tions. We refer you to exhibit 1 to our testimony which shows the United States exports of domestic merchandise to Venezuela for the year 1957 by categories and amounts. Those familiar with the various agricultural products, goods, and commodities produced in their States can from this report get some idea as to what Venezuela is using that is produced in their home section. A study was completed in 1955 by Econometric Specialties, Inc., of New York, N. Y., wherein they traced 60 percent of American exports to Venezuela to their source of origin. Their findings, as reflected by exhibit 2, show by city and State some of the various commodities exported to Venezuela. You can well imagine how much greater this showing would be if the 100 percent of our exports to Venezuela were traced to their source for the year 1957 when our market expanded to more than $1 billion. We think it is further noteworthy that Venezuela is our second largest world customer on a per capita basis; this ranks Venezuela ahead of other important customers, such as the United Kingdom, France, Western Germany, and Japansecond only to Canada among all nations. In addition to those who benefit directly from exports of commodities, there are the millions of American stockholders who hold an interest in companies that either engage in business in Venezuela or sell products to Venezuela. Added to this are the thousands of people who participate in shipping and transportation of these commodities, as well as being employed in insurance companies, banks, and service organizations that finance, insure, and service this trade. When we review the specifics of this particular export market-as distinguished from generalized figures-we soon see the widespread nature of the benefits to the citizens of our country from this advantageous market in Venezuela. Now let us examine how Venezuela benefits from exports to the United States. Since oil is the principal export some would infer that only the persons employed by the oil companies are the beneficiaries. This is far from the truth. Since Venezuela is primarily a one crop country, that crop being oil, oil production and refining is the backbone of its economy and this industry directly and indirectly accounts for a substantial portion of the jobs in Venezuela. Such is not the case in the United States with our highly diversified economy wherein the oil industry is only one segment. If oil imports from Venezuela were restricted the principal beneficiaries in the United States would be a part of the independent producing segment of the domestic oil and coal industry, and those who incidentally benefit therefrom. These benefits could at the most only be in proportion to the amount of oil imports restricted. Certainly we can conceive of no one in Venezuela benefiting from restrictions on Venezuelan oil imports into the United States. Without this oil export market and the dollar return therefrom, Venezuela would necessarily have to curb its purchases from the United States, thus affecting thousands of producers and laborers throughout our country. The only possible foreign beneficiary of restrictions on our trade with Venezuela would be those other nations of the world with whom Venezuela may be forced to trade because of curtailment of its American markets. After a cold analysis of these facts and factors it appears to our chamber that from the standpoint of economics any action which would place undue or unreasonable restraint on Venezuelan exports to the United States would in turn decrease our exports to that country and discourage further investment with the result of imposing adverse effects on more Americans, not to mention Venezuelans, than would ever be benefited. The United States has set itself up as the champion of trade reciprocity, increased and liberalized international trade, and private investment, free enterprise development of our neighbors in the Western Hemisphere. Private American investment in Venezuela is some $3,500 million, second only to our investments in Canada. Our experience in Venezuela, where this private capital has operated within a climate of free enterprise and equitable treatment, provides a classic example of the mutual benefits that can be derived from a common sense utilization of foreign capital by a country gifted with great natural resources. The facts and figures amply confirm this. Furthermore, this has all been done within the framework of private initiative, with absolutely no government aid from abroad and in turn no burden to the American taxpayer. Even today Venezuela asks nothing from us other than that we buy from them in order that they may buy from us in other words, they want to do business with us in accordance with the spirit and letter of the trade agreement which exists between the two nations. This is not an unreasonable request. THE NATIONAL SECURITY Apparently most domestic groups who seek protection against foreign imports sooner or later seek to show that such restrictions are not only necessary from an economic standpoint but are also vital to the national security. Most proponents for oil import restrictions are no exception to this rule-as a matter of fact it is the basis for their principal argument and likewise is the basis on which the current system of voluntary quotas is predicated. Let us examine the situation as to national defense or national security as related to oil imports. It is consistently stated that, "there is no security in foreign oil." Apparently those who make these observations are unaware of the historical facts that refute this, in the case of Venezuelan oil, since we have depended upon this oil in the past, during World War II, during the postwar fuel shortage along the Atlantic seaboard, during the Korean war and the recent Suez crisis. Furthermore, we have had the assurance that we could depend upon this oil because of the geographical and historically friendly ties uniting us to Venezuela. At the outbreak of the Formosa crisis, the Venezuelan Foreign Minister stated his country's position: "In view of the problem faced by the free world and in particular the United States of America as a result of the tension created by the situation in Formosa, I would like to reaffirm to our sister nation to the north, in the name of the Government and the Venezuelan people. our sentiments of sincere and traditional friendship, our firm moral support and assure them that the natural and strategic resources of Venezuela, especially the petroleum and iron ore, will be available to the clause which has obliged President Eisenhower to solicit from Congress special powers for safeguarding the ideals of liberty and justice." In spite of historical refutation, if we still assume there is no security in foreign oil, are we also to assume there is no security in foreign bauxite, manganese, tin, tungsten and many other strategic materials which we understand the United States does not possess in enough abundance to wage an all-out war? Should we ignore that Venezuelan iron ore, mined by American companies, is combined with Pennsylvania coal to produce steel in Pennsylvania mills, and would be vital to a future war effort? If we carry their argument that strategic materials from foreign sources will be unavailable in time of war to its logical conclusion, does this mean that we should gracefully surrender now, or does it mean that perhaps we should reasonably conserve our own inadequate resources and supplement them more heavily in normal times from foreign sources? Let us not through legislative mandate jeopardize or in any manner impair the availability of these necessary raw materials from whatever source they must come. WHAT IS THE SOLUTION? This committee is faced with the problem of trying to find a solution or solutions to this problem of how we can balance imports and domestic productivity in such a way as to insure our domestic economic stability as well as our national security. In the process of doing this we are sure that the committee is also concerned with achieving these solutions in such a manner as will minimize, or eliminate if possible, impairment of our foreign trade. This is not an easy task. Admittedly those of us who present our positions to you do so with viewpoints that are flavored in one degree or another by our own interests. Each witness feels that his viewpoint or position is equitable and we are no exception. We recognize that this committee has a difficult task in reconciling self-interest with that which is for the greatest good of our people. We have tried to demonstrate with facts plus conclusions drawn from those facts that a continuation of our previous policies on reciprocal trade have definitely worked, in the case of our relationship with Venezuela, for the greatest good of the most people. We do not profess to be experts on the results of this program as it applies to other nations in the world; however, we definitely have seen its benefits in the Western Hemisphere. We believe that if those policies are continued the ultimate result will be a further expansion of our trade everywhere, and particularly in the Western Hemisphere. We are equally convinced that a deviation from this policy which would produce undue or unreasonable restrictions on the exports from our friends in the Western Hemisphere will not only jeopardize our economy and impair our national security, but of more consequence could set in motion a chain of events that would seriously damage our economic, social and political relations with our foreign friends. By way of specific suggestion on the oil imports issue, we submit the following for your consideration: First, we believe that before any action is taken on oil imports, either by the legislative or executive branch of the Government, conferences should be held with representatives of those countries from which our foreign oil supplies come, with a view toward working out with them amiable and mutual understandings on this problem. We believe that the principal nations involved are sufficiently aware of our domestic problems and we of theirs that we can reach better solutions in this way than if the United States imposes restrictions by unilateral action. Secondly, we recommend that any modification of our trade relationship with Venezuela be made under the terms and provisions of the agreement now existing between the two nations. Thirdly, that in the administration of our trade agreements program the maximum possible consideration should be given to the interdependence of the nations of the Western Hemisphere. We believe that within the framework of these recommendations and suggestions, this nation of ours can continue its expansion of world trade while at the same time preserving for itself and friends abroad economic stability and military security. In closing, gentlemen, we would like to digress from the more specific references to our trade relations and direct your attention to our social, economic, and political relations with the other countries of the free world. At this very moment some of our friends and neighbors are at a crossroads in their struggle to establish a more democratic way of life in both their political and economic affairs. The United States has declared itself a champion of such principles throughout the world and we have dedicated both our economic and human resources to this end. At this critical moment in world affairs we must not foster the interests of those opposed to such principles, which would certainly be the case should our legislative action damage the trade relationship with and in turn the economies of our friends. EXHIBIT No. 1 United States exports of domestic merchandise to Venezuela in 19571 United States exports of domestic merchandise to Venezuela in 19571—Continued [Thousands of dollars] 1. Vegetables food products and beverages: Grains and preparations--. Fodders and feeds, n. e. c.2. Vegetables and preparations, edible. Fruits and preparations-- Nuts and preparations--- Vegetable oils, fats, and waxes, refined_ Sugar and related products_. Beverages and related products Total_ 2. Vegetable products, inedible, except fibers and wood: Rubber and allied gums and manufactures, except special 20, 019 1,375 5,456 8, 686 924 3,047 300 2,965 42, 867 United States exports of domestic merchandise to Venezuela in 1957-Continued [Thousands of dollars] 6. Metals and manufactures, except machinery and vehicles: Steel mill products, rolled and finished.. Railway car and locomotive wheels, tires and axles (rolled Metal manufactures, exclusive of special category 1... Lead and semifabricated forms_ Nickel and semifabricated forms_. Tin and semifabricated forms_. Zinc and semifabricated forms.. Nonferrous ores and semifabricated forms. Total 7. Machinery: * 2 Electrical machinery and apparatus, excluding special cate gories 3 Engines, turbines, and parts, n. e. c.2-. Construction, excavating, mining and oilfield machinery- Other industrial machines and parts_. Office machines and parts_-_ Printing and bookbinding machinery.. Agricultural machines, implements, and parts__. 2, 414 132, 037 762 37 77, 255 1,779 1, 667 168 275 148 11 17 133 25 216, 966 67,050 16, 831 125, 566 2, 785 2, 143 83, 632 3, 054 698 2,885 Total___ 305, 345 8. Vehicles: * Tractors, parts and accessories, except special category 23. 16, 843 106, 789 Aircraft, parts and accessories, excluding special category 23_ Industrial chemicals, excluding special categories 1 and 23. 947 17, 382 22,921 |