweden, 70 percent, and so on.

Senator MALONE. Now let's get back to the question just to save the time of the committee because I am going to put this in the record and all of the other examination is going to make it very clear.

Are they bound to keep their agreements, the trade agreements that they sign with us if they can show that they are short dollar balance payments?

Secretary WEEKS. No, they are not, insofar as the rule against quantitative restrictions.

Senator MALONE. All right, that is good.

Let's just go right on now. That is enough.

Secretary WEEKS. It is part of the agreement.

Senator MALONE. And it is in the record. Why, of course.

Later

I will show they do not keep them. We are making a report on the
Eastern Hemisphere now in the Interior and Insular Affairs
Committee.

We will show that none of them keep their agreements.
Senator ANDERSON. Senator Malone, we did agree that at 10 o'clock

we would terminate and take up with Secretary Dulles.

Senator MALONE. I have just a couple of questions and then I am finished. I'm sorry it took so long, but it is just one of those things. Secretary WEEKS. May I say this, Senator. Where quota restrictions are imposed, they are not violating any agreement.

Senator MALONE. I understand that.

Secretary WEEKS. Because it is a part of the agreement that they can do it until they can get themselves on a basis where they can keep up to the level.