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We must also be fully aware that a lapse of the Trade Agreements Act w be a warning to our trade partners that the United States Is about to re to protectionism in its commercial policy. The result would be a vicious t of growing restrictions against American exports around the world, wil seriously adverse effect on our economy. This result wonld, in all probafcl also be the case, should the basic Trade Agreements Act be seriously weaiq

Another reason why a weakened and debased Trade Agreements Act n{ have calamitous consequences for the United States Is due to the real thra the commercial warfare promised by Khrushchev. We cannot take li| Khrushchev's boast that he is declaring war on the United States In the of commerce, or, as he put It, "We declare war on you in the peaceful fid trade."

We may not be able to counter every move the Soviet Union makes to » away from the family of free nations those who are less committed, or prosperous, or weaker. But we can give our trading partners a better «p : unity to earn their way, with less reliance on financial aid from us, am can show them the promise of a better tomorrow by permitting them a chance on the market place.

We wish to give our support to the extension bill now before you, beU>*ii to be the very minimum program to preserve the gains made in freeing trade from unnecessary barriers.

We continue to believe that it would be highly desirable, and even essentii achieve stability for United States trade policy by extending the basic T Agreements Act not for a mere 5 years, but to provide for an extension ft years. Such an extension would be most dramatic proof that we accept Kb? chev's challenge In a field of warfare that America knows best. It would pmrt our trading partners in the free world that American leadership in world :i was not being abandoned, but reasserted in a most constructive way.

We should point out that a long-term extension of the Trade Agreementa is also In the interest of American traders and producers. We cannot eaj size too strongly the need for stability In our trade policy so that the basu man can engage in long-term planning. Only by having a set of rules t^ not changed every other year can the real productivity and real efficient come effective for the American trader and manufacturer. The frequeci views and changes In the Trade Agreements Act, through the recent past I been a hardship for our trading partners as well as for American fat traders.

We do not agree with the provision permitting the increase of tariff ratd the 1934 base rather than the 1045 base as at present. No need has been m strated for tariff-Increase authority on such a sweeping scale. It would li duce an element of even greater instability in United States tariffs than recently been the case.

We can see little reason for providing, In the bill now before your comnri for the institution of an escape-clause investigation following a finding by Tariff Commission In a peril-point investigation that a given tariff rate cause injury to domestic producers. Since, under present legislation, a req for an escape-clause investigation is the right of any industry sufferin, threatened with injury, this new provision can only bring up the question," did not the affected industry request an escape-clause investigation on ib< behalf?"

In our view, the Trade Agreements Act, both in design and execution, sty be regarded as being in the national rather than specific interest. For thi* son, we are firmly convinced that the safety features which are now part d legislation, such as the escape clause, should be so administered that it tinues leaving the determination of facts up to the Tariff Commission, executive branch, on the other hand, should retain authority to accept or R Tariff Commission recommendations which are based on narrow standard judgment No one agency, such as the Tariff Commission, Is now or ghooli in the future charged with determining what Is in flu- national Interest-J possible overriding considerations of national security, of foreign polky. orq lations with specific countries can only be determined by the administrate* a whole. Thus, the President must continue to be allowed to consider the tional Interest in accepting or rejecting recommendations based on Mjj criteria. The amendment proposed In H. B. 12591 Is, In our view, an anfori ate step backward in creating new instability In our trade policy.

Furthermore, we feel that the Tariff Commission must be charged, io ila cape-clause investigations, with requiring proof that the claim of *etu»i threatened injury is based on competitive imports being the major cause, not merely a contributing factor, to such alleged injury. Nothing is more destructive of good will and respect for United States policies than the use of escapes economically unjustified and morally wrong.

The Trade Agreements Act is no longer an antidepression measure, as it was when first passed by Congress. It has become an important instrumentality of United States commercial policy. Its impact is worldwide, for good when forcefully extended, or for barm when hedged about with restricting amendments.

To us, here at home, it means faith in a dynamic economy strong through diversification and technological development. To our friends abroad, it has taken on a meaning of American maturity and leadership in a field In which we have excelled, in production and trade.

Let us not jeopardize the important stake that American business, industry, and labor have in an expanding foreign trade and the better availability of the foreign resources that we need for industrial production. We need this legislation, also, because it is evidence of a necessary faith in the visibility of our dynamic economy.

Thank you, Mr. Chairman.

Senator Frear. Mr. Richard Revnes, Chicago Association of Commerce & Industry. Have a seat, Mr. Revnes.

STATEMENT OF RICHARD REVNES, DIRECTOR OF SERVICES, CHICAGO ASSOCIATION OF COMMERCE & INDUSTRY

Mr. Revxes. Senator, my name is Richard Revnes. I am director of membership services for the Chicago Association of Commerce & Industry, which is, in fact, the chamber of commerce for the Chicago metropolitan area.

In light of the short time, I shall enter the written statement for the record, and briefly comment on a few of the paragraphs stressing the importance of foreign trade, both to Chicago and the Midwest.

Senator Frear. Without objection, your statement will be made a part of the record.

Mr. Revnes. Thank you, sir.

I should, further, like to state the association's position in regard to H. R. 12591, and make a final statement and remark on a personal note.

The Chicago Association of Commerce makes the following recommendations with respect to H. R. 12591:

1. That the act be renewed for the period of 5 years proposed in the bill before you. It is our considered opinion that 5 years is the minimum time necessary for the United States and United States businesses to develop a policy and carry out negotiations, particularly with the important new European Common Market.

2. That the President be granted authority to reduce tariffs on a gradual and selective basis, in return for concessions by other countries, as provided for in H. R. 12591.

Recently, we have undertaken a survey to determine the exact extent of the exports emanating from the Midwest. We are still analyzing the ample of our survey, which has been entered also as a part of the record, and according to projections which we think we are now able to make based on the validity of the sample, we estimate that there are some 4,500 to 5,000 companies in the area, the Midwestern area indicated on the map of the survey, which are actively engaged m exporting.

It is interesting to note that 557 firms or 9 percent of the tots] the questionnaires sent out have answered, and that they have in cated that their volume of exports is about $900 million.

Projecting this figure for the total of the sample, we estimate t the total in these areas, which are not the total of the Midwest tually, but only a portion of the Midwest, represent about $7.1 bill of exports.

There has been a recent survey, just completed, by the Unii States-Japan Trade Council, which reports that five States of Hlir.i Indiana, Ohio, Michigan, and Wisconsin accounted for $309 mil! •worth of sales to Japan alone in 1957, and that these five States' i ports to Japan surpassed all other regions of the United States.

I think it is understandable, the concern of the manufacturers a workers of the Midwest, that Japan is in a dollar-short position •: to its $600 million imbalance of trade with the United States in much as we sell so much to Japan.

Preceding witnesses have presented in detail testimony that renf. of the Reciprocal Trade Agreements Act in an effective manner if sential to our national economic and political interests; that the ji provided by our exports, and imports of needed commodities, far « number those adversely affected by the importation of a comparativ small amount of competitive foreign goods.

The reciprocal trade agreements program is a basic cornerstone our foreign economic policy. The Chicago Association of Coinnie and Industry, therefore, strongly urges that the act be extended in effective form.

H. R. 12591, providing for a period of 5 years and negotiated ciprocal duty reductions, but with provisions for defense essential protection and relief from undue import competition, should passed without amendment.

This, we believe, is in the best interest of not only our member^ a area, but of the entire United States.

I should just like to enter for the record, if that can be done, tin have completed just recently a 35,000-mile trip through almost all Western Europe and South America. I have met with literally hi dreds of government trade officials and businessmen in these >:o\ tries, and I have found without exception that both the countries a the businessmen are eager to buy more goods from the United Stat notwithstanding Senator Long's concern over the high cost of < production in this country.

Only a small percentage of the cities and areas which I visii are industrialized at all. They need plant investment, capita' vestment, in very large amounts, and a conservative estimate Wol place their need at about on an annual trading basis of $35 bill! of purchases from the United States, within the next 5 years, if can get around to negotiating our reciprocal arrangements with thi countries on an effective basis and in an effective manner.

That is my statement.

Senator Frear. Is that on a United States cash basis?

Mr. Revnes. Yes, sir, on a United States cash basis.

Senator Frear. Senator Bennett?

Senator Bennett. You mean $35 billion a year, or $7 billion'

Mr. Revnes. Yes, sir, $35 billion a year during the next 5-year period. The capital investment need for these countries, as Mr. Percy pointed out, is very great. They recognize the need for development to compete in world markets, because low-cost labor does not necessarily make them competitive in a world market as well.

Senator Bennett. Thinking hi terms of American capital investment, or are they thinking in terms of trade?

Mr. Revnes. They are thinking in terms of trade, but purchase of American capital goods. They are very anxious to make licensing arrangements where possible; and if protection can be given to the American manufacturer so that his patents can be protected internationally and the copyrights of his products, I think American businessmen are 'willing

Senator Bennett. Do you think the people of Chicago would be as interested hi continuing the reciprocal trade arrangement if their share of the domesticaly produced products had to be wiped out of the market in order that the trade abroad might be stepped up to $35 billion?

Mr. Revnes. I think that almost all economic activity, Senator, is predicated on enlightened self-interest, and I believe that American businessmen are ingenious, as Mr. Percy has said, and also as resourceful as the need arises. I believe it is within the Midwest's most enlightened self-interest today to be a great advocate of international or foreign trade.

Senator Bennett. Let us be specific a minute.

We do not have an increase in our gross national product of $35 billion a year, and if these people expect to step up their trade with us by $35 billion, then obviously the American production sold in the American market must be diminished by a very large part of that amount of volume.

Mr. Revnes. Well, I cannot agree on that, sir.

Senator Bennett. Tell me why.

Mr. Revnes. I cannot agree the economy is not expanding enough to take care of an additional billions of dollars of exports without handicapping the expansion of the domestic market.

Senator Bennett. Let's be reasonable. Our domestic market is not expanding $35 billion a year.

Mr. Revnes. I do not say in 1 year we can expand, but in a period of 5 years of good negotiations, reductions of tariffs on a negotiated basis, I think we can increase our trade with the rest of the world to a total of about $35 billion.

Senator Bennett. Then you are reversing your position, you are reversing your answer to my first question. I asked you if they wanted $35 billion a year or $35 billion over 5 years, and you stated $35 billion a year.

Mr. Revnes. I misstated my position, I am sorry.

Senator Bennett. Thank you, Mr. Chairman.

Senator Frear. Thank you, Mr. Revnes.

Mr. Revnes. Thank you.

(Mr. Revnes' prepared statement follows:)

Statement or Richard Revnes, Dibectob Of Services, Chicago Association or Commerce And Industry

My name is Richard Revnes. I am director of services of the Chicago Association of Commerce and Industry. I appear on behalf of the association to present its views on H. R. 12591, the bill to renew the Reciprocal Trade Agreements Act.

The Chicago Association of Commerce and Industry is a voluntary organization of individuals, firms, and corporations, organized and existing under the laws of the State of Illinois. It has 6,106 member organizations. Through committees and a professional staff of more than 100 individuals, these member organizations work together to improve the Chicago metropolitan area's commercial, industrial, and civic operations. Although the name of our organization is the Chicago Association of Commerce and Industry, it functions as the chamber of commerce for the Chicago metropolitan area.

The Chicago metropolitan area has been designated as such by the Bureau of the Census, United States Department of Commerce, and comprises an area including 5 counties in Illinois and 1 county in Indiana. In this area are included, in addition to Chicago, approximately 180 suburban or satellite communities, among them such important industrial towns and cities as Gary, Hammond, Aurora, Elgin, Cicero, Skokie, and Waukegan.

Within this area are located 14,000 manufacturing establishments, in which a total of about three million people are employed. The population of the area is approximately 6,400,000. The Chicago metropolitan area is comprised of 3,617 square miles, an area larger than the combined States of Delaware, Rhode Island, and the District of Columbia.

The Chicago Association of Commerce and Industry endeavors to promote the growth and stability of business in the Chicago metropolitan area and improved legislation that forms the framework within which the area's business operates.

The association was founded in 1904. Funds to carry on its operations come from voluntary membership dues paid by Chicago business firms and professional men and women. About 1,600 members serve on a wide variety of permanent or special committees. Each committee is composed of persons chosen for their standing in the community and for their wide knowledge in some particular field of business or civic endeavor. Specific examples of this committee activity are the work of the world trade committee, the Canadian-American trade and industry commitee, the transportation committee, the harbors and waterways committee, and the aviation committee.

As set forth in the 1957-58 annual report, committee directory submitted with my written statement, the committees, officers, and directors of the association represent a broad cross section of the area's commerce, industry, and civic organizations.

The association has supported the reciprocal trade agreements program since its inception, being among the first two chambers of commerce in the United States to record that support. Upon the occasion of each previous renewal of the Reciprocal Trade Agreements Act, the association committee concerned, and the association's board of directors, have considered the legislation proposed and have reaffirmed support of the program.

In arriving at our decision to support the Reciprocal Trade Agreements Act, due consideration is given to the widely varied and sometimes conflicting interests of our membership. The consistency of the actions of our committees and boards of directors, representing widely divergent interests, over the period of the last 25 years, demonstrates, I believe, that our support of this legislation is sound and reflects the thinking of the majority of the association's membership. The most recent reaffirm;! I ion of this association's approval of the reciprocal trade agreements program was by the unanimous vote of our board of directors.

The Chicago Association of Commerce and Industry makes the following recommendations with respect to H. R. 12591, which would extend the Reciprocal Trade Agreements Act:

1. That the act be renewed for the period of 5 years proposed in the bill before you. It is our considered opinion that 5 years is the minimum time necessary for the United States to develop a policy and carry out negotiations with the important new European Common Market

2. That the President be granted authority to reduce tariffs on a gradual and selective basis, in return for concessions by other countries, as provided for in H. R. 12591.

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