Let me say that the really significant factor to be noted is the tremendous increase of our exports of finished manufactures in the last 5-year period as concentrated in this particular field with a relatively small increase in dutiable imports of the same category of goods.

And while we attempt, I maintain, while we attempt to provide a reasonable measure of protection for industries that might be in difficulty, there, as I see the picture, is an obligation to give a measure of protection to the $8 billion of finished manufactures made in the plants, mills, and factories of this country.

In somewhat more detail let me now refer to several charts depicting trends of the last 5 years in exports and imports of particular types of commodities and for this purpose I am choosing examples from industries whose products are both exported and imported on a significant scale.

I am including several industries whose spokesmen have been known to complain publicly about competitive imports, even though their products are exported in much larger volume than they are imported. As I look at the figures I wonder, as I have often wondered in the past, if such spokesmen are bearing in mind the stake which their own industries have in the maintenance of export markets, and if they realize how much they themselves might stand to lose should the United States follow shortsighted policies leading to shrinkage of our markets abroad.

Let us look, for example, at our chemical trade. In 1953, we exported about $900 million worth of chemicals and allied products. At about this time the chemical and allied-products people-many of them, not all, but many-looked at the future with dire foreboding if this trade policy were maintained in being. In 1953, we exported about $900 million worth of chemicals and allied products and imported some $450 million worth.

Now our exports of chemicals have risen continually since 1953, and total in 1957, $1 billion, 70 percent above the 1953 levels, while the imports have held steadily at or below the level of 1953, and this does not strike me as the record of an industry in dire jeopardy from import competition.

Rather it suggests an industry with a vital stake in keeping as clear as possible its channels to export markets.

One of the most important single classes of United States exports is industrial and business machinery. These exports have risen from $1,700 million in 1953 to more than $2.6 billion today, in 1957.

Imports, although acquiring some consequence in the past decade have risen much less since 1953, from $150 million to $280 million a year.

Similarly, while imports of iron- and steel-mill products have held steadily at roughly $200 million between 1953 and 1957, over the same span exports of steel products approximately doubled, moving from about $560 million to more than $1,100 million.

Still another industry in which our exports have grown rapidly is paper manufacturing.

Exports of paper and paper products have risen by more than 60 percent since 1953.

To be sure, our imports of paper and paper manufactures, exclusive of newsprint for which we rely chiefly on foreign supplies, have risen

by a similar percentage but they remain less than one-third as large as the corresponding exports.

Now let us look at cotton textiles, where the trade picture does not seem as good as some of the others.

Imports of cotton manufactures doubled from $73 million in 1953 to $154 million in 1956, and amounted to $136 million last year.

Over the same interval, exports of cotton manufactures have declined somewhat from $272 million in 1953 to $253 million in 1957. But we should not lose sight, I think, of the overall picture in which United States cotton textile exports remain nearly twice as large as the imports.

Actually in cotton cloth last year the exports were $148 million, and the imports $35 million.

And imports such as they are, still rank only between 2 and 3 percent of domestic production.

Now in this connection, I would remind you of our recent efforts in bringing to the attention of the Japanese the implication of the very rapid rise in United States imports of cotton textiles which was under way a few years ago.

The Japanese decided to limit their exports of such products to us, and I believe that this voluntary action on the part of Japan has worked well in the interests of both countries.

In a world as complex as ours, in which a variety of factors affect trade, it is difficult to isolate the effects on trade of any one influence. It is clear that many things in addition to the reciprocal trade agreements program have played a part in these favorable developments which I have described.

But while it would be incorrect to attribute these advances solely to the reciprocal trade agreements program, it is, as I have said before, downright wrong to condemn a program under which such spectacular strides have been achieved.

We may not be able to measure precisely the part played by the program in expanding our exports, but these were the rules under which the game was played while our trade was making such outstanding progress from 1953 to date.

In the light of the results how can one say the rules are bad?

Let me now describe very briefly the specific proposals contained in the bill you are considering.

First, it is proposed that the President's authority to enter into trade agreements be extended for 5 years, from June 30, 1958, through June 30, 1963.

As I will explain in detail later, a 5-year renewal of negotiating authority is needed primarily to enable us to help maintain and further develop our trade relations with the European common market.

We sold over $3 billion of American products to the common market countries in 1957, and it is important to American industry and agriculture that the new common market duty rates be as low as possible.

The United States needs to undertake careful and exhaustive preparations and conduct detailed_negotiations with the common market; and in order to do so, the President must be provided with sufficient authority.

It is further proposed that additional authority be provided to reduce duties in carrying out trade agreements entered into between July 1, 1958, and July 1, 1963.

This would consist of authority to reduce individual rates of duties to a point not below the lowest rate resulting from applying any one of the three following methods:

(1) Reducing the July 1, 1958, rate by not more than a total of 25 percent. The President would be authorized to make reductions gradually over a period of time in not more than five annual stages. Ten percent of the rate would be the maximum reduction which normally could be put into effect for the first time in any one year. (2) Reducing the July 1, 1958, rate by not more than 2 percentage points. Such reductions would also have to take effect by stages, not exceeding 5; and no reduction of more than 1 percentage point normally could be made effective in any 1 year. This alternative authority would be significant in the case of rates of less than 8 percent, where 2 percentage points would be a larger reduction than the maximum reduction under the first method.

(3) Reducing, as is presently authorized, an existing rate which is above 50 percent ad valorem down to 50 percent ad valorem. Here, too, reduction would have to be made gradually by stages. This alternative authority would be significant in cases of rate over 66% percent, where it would permit a greater reduction than under the above first alternative method.

It is proposed not only that the peril point and escape clause procedures and other safeguards for American industry and labor in the present law be continued, but also that the safeguards be strengthened. Specifically, it is provided that:

The Tariff Commission would be given more time-6 months instead of 120 days-in which to complete peril point investigations and reports.

Tariff Commission investigations and reports in escape clause cases are to be completed in 6 months instead of the 9 months allowed by the present law.

The Tariff Commission would be given the power of subpena as needed to acquire information relevant to its trade-agreement responsibilities.

The President would be given greater authority to raise duties. He would be authorized to raise duties as much as 50 percent over the rates which existed on July 1, 1934. This represents a significant change from the present law, under which the President now has authority in escape clause cases (1) to terminate the trade agreement concession, with the result that usually the rate established by the Tariff Act of 1930 then applies; or (2) to increase the duty by as much as 50 percent over the rate existing on January 1, 1945.

Since on many items the 1934 rates were substantially higher than the 1945 rates, this change would increase the extent to which duties on such items could be raised where necessary to avert serious injury to domestic industries.

The President would be authorized, in escape clause cases, to impose duties of up to 50 percent ad valorem on duty-free items which have been bound in trade agreements.

The eligibility of organizations or groups of employees to file application for an escape-clause investigation would be made explicit.

When the President disapproves in whole or part a Tariff Commission recommendation in an escape-clause case, effect would be given to any part of the recommendations which has not been made effective if there is approved, within 60 days of the submission of the report of the President's disapproving action, a concurrent resolution by a two-thirds vote of both Houses of Congress.

Any such resolution would be privileged in order to expedite congressional consideration.

It is also proposed that the law provide for more prompt and effective consideration of serious injury cases, under these circumstances: The Tariff Commission shall promptly institute an escape-clause investigation, if in the course of a peril-point investigation it finds that an increase in the existing duty or additional import restrictions is required to avoid serious injury.

Finally, it is proposed that the national security amendment be changed to specify certain of the factors which are to guide the Director of the Office of Defense Mobilization and the President in considering whether imports are threatening to impair the national security. In addition, certain procedural changes are made in the consideration of national security cases.

The bill specifically directs the President to include in his annual report on the operation of the trade agreements program a statement on progress made in removing restrictions maintained by other countries on imports from the United States and states that it is the sense of Congress that the President shall seek information and advice from representatives of American industry, agriculture, and labor during the course of negotiating trade agreements.

I want to say a few words about safeguards protecting American industry.

While stressing the desirability of an expanded foreign trade, and our need in this connection for the authority conferred by this legislation, I want to stress with equal force my belief that when we work for increased trade we have a clear duty to see to it that we do not grant tariff reductions which cause serious injury to individual segments of American business.

I believe the safeguards contained in the present legislation, as significantly reinforced by H. R. 12591, fully meet this essential need. There are two broad types of problems against which we all agree safeguards are needed. The first is the possibility of serious injury to individual industries or segments of industries. This is the problem of commercial injury.

The other is the possible threat to our national security-the risk that imports might interfere with production we need for national defense. These are two different problems and the safeguard provisions are similarly distinct.

Our safeguards against commercial injury are of two kinds. Onethe peril-point procedure is designed to identify such problems in advance and avoid making tariff concessions which will threaten commercial injury. The other is a remedial provision-the escape clause designed to give individual firms and industries a procedure for seeking a remedy where concessions do as a result of unforeseen circumstances create such injury.

And as I noted at the beginning of my remarks, the bill you are considering strengthens significantly both the peril-point and the escapeclause procedures.

There has been some feeling that the limitation of tariff increases to 50 percent above the 1945 rate might in some cases make such relief inadequate. Too, there has been fear that the inability under present legislation to impose duties on duty-free items might work hardships on certain industries.

It is in recognition of these situations that the bill before the committee proposes that the level to which the tariff could be raised in such cases be substantially increased by raising the ceiling to 50 percent over 1934, and that duties of up to 50 percent ad valorem could be levied on duty-free items. These changes would importantly enlarge the relief available under escape-clause procedure.

As for the national security provision, which is spelled out in more detail in this bill than previously, here the coverage is even broader than in the case of the commercial injury escape clause.

The President's authority extends to imports of all items, whether or not they have been subject to a tariff concession. Here the President's authority is all inclusive-the adequacy of the remedies available is self-evident.

The President's action on crude-oil imports-and I may parenthetically say that I was, have been, and am now Chairman of the President's Committee to make recommendations respecting this general situation-the President's action on crude-oil imports and more recently on imports of unfinished gasoline evidence the fact that the provisions of the statute are available and are invoked when occasion requires. There has been criticism of the operation of the escape-clause provisions, so let us examine the record to date.

The fact is that most unsuccessful escape-clause applicants failed to obtain action because they did not make a case for injury in their appearance before the Tariff Commission.

Since the institution of escape-clause procedure of the 87 cases filed with the Tariff Commission, 54 cases were either dismissed at applicant's request, terminated without finding or rejected by the Commission. Three are still pending.

The remaining 30 cases were sent to the President with a recommendation for action.

These 30 cases which were presented to the President by the Tariff Commission involved 26 commodities.

Of the 26, 2 are still pending; and of the remaining 24, the President has taken action in 12-in 10 by accepting the Tariff Commission recommendations and in 2 by other appropriate means.

It is indeed a tribute to the operation of the Trade Agreements Act that while we have made concessions on about 3,000 items that move in world trade, over a 5-year period only 26 commodities reached the President's desk under escape-clause procedure.

In each case where he decided not to invoke the escape clause, the President documented fully and publicly his reasons. In some cases the President concluded that serious injury as a result of imports had not been demonstrated; in others, that the proposed tariff increase would not remedy the situation in any significant way.

While basing his decisions primarily on these considerations, the President-whose responsibility it is to conduct the foreign relations of the United States-obviously also had to weigh the effects of particular actions on our relations with other nations, on our alliances, and on our military security itself.