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Statement Regarding The Trade Agreements Program Ht William S. Swingle, President, National Foreign Trade Council, Inc., New York, N. Y.
The National Foreign Trade Council believes that a large and expanding volume of international trade provides an effective and major contribution to the building up of that economic strength necessary for our continued security and freedom.
The United States today is more dependent than ever upon the maintenance of a high and rising level of international trade. This dependence on international trade has become intensified since inauguration of the trade agreements program in 1934, as our population and our economy have expanded. Now and in the future we must increasingly rely on exports, and reciprocally on expanded imports especially of strategic and other raw materials, if we are to have a prosperous and balanced agricultural and industrial economy.
Kxports are of vital importance for a prosperous America. They provide broader outlets for American agricultural and industrial products. As our economy expands, we will need to expand foreign markets. For many commodities and products, exports today comprise a highly important part of total output, ranging up to 25 percent in many instances and to 50 percent and beyond in others. To many American producers, exports are not merely Important, they are indispensable. And the time will come when exports will be as vital to our economy as a whole as they are now to many producers.
The present excess in exports may well be a temporary and passing phenomenon. As other industrial nations improve their production and distribution techniques, and as the European Coal and Steel Community and Common Market and similar arrangements become more and more effective, American exports will become increasingly vulnerable to more intensive competition occasioned by improvements in foreign product, price, and availability—the tripod upon which all successful marketing depends. We should, then, look to the long run as well as the short run, and be prepared to meet increased competition to our exports.
As regards imports, the United States today depends on foreign sources for a large part of the strategic and other raw-material supplies necessary to meet the needs of a high-level peacetime economy and the requirements of national defense. In the case of many such commodities, United States production accounts for only a small proportion of requirements. Furthermore, our own resources of some of the most essential raw materials are rapidly being depleted. There are other products for which we are entirely dependent upon foreign sources. In addition, this country obtains from abroad a substantial volume of semimanufactures and finished products required by the American economy.
Today, more than 4% million American families gain their living in activities directly concerned with export and import trade. There is scarcely an individual in the country who is not dependent in some degree upon our international commercial activities. All regions and all segments of our economy have a stake in the exportation and importation of goods and services.
A large volume of international trade enlarges opportunities for the less developed countries to sell increased quantities of the raw materials, foodstuffs, and other goods which they can currently produce. It thus makes it possible for these countries to obtain from the industrially more advanced nations the capital goods and other products needed to further develop their economies, raise living standards, and achieve the diversification essential to economic stability and growing prosperity. International trade is a proven means for the fulfillment of the aspirations of free peoples for economic and social advancement and so contributes to the peace and security of all the free world, including the United States.
It would be extremely unfortunate for the United States to discontinue a program for expanded international trade relations which means so much, both to the industrially advanced and less developed nations of the free world—a program in which this country has played such an active and leading part for nearly a quarter of a century.
The National Foreign Trade Council considers the United States trade-agreements program the best mechanism, thus far devised, for maintaining a high and rising level of international trade and for preservation and enhancement of the world trading relationships required for our expanding prosperity.
The council urges the enactment of legislation to carry forward the tradeagreements program. It recommends that the extension be for a duration sufficient to stimulate confidence in the stability of our foreign-trade policy.
If the United States is to maintain a vigorous and thriving economy and it is to fulfill its responsibilities in helping to strengthen and preserve I freedom and security of this country and other free nations, we most reny strong. There should, therefore, be continued authority under the trade-ag^ me 111 s program to safeguard vital interests of American producers.
The council believes that failure of the United States to support the tn agreements program at this time would have a bad psychological effect t would be a serious blow to world confidence and to the trade relational between free nations upon which rests to a very great extent the ability free peoples to advance their well-being and, at the same time, remain it
Resolution To Congressional Representatives Of World Trade Clue
Denver, Denver, Colo.
The members of the World Trade Club of Denver have approved a resolntj favoring the passage of the Trade Agreements Act of 1958, II K 10368, recommended by the Administration.
The World Trade Club of Denver, which was founded in 1941, has a memti ship of 154 representatives of Denver exporters, importers, and service hid tries. During the past several years the importance of world trade to I Denver area has grown substantially and now is responsible for the empl ment of an estimated 4,500 people, and a dollar volume of business in em of $50 million a year in exports alone.
Some of the reasons our world-trade group favor this program are as folltn
(1) We are convinced that we cannot expect to export goods and serricei the volume we have in the past unless we as a Nation are willing to to; foreign goods. In the event duties are increased on either exports or tape it will tend to reduce two-day trade. We are convinced that the industries represent are in favor of low tariff on imports to the United States and, turn, low tariffs by other countries on our exports abroad. We are ftnt convinced that this can only be accomplished through an extension of the tts agreements program.
(2) A 6-year extension of the reciprocal trade program would be of mate assistance to those who negotiate for the United States in the conference^ GATT and should aid them In securing more liberal treatment for our expd
(3) When the European Economic Community is in full operation, our GA negotiators will need all the assistance available to them in maintaining position in this new common market. The reciprocal trade agreement prop will provide them with an important tool in accomplishing this task. I estimated that over 4% million people throughout the United States dep on world trade for a livelihood. An important number of these people located in the Denver area where some unemployment would result should world trade volume decrease. Rather, we are in favor of increasing vtt trade and its resultant employment, both locally and throughout the Cs. States.
(4) It seems quite obvious to us that Russia's announced intentions tort trate world markets and economies make the current extension of the act perative. We should make it clear to our friends that we intend to contii trading with them, and to buy from them as well as to sell.
It is our recommendation that the Trade Agreements Act, H. R, 103*«. approved with the following provisions:
(1) An extension of the act for a minimum of 5 years.
(2) That there be no crippling amendments which would limit the fre« of the administration to negotiate trade agreements and to accept or r». Tariff Commission findings after appeals to it have been properly investigate!
(3) That quota restrictions be eliminated except in cases where the ^ point has been reached and serious injury threatens an industry. Should port restrictions be approved by the Tariff Commission and administration is our recommendation that they be removed at the earliest practicable date]
(4) That crippling amendments not part of the previous act be eliminntej
Rebecca F. Sabir, Preridew Foreign Traders Association Of Philadelphia, Inc.,
Philadelphia, Pa., June 25,1958. Hon. Harry Flood Btrd,
Chairman Finance Committee,
United States Senate, Washington, D. C. My Dear Senator Byrd: As your committee continues consideration of the Trade Agreements Act (H. R. 12591), our association requests the privilege of informing you of its stand on this legislation.
Established in 1931, our association now comprises 254 firms with 439 individual members. They extend from New York to Wilmington, Del.; and from Reading, Pa., to Camden, N. J. They are engaged in exporting, importing, and allied service activities such as banking, shipping, transportation, forwarding, advertising, publications, credit work, etc.
OUR Record On Reciprocal Trade Agreements
Ever since the establishment of the RTA program in 1934, our association has consisently supported It.
WHY DO WE SUPPORT RTA?
You might say that we are self-seeking, in that the business of our members benefits from the RTA. If we admit such a charge, are we any different from those who seek personal privilege of protection for a specific line of production?
But our reasons go much further. We are a regional group; not an individual industry. Sure, some of our members dislike effective foreign competition in their respective lines of production. But the association went on record at a regular meeting held on November 20, 1957, in support of President Eisenhower's world trade policies.
Our exporting members know only too well that obstacles to the exportation of their products are not infrequently in retaliation for obstacles imposed in the United States to imports of the products of other countries.
Retaliation hurts every country that becomes involved in the act.
IMPORT8 EXCEED EXPORTS IN THE PHILADELPHIA METROPOLITAN AREA
This area is essentially an importing center—petroleum, ores, sugar, woodpulp, etc. Industries in our area presently depend upon imported raw materials for economical operation.
Economical operation of industries nurtured by Imported raw materials provides jobs and payrolls.
We appreciate that you have a difficult choice to make. In the name of commonsense, what justification exists for keeping a high-cost, noncompetitive industry going at the expense of a low-cost, successfully competitive industry? It would be grand if we could have both, but the choice must be made between them. Your consideration of these views Is requested. Respectfully,
Roland L. Kramer,
Resolution Of The Biscuit & Cracker Manufacturers Association On The
Whereas foreign trade is vital and necessary to the economy of the United States; and
Whereas the encouragement of expanded foreign trade should be a fundamental policy of our Government; and
Wheras commerce among nations is most successfully achieved where trade barriers are kept at a minimum; and
Whereas it Is desirable that the executive department of our Government L adequate authority to negotiate reciprocal trade agreements with other natio Now, therefore, be it
Resolved, That the Biscuit & Cracker Manufacturers Association support renewal and extension of the Reciprocal Trade Agreements Act for 5 years y ample authority vested In the President to lower tariffs on a gradual and selec] basis in return for trade benefits from other countries, and further that $ legislation provide for prompt and effective consideration of serious inj cases; be it further
Resolved, That these views be communicated to the proper congressional t mittees signifying our endorsement of this program.
Approved May 14,1958.
Dalzeix Towing Co., Inc., Acext,
New York, N. Hon. Harry F. Byrd,
Chairman, Senate Finance Committee,
Washington, D. 0.
My Dear Senator: I am enclosing herewith several copies of a statemei made before the House Ways and Means Committee in reference to the Til Agreements Extension Act, H. R. 12501, with the request that this statemen filed with your Senate Finance Committee.
I am, of course, primarily concerned with having this legislation passed, in first instance, but, also, deeply concerned about the 5-year extension provi! Indeed, my experience in foreign trade convinces me that the 5-year exten is most necessary.
Very truly yours,
Lloyd H. Dalzh
Mr. Dalzeix. I am grateful for the opportunity to appear before you gentle in support of the Trade Agreements Act extension.
As I have said, I am chairman of the board of Dalzell Towing Co. of New T a business enterprise begun in 1851 by my great-grandfather, which was I and is now primarily engaged in assisting ships of all sizes and all flags is out of New York, the world's major port.
I am also a director and the secretary of the Maritime Association of tie 1 of New York, a member of the board of commissioners of pilots of New York. a member of the shipping and harbors committee of the New York Chamt* Commerce.
So much for my obvious self-interest in the legislation before yon.
However, I hope my interest is broader than mere selfishness. I recently the honor to serve as national president of the Young Presidents' OrganM This group of one thousand two hundred-odd men who became president* of' company before they were 40, today control annual gross business «en'*j totaling over $8 billion. They employ in the neighborhood of 500,000 pt*j They come from every one of the 48 States and the Territories.
With this personal background before you, let me say that I am here to i you in your wisdom to extend the Trade Agreements Act for at least a mlnM of 5 years, and to urge that you provide the tariff-reducing authority to be tainly not less than the 25 percent proposed. Of course, I would further Ilk urjre that you place the absolute minimum of restrictive authority In the U«i tion, restrictions, that is, which are designed to weaken the liberal trade p«i that 1 hope this will represent.
As a New York businessman, I am, of course, vitally interested in the tiw dons volume of foreign trade moving through my port in both directions, n which amounted to over $9 billion in 1957. I can only guess as to the mm of people in the United States who depend on this volume of freight traffic tlieir livelihood, but it is certainly millions.
We in the port of New York district carefully estimate that there an million people living and working here. The importance of trade Is eni by the fact that 1 out of every 4 of these people gain their livelihood dl or indirectly from the port's activities. I know that more than 12,000 entered and left New York in ]!>.". Add to this the number of ships that t the jiorts of New Orleans. Norfolk, Baltimore. Philadelphia, and Boston, and the number of people involved and you will begin to have a slight idea of Impact of foreign trade on one group of American citizens.
It is, of course, even more than that; 50 percent of our imports are duty free and many are absolutely essential to our economy as we know it. On the export aide, many industries, including agriculture, send over 20 percent of their production to foreign markets. Loss or contraction of these markets is instantly reflected in production slowup and unemployment, with consequences reaching far beyond the industries immediately concerned.
In recent months our exports have declined from the high levels of 1957. We have felt the effect in the New York area, and I am sure it is one of the factors contributing to the general business downturn throughout the country. I wonder how much of this decline is due simply to uncertainty on the part of other countries about the future course of United States trade policy?
Surely foreign buyers will be cautious until it becomes clearer whether the United States will continue its long-term program of gradual and reciprocal reduction of tariff and other trade barriers, or whether it will reverse the process and make exports to the United States more difficult.
This attitude would be only prudent. The difference is obviously the difference between a high-level and expanding international trade and a low-level and limited trade.
It seems to me that this committee could give our present economy no better shot in the arm, and, may I add, at less cost to all of us, than to pass this legislation in unamended form. I think the confidence this action would instill in our foreign customers would have an almost immediate effect on our export orders, which would be reflected, in turn, throughout our economy.
History teaches me that we made a mistake in 1930 when, in the midst of a growing depression, we adopted the highest tariff schedule ever. Certainly it is true that immediately after that, retaliatory action was taken against us by other countries and we had a most serious decline in foreign trade, increasing greatly the problem of recovery. In fact, I would think that, since the bottom of the depression was not reached until 1932, this decline in trade deepened and widened its effect and probably helped spread it abroad, too.
Now I am certainly not suggesting that the economic situation today is even remotely comparable to 1930, but I do suggest that it would be shortsighted for us to widen and deepen the current decline in our foreign trade if, by passing this legislation, we can in fact give it impetus.
Now, entirely aside from the economic effect on the country, many witnesses infinitely more expert than I have already testified before the committee, I am sure, as to the grave effects such a failure will have on our foreign policy and on our security policy. We are all aware of Mr. Khrushchev's ominous statement of a few months ago—we heard it a little while ago—"We declare war on you in the peaceful field of trade."
But are we aware of the extent to which many countries of the world are dependent upon trade with us and with each other? If foreign trade comprises 7 percent of our gross national product, do we realize that for countries like France, Germany, and the United Kingdom, it is 3 or 4 times as great; that for the Netherlands, Belgium, Switzerland, it is 5 to 9 times? In the case of many of the underdeveloped countries, exports and imports are a larger segment of the economy than internal trade.
For these countries foreign trade is not only important but absolutely indispensable, and the major task for government and business in those countries is to insure that sources and markets for their foreign trade continue to be available. Moreover, these sources and markets must be expmding if the economic development their populations demand is to become reality. Look at the tremendous effort Israel is making to become a major trading nation.
The Russians are everywhere offering long-term contracts, capital financing, technical assistance. If, through expanding multilateral trade with the West, made possible by gradual reduction of trade barriers, and by a consistent, liberal trade policy, particularly by the United States, these countries can be confident their goals can be achieved in reasonable time, we then can believe that Khrushchev will fail. On the other hand, without this action of the United States we would face the serious danger that many of these countries would feel it politically and economically necessary to entertain the Russian propositions.
About three-quarters of the world is at Btake, to one degree or another. It is the world of our friends, of our military allies, of the political neutrals. We need them all for our economic health and for our security, and it would seem unthinkable that we would knowingly adopt any policy which would force them into the arms of our antagonists. Yet. to turn back the block in our trade legislation may well have that effect, whether or not we intended it.