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.

27629-58-pt. 1—12

Senator MALONE. But you work out ahead of time a program including all the materials upon which the policy committee is willing to 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 make up to that point.

Secretary DULLES. Within the limits of his instructions, yes.

Senator MALONE. And do you sometimes change his instructions on the telephone?

Secretary DULLES. I do not think so. I think it is never done on a quick basis.

Senator MALONE. He comes back and meets with the committee if he has a proposition made to him that does not fall within the latitude given him in the beginning.

Secretary DULLES. The committee would be called together again and the President would have to change the instructions.

Senator MALONE. Or he could mail it here and you could meet and 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 mail. Senator MALONE. Are these programs made public in any way 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 precede the taking of our position and the establishment of peril points and the like through the processes of the Tariff Commission, but we do not disclose to others how far we might be willing to go because, as the chairman says, if we did that, we would lose our trading position.

Senator MALONE. Are any committees of Congressmen or Senators 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 committee which under the Constitution of the United States, is supposed to have something to do with tariffs? Is it advised?

Secretary DULLES. The theory of the act, Senator, as you of course well know, is that Congress by passing the act gives discretionary authority, negotiating authority to the President within limits which are defined by the act.

Senator MALONE. Yes.

Secretary DULLES. And further clarified by the Tariff Commission, and the President acts under that authority, and I think he normally does so without consultation, coming back again to Congress.

Senator MALONE. You do not feel it is incumbent upon you to tell the Congress anything until after the trade agreements have been signed.

Secretary DULLES. We think that the Congress tells us first what they want us to do, and within what limits they want us to do it, and then we go ahead and carry out that mandate.

Senator MALONE. Without any information to the Congress in the interim.

Secretary DULLES. Without referring back again to Congress; yes, sir.

Senator MALONE. And not even when it is completed. All you do then is publish it when it is completed.

Secretary DULLES. Yes.

Senator MALONE. Now, are any Congressmen or Senators allowed to sit in on any of your negotiations in Geneva?

Secretary DULLES. They have been present, I believe, at Geneva, on certain occasions. I do not think that they have ever been, as far as I can recall, actual members of the delegation.

Senator MALONE. Not members, but are they allowed to sit in in actual negotiations?

Secretary DULLES. I think the negotiations are conducted in private.

Senator MALONE. Yes; I think so, too.

In other words, the answer is "No."

Secretary DULLES. To the best of my knowledge, I think the answer is "No."

Senator MALONE. You would probably know more about it than anybody else, wouldn't you?

Secretary DULLES. No; because these things have been going on for 24 years, Senator, and my contact with it is only quite recent.

Senator MALONE. I am not talking about somebody that is not now in office. Maybe someone not now in office might know more about why this was put up to Congress in the first place.

Secretary DULLES. I thought your inquiry related to the whole span of this legislation.

Senator MALONE. Yes. I rather think the first proposers of this legislation did know what they were doing.

I have had my doubts since.

Now another question. Are any industrialists or people who will be affected by these agreements allowed to know what is going on in Geneva or sit in or advise with the committee in Geneva, while they are in progress?

Secretary DULLES. They are fully consulted in advance of our going to Geneva.

Senator MALONE. Who is fully consulted?

Secretary DULLES. The industries that might be affected by any tariff reduction.

Senator MALONE. Are they?

Secretary DULLES. Yes, sir.

Senator MALONE. Who represents these industries? Who do you think represents them and who do you discuss it with that affects, for example, titanium, or affects minerals of different kinds or textiles? Who do you discuss it with?

Secretary DULLES. The representatives of the industry, the industrial associations and the like.

Senator MALONE. You do?

Secretary DULLES. Yes, sir. One of the reasons, Senator, for this time schedule that we talked about in relation to the common market is the fact that before we take any position on possible reductions and create our negotiating position, we go through months and months and industry goes through months and months of preparatory work, at very great expense, time, and trouble, and it is a monumental process.

Senator MALONE. And the industries do consent to these trade agreements ahead of time?

Secretary DULLES. No, I do not say they consent to them. I say they are fully consulted.

Senator MALONE. They are fully consulted. Just how?

Do you ask them to appear before a committee here and tell this committee their position? Is that it?

Secretary DULLES. They appear before the Tariff Commission among other things.

Senator MALONE. What committee is it they appear before that represents your Department or represents the trade agreements organization that is going over there to do the job? Don't you have a committee before which an industry or representative can appear?

Secretary DULLES. There is a committee called the Committee for Reciprocity Information, in addition to the Tariff Commission. Senator MALONE. Who serves on that committee?

Secretary DULLES. The agencies that are represented on the Trade Agreements Committee and the Trade Policy Committee.

Senator MALONE. In other words, the Policy Committee, headed by Secretary Weeks?

Secretary DULLES. That is right.

Senator MALONE. And then the Cabinet members. They are all Cabinet members that are members of this Committee, aren't they? Secretary DULLES. They are Cabinet members or Deputy Cabinet members.

Senator MALONE. Do the Cabinet members sit and hear this testimony?

Secretary DULLES. No, not usually.

Senator MALONE. They appoint someone to represent them out of their department do they?

Secretary DULLES. Generally the Cabinet members do not themselves sit on the Committee for Reciprocity Information, although I would say that a special Cabinet Committee was set up, for instance, to deal with the petroleum problem. I, myself, personally sat on a number of occasions.

Senator MALONE. Petroleum is only 1 out of 5,000.

Secretary DULLES. But normally an under secretary such as Mr. Dillon, who is here, would sit to represent me on the Trade Policy Committee.

Senator MALONE. Now petroleum of course is only one product out of perhaps 5,000 that we produce. That is true.

Secretary DULLES. That is quite right, and if I spent my time dealing with those 5,000 products, I would not be able to deal with foreign affairs.

Senator MALONE. Yes, I understand that. Of course some of us think that it might be advisable at that. But a further question: Could you provide the record with the representatives of the Cabinet officers that have sat on this what-do-you-call-it committee?

Secretary DULLES. I do not know to which committee you are referring.

Senator MALONE. For Reciprocity Information.

Would you provide the committee, say, for the last couple of years with the names of the persons who have sat and actually heard the testimony?

Secretary DULLES. Yes, I think we can do that.

(Secretary Dulles subsequently supplied the following for the record:)

MEMBERS OF THE COMMITTEE FOR RECIPROCITY INFORMATION, 1956-58

Edgar B. Brossard, Chairman, United States Tariff Commission.

Charles W. Adair, Jr., Chief, Trade Agreements and Treaties Division, Department of State.

George H. Willis, Director, Office of International Finance, Department of the Treasury.

Prentice N. Dean, Associate Chief, Foreign Economic Policy Division, Office of Foreign Economic Affairs, Office of Assistant Secretary of Defense (International Security Affairs), Department of Defense.

Harry Shooshan, International Activities Assistant, Technical Review Staff, Office of the Secretary, Department of the Interior.

A. Richard DeFelice, Deputy Assistant Administrator, Agricultural Trade Policy and Analysis, Foreign Agricultural Service, Department of Agriculture.

Robert E. Simpson, Director, Office of Economic Affairs, Bureau of Foreign Commerce, Department of Commerce.

Leonard R. Linsenmayer,2 Associate Director, Office of International Labor Affairs, Department of Labor.

Katharine Jacobson (Miss), trade policy adviser, Office of the Deputy Director for Technical Services, International Cooperation Administration.

Senator MALONE. That is where you think that the industries have been consulted.

In other words, they tell you what their situation is?

Secretary DULLES. More importantly, in the hearings before the Tariff Commission.

Senator MALONE. Whenever the Tariff Commission is asked to determine a peril point, is that it?

Secretary DULLES. That is correct, but we do not reduce tariffs without first getting a peril-point finding.

Senator MALONE. Now that peril point, as long as you brought it up, I had it on the list for a little later. What is the peril point? What does it represent?

Secretary DULLES. It is defined in the law. It is a point beyond which, just using popular language, there would be peril, the imports would imperil the American industry.

Senator MALONE. Then it is not a point at which a domestic industry could make a profit, a reasonable profit, but it would be at a point that could endanger the industry, perhaps cut below their cost of production, is that it?

Secretary DULLES. I do not think the cost of production element is brought in. It is a more broad aspect:

Causing or threatening serious injury to the domestic industry producing like or directly competitive articles.

That is the main test.

Senator MALONE. Yes.

In other words, if it causes serious injury. It is not a question of making any money but the peril point would be at a point where there would be serious injury done the industry.

Secretary DULLES. That is what the act provides.

Senator MALONE. That is what I wanted to clear up in the record. Secretary DULLES. Yes.

1 Preceded, in 1956-57, by Carl D. Corse, then Chief, Trade Agreements and Treaties Division, Department of State.

Preceded, in 1956-57, by Philip Arnow, then Associate Director, Office of International Labor Affairs, Department of Labor.