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For the reasons here Indicated I wish to urge the committee to approve H. K. 10368 for the full term of 5 years and with tariff reducing authority of 25 percent. Nothing less will do.
Thomas B. Mccabe, President.
Hon. Harry F. Bybd,
Chairman, Senate Finance Committee,
Amsinck Sonne Corp., A'eic York, N. Y., June 25, 1958.
Statement In Support Of H. R. 12591, Trade Agreement Extension Act Of 1958, And Of A Liberal Foreign Trade Policy In General
This statement is respectfully submitted on behalf of the undersigned affiliated corporations:
Amsinck Sonne Corp.,
We (the undersigned corporations or their immediate predecessor corporations) have been engaged in foreign trade since well before the beginning of this century; in fact, one, American Trading Co., Inc.. had the good fortune of celebrating its 100th anniversary in 1957.
The dollar volume of trade of the undersigned in 1957 was over $50 million. Approximately 300 persons employed by us are dependent for their livelihood on the activities and the prosperity of the undersigned corporations. Our immediate, and if you wish, selfish interest in a flourishing foreign trade therefore needs no emphasis. Moreover, our active business relations over theso many decades with practically all parts of the inhabited world have given us ample opportunity to realize the vital importance of an active and successful foreign trade in the development of friendly relations between peoples. Weare firmly convinced that nothing contributes so much to this development as does foreign trade where both parties hope to, and actually do, gain naturally mutual advantages.
We, the undersigned, for many years concentrated largely on export trade, but some years ago we became convinced that such one-sided business cannot in the long run remain viable and we made determined efforts to develop the import side of our business. By much work and the assumption of risks, which then seemed unfamiliar to us, we have succeeded in building up considerably the volume of our imports. We have found many types of imports welcomed here and readily accepted at present domestic price levels. Our experience has been that as the result of import activity our prestige and business vantage point have been considerably enhanced in those countries from which we import, and this in turn has been reflected in our ever-increasing volume of exports.
While, as you realize, the ratio of foreign trade to the gross national product is a very large one in most of the countries with whom we conduct foreign trade, this ratio in the United States is comparatively small, seeing that imports amount to approximately $12 billion, and exports to about $20 billion, as against our gross national product of around $430 billion. The fact that exports are close to double the amount of imports shows the urgent necessity of increasing the latter, and the very small percentage of imports in relation to gross national product (about 3 percent) would tend to show that imports can be increased without adversely affecting the national economy as a whole.
The steadily growing productivity of our farms and industries will make it increasingly desirable, and in fact necessary, in spite of the growth of our own population, to export more and more of our goods if we want to produce profitably. In order to sustain such an increasing volume of exports it will become necessary to increase imports by buying not only such goods as cannot be or are not grown or manufactured in this country, but also goods, agricultural as well as manufactured, which are grown and manufactured abroad more cheaply or better than in our own country.
We especially urge approval of the 5-year extension of the act provided in the House bill 12591, since obviously the granting of a longer period within which the President can use his authority to negotiate new liberalized tariffs will l<lace the administration in a better position to encourage expansion of exi>ort and import trade.
In this connection we note that the proposed strengthening of existing safeguards for domestic industry by giving the President power to raise tariffs 50 percent above those prevailing in 1934 seems to run countercurrent to a policy of liberalizing tariffs. Perhaps, in lieu of this clause, provision should be made whereby an industry, firm, organization, or individual, which could prove an actual injury, could api>eal to the Tariff Commission for relief, and such relief in deserving instances would be given in the form of indemnification by grants, loans, and technical assistance over a limited period of time in order that the firm or industry could diversify its products and shift its productive capacity to more prosperous lines.
Ambinck Sonne Corp.,
American Trading Co., Inc.,
Giij-espie & Company Of New York, Inc.,
Statement Of Minneapolis Chamrer Of Commerce Regardi.no Extension Of
Trade Agreements Act
It is a rare occasion when an association can speak for such a large percentage of its membership as can the Minneapolis Chamber of Commerce in the matter here under consideration. In a wide expression from our membership, there has been nearly 100 percent approval of the 5-year extension of the Trade Agreements Act.
Minnesota in general and Minneapolis in particular have a great stake in world trade. In 1957, over 250 Minnesota firms exported in excess of $50 million worth of merchandise to 40 countries. Some 25.000 families in Minneapolis and over 50,000 families in Minnesota depend on imports and exports for their livelihood. In addition to over $50 million in export business, it is estimated that Minneapolis industry imports some $25 million in raw and finished products. These figures, as impressive as they are, do not reflect the indirect exports. For example, a battery manufactured in Minneapolis and installed in the 1 out of 10 Minneapolis Moline tractors which finds it way to some far-off point on the globe.
In January 1958, over 131,000 or about 63 percent of the total number of Minnesota workers of manufacturing industries were employed in the major industries producing goods which the United States exports in greater quantities than it imports.
Over one-fifth of Minnesota's income is from agriculture and the farmer can by no means ignore this issue. Products of an estimated (50 million acres of farmland are sold abroad each year. This means that vast quantities of foodstuffs are taken off of the American market, where there is already a surplus, and supplies the requirements of nations abroad.
Foreign trade is a two-way street. For Archer Daniels Midland, one of our members, the two-way street works this way: Wheat for India, and whale oil from Peru; coconut oil from the East Indies and soybean oil for Norway; chemicals and foundry supplies from Spain and Italy and resins for the Congo. Mr. T. L. Daniels, their president, recently stated that, "foreign trade is vital to Archer Daniels Midland with its 150 plants and elevators scattered throughout the United States, and to our employees and our farm suppliers. From abroad we must obtain the materials which we cannot produce as economically in this country and must sell abroad the products of our factories and the produce of our farms. In a sense, we are the salesmen for the American farmers and workers."
Harry Bullis, chairman of the board of General Mills, recently stated that General Mills exports flour throughout the world to some 90 countries. Livestock feeds are exported to Mexico, Central America, Cuba. Dominican Republic, Venezuela. Trinidad. Netherlands West Indies, Jamaica, El Snlvalor, British West Indies. Puerto Rico, Hawaii, and Alaska.
In connection with the European Common Market which has already become a reality in January 1, 1958, Mr. A. B. Sparboe, a spokesman for Minneapolis industry, had this to say: "United States exports to the six European Common Market'countries are running about $3 billion a year. Our private direct investment in thase countries already totals over $1% million with new direct
investments (excluding reinvestment) taking place at an annual rate of abo« $250 million. A threat of being shut out of traditional European markets b high tariffs is of acute concern to United States businessmen."
Our people have a firm grasp of world affairs and the special place tM country has been given in the shaping of world destiny. With some of the grw nations of Europe moving toward freer trade and elimination of trade barrier they fail to see how an intelligent Congress could possibly cast the Unite States in the role of a protectionist, isolationist country, unable and afraid t compete in world markets.
This country has for many years pointed with pride to the free trade betwee States, and we have said, in so many words to the Old World, "This is howl do it; this the way to prosper and to raise your standard of living." Were" to tighten our trade policy at this point it would be an about-face admissH that we were wrong, that the way to maintain full employment, prosperity, an a high standard of living is not free trade but more rigid trade restrictions an higher tariff walls.
We feel strongly that the course which will be for the good of America clearly defined in this issue. We urge the Senate of the United States the Trade Agreements Act for 5 years without crippling amendments.
Statement Of Tobacco Associates, Inc., Submitted Bt J. B. Hutbos,
Within the past 4 months Tobacco Associates has held two meetings at whu the reclprocal-trade-agreements programs have been discussed. The first < these meetings, which was held in Raleigh, N. C., on March 4, 1958, was tt annual meeting of the voting membership. This meeting was attended by aroua 400 leaders who represent about 400,000 tobacco growers In the States of W ginia, North and South Carolina, Georgia, Florida, and Alabama, over 100 ca porations engaged in the exportation of United States tobacco, and the anctic warehousemen, fertilizer manufacturers, merchants, and bankers in the to cured-tobacco-producing States.
A considerable part of the time at this meeting was devoted to a discussion < the progress of our trade-agreements program. At this meeting the folloirti resolution was adopted unanimously:
"Whereas the flue-cured-tobacco farmers of the United States depend on fo eign markets to utilize about one-third of their normal production; and
"Whereas the amount of United States flue-cured tobacco which can be soldi foreign markets is often limited by the ability of our foreign customers to obt* the necessary dollar exchange to purchase their requirements; and
"Whereas the foreign-trade policies of the United States have a direct eff* on the availability of dollar exchange in most foreign countries; and
"Whereas the reciprocal-trade-agreements program of the United States 1 the past quarter of a century has been one of the most important parts of o foreign-trade policy and during this time has provided world leadership in establishment of fair and equitable foreign-trade rules and procedures; and
"Whereas the legislative authority for the operation of the reciprocal-trad agreements program is scheduled to expire on June 30, 1958; and
"Whereas the United States Congress is now considering a bill, H. R. 103d which would extend such authority for an additional 5-year period: Now, tliet fore, be it
"Resolved, That we, the membership of Tobacco Associates, Inc., represent)! the producers, warehousemen, and leaf exporters of flue-cured tobacco, and tl bankers, merchants, and fertilizer manufacturers in the flue-cured-prod«d« nren, do hereby recommend and urge the Members of Congress to enact sue legislation as is provided in H. R. 10308."
On April 14, 1958, also in Raleigh, N. C., the second meeting was held for tl express purpose of bringing to the attention of the public the importance at necessity of continuing the trade-agreements program.
The general consensus at this meeting was that a continuation of our reciprooi trade-agreements program was not only of tremendous Importance to the futn well-being of United States tobacco producers and exporters, but also from tl standpoint of promoting n high level and healthy international trade and thi such a level of international trade is imperative If the free world is ultim»tel to win in its struggle with communism.
We, therefore, respectfully urge the membership of the Senate Finance Committee, as well as that of the Senate, not only from the interests of the United States tobacco-producing and exporting industry, but for the general welfare and well-being of all citizenry of the United States and the world, to enact a Trade Agreements Extension Act which will permit a continuation of our reciprocal-trade-agreements program for a 5-year period. Such legislation is provided in the House-passed bill, H. R. 12591.
Statement Of Ernest Falk For The United States National Fruit Export Council, Re Trade Aoreements Act Of 1958
This statement is submitted on behalf of 11 organizations representing the major part of the fruit industry of the United States.
The council membership includes the California Grape and Tree Fruit League, the California citrus industry organization, which includes Sunkist Growers, Inc., American National Growers Corp., and Pure Gold; the Canners League of California; the Dried Fruit Association of California; the Northwest Horticultural Council; the Northwest Canners and Freezers Association; the Texas Citrus Growers and Shippers Association; the Florida Citrus Mutual; the Florida Canners Association; the International Apple Association; and the National Apple Institute.
More than 80,000 growers are represented in this membership, in addition to our shippers and processors; the acreage in orchards and vineyards is approximately 3 million, with an aggregate annual production averaging nearly 17 million tons of fruit. The farm value of our crops is estimated at $1.2 billion, and a retail value after packing, storing, processing, transportation and distribution, of near $4 billion. Every part of this industry is directly or indirectly concerned and affected by our foreign trade situation.
In so widespread and diverse an industry, naturally we have a range of views and opinions on many problems. But we are up against one overriding problem in foreign trade. We have joined together to ask the committee and the Congress to consider and act upon it.
We are agreed in support of the extension of the Trade Agreement Act, not because we are satisfied with the way it has been administered in respect to our fruit problems, but because we believe it can be made to work, and it is urgently Important to us that it be made to work. We ask your help through an operational amendment for that purpose.
Our overriding problem is to obtain removal of discriminatory trade restrictions still maintained against American fruits and their products, by the governments of countries which are important markets in the fruit trade of the world.
We seek an opportunity to compete in the world fruit markets equal to that afforded other exporting nations. We are entitled to this under the theory of reciprocal trade enunciated in the "most favored nation" and "GATT." That we have been discriminated against has been recognized many times by this committee and other committees of the Senate and the House. For example, see sheet A hereto attached. Despite statements in committee reports and efforts by our Government, these discriminatory trade barriers are still maintained. It is now apparent that these discriminations will not be removed at the request of our Government but only by a display of force to show that the United States Government and, especially, the Congress means business. We propose an operational amendment which can have this effect. It does not change the principles of the Trade Agreements Act but merely provides a vehicle to assure compliance by other countries with their obligations.
Not many commodities have a longer history than fruits as objects of commerce between peoples and nations. United States fruits are no newcomers to this trade. We have imported and exported from the beginning. Our first Ambassadors to London introduced American apples there, and trade developed from the orchards of Virginia, of New England, New York, and the other eastern States, and later, the Pacific Northwest. Apples from trees planted by Johnny Appleseed were barged down the Ohio and the Mississippi to New Orleans, thence in sailing vessels to France. As our production in fruits increased, in California, Arizona, Florida, Texas—oranges, lemons, grapefruit, peaches, pears, plums, grapes, apricots, and others, offered as fresh fruit and in many processed forms—exports to foreign markets became an integral part of the industry's normal commerce. 27620—88—pt. 1 53
In the 5 years between 1934 and the outbreak of war in Europe in 1039, fruits and fruit products held first place among American food exports. Following the war, during the period of financial crisis as the war-torn countries struggled to restore themselves, fruit shipments were held to token amounts or prohibited altogether. This began the quantitative controls and restrictions which are still obstructing our commerce in fruits today.
Every year, our Government has to get permission for American fruit to enter, if at all, in limited quantity or value, for a limited marketing period, by negotiating for it. Then such things as these happen:
We may be denied access while others are allowed to enter. Other sources may be granted an open general license, while we get a tight quota, and shorter or less favorable periods of entry. Negotiations are dragged on and on, decisions and announcements are frustratiugly delayed, while the season slips past and others enjoy the short-supplied market.
After advocating and supporting the principles of reciprocal trade down through the years, this is where we are.
The fault is not in the purposes and intent of the act, but in its enforcement, the conduct of the program, and the refusal of some of our friends abroad to comply with their obligations as long as it seems expedient not to do so.
As you must recognize, this is not something we can light out on our own. We have asked and have been given the help of the Congress, repeatedly and in various ways. Senate committee reports, upon previous extensions of the act in 1951 and 1955, have emphasized our problem and called upon the responsible officials in the executive branch to take appropriate action under existing authority.
Some progress has been made, yes. Sheet B attached is a tabulation showing the controls presently in effect, according to degree of severity.
It shows that the toughest problems remain, and they are in the biggest markets. These have not yielded to the efforts made to date.
Therefore, we are now asking that you equip the executive branch with the additional force of law necessary to bring an end to these discriminatory practices.
To do so effectively, the action must fit the peculiarities of fruit production and flow to market, because the time factor is so often decisive.
The crop is annual, but production is possible only in terms of decades. Then the seasonality and perishability of the crop cause the market to be exceptionally sensitive to balance or change in conditions from week to week, and day to day.
Most of the fruit we enjoy, and take for granted that we will find in the market, is there because of judgment made and risk begun with investment and labor, 10, 20, or 30 or more years ago, and maintained unbroken ever since.
A newly planted tree or vine must be expensively tended for years before it comes into bearing, and the bearing tree must be tended whether good crop or poor, whether good market or not.
Ours are not crops that can be taken in or out from year to year. They vary with the weather and other growing conditions, as has been painfully shown this season in various parts of the country. They require an annual investment in labor and materials and other direct costs which runs to a high percentage of the value of the land itself.
The seasons of bloom, growth, maturity and harvest are not open to negotiation. They set the timetables for actions which the grower, the packer and the processor must have planned and prepared in advance. Harvested fruit has to move quickly to market for prompt enjoyment, or be stored properly for later movement, or processed into one of its many products. Even though the latter will keep a longer time, nevertheless the business decisions and actions which result in their being available have to be made seasonally.
We do not know of any article in international commerce more vulnerable thau perishables to delay, interference, and arbitrary unbalance of competition.
The effects upon the importing market were well summarized in the conclusions of a special study made for the British Parliament on the marketing of horticultural products. Referring particularly to import problems in apples and pears, the report declared that the prolonged use of quantitive restrictions tends to produce an ossification of the trade * * * that the fear of changes in quotas inhibits producers and distributors from planning ahead * * * that importers must develop their trade ties with sources where opportunity exists for continuity of business.