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what the Secretary of the Interior's proposition is, is to divide market of tungsten. Just take that as an example. There are nl 5,000 products. About 40 percent to the United States and 60 per 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 i= principle of what they are doing, isn't it?
Secretary Weeks. Yes, sir.
Senator Malone. Then the President has sacrificed at least a of the tungsten industry to foreign nations to further his for policy, has tie not?
Secretary Weeks. I do not know the details of the tang situation.
Senator Malone. If what I say is true, that they only figur subsidizing it up to a certain percentage of the market, the rest of sacrificed, is it not?
Secretary Weeks. I do not know how it will work out in | range. It might or it might not be, I would think.
Senator Malone. If what I tell you is true, it would be true, w it not, that they only subsidize it up to a certain percentage ol 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 tti you the truth; is that it?
Secretary Weeks. If your facts are accurate, we are going to tinue to buy some tungsten abroad; yes.
Senator Malone. But that would sacrifice the amount of market in this country above the amount of the subsidy, wouldn 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 ab: you have got it here, as you have expressed it you have sacrificed
Senator Malone. I know you understand what I am asking and I want you to answer it and you are going to, though it may a long time. That is, if I have explained this to you properly, in^ of producing 100 percent or 75 percent, you are going to produd percentage that is subsidized, aren't you, under any plan?
Secretary Weeks. That would depend on what the world pri and what the domestic price is.
Senator Malone. Why, of course, but if what I am telling y true, the foreign price is so low that there is no chance of any here competing on a world price. So the subsidy comes in ft
Eercent of it or 30 percent or 50 or whatever it proves to be, eyond 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 ol Tariff Commission, regardless of any provisions whatever, sari part or all of any industry if he thinks it will further his foreign p and makes these trades.
Secretary Weeks. He has stated publicly that he does not in to sacrifice
I Senator Max.one. He has done it so what difference does it make is to what he has said. What he says doesn't make any difference, iny 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 Dontinue to say he can, but he has not done it and he has said publicly be 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. 1 Senator Malone. Of course he didn't.
Secretary Weeks. But he has said that he would not stand by and Kf 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. Crock^v is out of business, textiles are down, the mineral people are out pf 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 ihe American markets with the foreign nations that we are subsidizing, and we have already priced ourselves out of every foreign mwket 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 (tetter 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 liien we would be in business again very quickly, 6 months and 2 months respectively, on the multilateral and bilateral agreements t» I outlined to you.
Mr. Secretary, now I want to ask you a further question. We Uve settled now that the President can make any trade agreement ihftt he wants to make.
>ecretarv Weeks. Within the limits — - — i Senator Malone. Of course, that is understood.
Secretary Weeks. Of the statute.
Senator Maloxe. But the limits are so wide that no one in this N»!ion can operate under that limit if he uses it. Now he can do R if he wants to under this legislation.
We have established that, and I hope we do not have to go into it
Sow in the rules and regulations of GATT, we have a document e 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 not dated—on page 21, proposed article XII, section 1:
Notwithstanding the provisions of paragraph 1 of article XI, any contract! party, in order to safeguard its external financial position and balance of paymer may restrict the quantity or value of merchandise permitted to be import subject to provisions of the following paragraphs of this article.
Now I am going to ask you a question, and if you answer it t way I know, we will eventually get the answer. I won't take the tii of the committee to read it, but I am going to ask permission tl article XII, certain marked parts on page 21 to 22 be included in t record when we get around to it.
I am going to ask you if these provisions do not provide that a Nation may be excused and does not have to live up to their part one of these trade agreements, the bargain they make, if they c show they are short of dollar balance payments.
Secretary Weeks. Yes. My answer and understanding is that they have not the dollars to buy, they do not buy.
Senator Malone. That does not have anything to do with t answer at all.
I will ask it again.
Secretaiy Weeks. As I called to your attention yesterday, t quota restrictions that were applied in the first instance, have 001 down continually over the last several years.
Senator Malone. You mean their quota restrictions on 0 products?
Secretary Weeks. I read yesterday that the Belgium, Netherlatx and Germany, three of our principal trading partners, impose virtual no restrictions. Then I went on with Sweden, 70 percent, and so o
Senator Malone. Now let's get back to the question just to sa the time of the committee because I am going to put this in the reco and all of the other examination is going to make it very clear.
Are they bound to keep their agreements, the trade agreemcr that they sign with us if they can show that they are short doll balance payments?
Secretary Weeks. No, they are not, insofar as the rule agaii 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. Lrt I will show they do not keep them. Wo are making a report on t Eastern Hemisphere now in the Interior and Insular Affs Committee.
We will show that none of them keep their agreements.
Senator Anderson. Senator Malone, we did agree that at 10 o'clo we would terminate and take up with Secretary Dulles.
Senator Malone. I have just a couple of questions and then 1a finished. I'm sorry it took so long, but it is just one of those thins
Secretary Weeks. May I say this, Senator. Where quota rcstr tions are imposed, they are not violating any agreement.
Senator Malone. I understand that.
Secretary Weeks. Because it is a part of the agreement that th can do it until they can get themselves on a basis where they can ke up to the level.
Senator Malone. Why of course.
Until they are living just like we are, we fully divide the wealth and the taxes, the money of the taxpayers and the markets of the United States with all the 36 of them so they can live like we do or we live as they do.
Then they would be bound; wouldn't they? You say "yes" to that.
Now I ask permission, because of the lack of time, that I may complete the statement that I intended to make here at the end of Mr. Weeks' testimony.
Senator Anderson. Surely.
Senator Malone. I thank you very kindly, Mr. Secretary. You have made a fine witness.
Senator Anderson. Mr. Secretary, the other members of the committee will decide if they want you back.
I do not imagine they do.
Secretary Dulles, we appreciate your coming back on Saturday morning to be with us for the balance of your testimony.
STATEMENT OF THE HONORABLE JOHN FOSTER DULLES, SECRETARY OF STATE—Resumed
Secretary Dulles. Thank you.
Senator Anderson. When we adjourned yesterday, Senator Malone was in the process of examination. At least, he was next on the list.
Senator Malone, do you have additional questions of the Secretary of State?
Senator Malone. It was understood, Mr. Chairman, that when we quit for lunch yesterday we would be back at 2:30 and the Secretary had some unfinished business, and we had some, too, so we did not object to it very much that he come back this morning and that I would continue.
Senator Anderson. Go right ahead, Senator Malone.
Senator Malone. Mr. Secretary, as near as I can see from the record, without reviewing it, we were talking at the close of yesterday's examination about who negotiated the multilateral trade agreements at Geneva. I think I had asked you, and we were discussing it, if it was not your Department or representatives of your Department, that sat in, representing the United States at Geneva, to negotiate these agreements.
Secretary Dulles. The agreements are negotiated by representatives of the State Department in accordance with instructions which are worked out by the Inter-Cabinet Committee and approved by the President.
Senator Malone. Beforehand?
Secretary Dulles. The actual negotiating is done by the State Department representatives.
Senator Malone. Then if he sees that he has to make any changes that seem to him reasonable in these trade agreements, then he must return and consult the policy committee?
Secretary Dulles. Yes.
He cannot make any decisions without authorization.
Senator Malone. But you work out ahead of time a program ind ing all the materials upon which the policy committee is willinj negotiate and the lengths to which you are willing to go.
Secretary Dulles. Yes, sir.
Senator Malone. Then he makes the best trade he can mak« to that point.
Secretary Dulles. Within the limits of his instructions, yes.
Senator Malone. And do you sometimes change his instruct on the telephone?
Secretary-dulles. I do not think so. I think it is never doni a quick basis.
Senator Malone. He comes back and meets with the commit^ he has a proposition made to him that does not fall within the latil given him in the beginning.
Secretary Dulles. The committee would be called together aj and the President would have to change the instructions.
Senator Malone. Or he could mail it here and you could meet then give him instructions.
Secretary Dulles. That is right.
Senator Malone. You do that sometimes, do you?
Secretary Dulles. Yes. He would probably cable more than n
Senator Malone. Are these programs made public in any before he goes to Geneva?
Secretary Dulles. They are worked out.
Senator Anderson. He would lose his trading position.
Secretary Dulles. There are public hearings, of course, that cede the taking of our position and the establishment of peril po and the like through the processes of the Tariff Commission, but do not disclose to others how far we might be willing to go beea as the chairman says, if we did that, we would lose our trai position.
Senator Malone. Are any committees of Congressmen or Sena advised of what you are about to do?
Secretary Dulles. Not in the normal case, no.
Senator Malone. Are any of them advised, such as this 01 mittee which under the Constitution of the United States, is supjx to have something to do with tariffs? Is it advised?
Secretary Dulles. The theory of the act, Senator, as you of coi well know, is that Congress by passing the act gives discretion authority, negotiating authority to the President within limits wl are defined by the act.
Senator Malone. Yes.
Secretary Dulles. And further clarified by the Tariff Commiss and the President acts under that authority, and I think he norm does so without consultation, coming back again to Congress.
Senator Malone. You do not feel it is incumbent upon yov tell the Congress anything until after tne trade agreements have b signed.
Secretary Dulles. We think that the Congress tells us first w they want us to do, and within what limits they want us to do it. < then we go ahead and carry out that mandate.
Senator Malone. Without any information to the Congress in interim.