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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 appeal 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.

AMSINCK SONNE CORP.,

By N. L. H. ROESLER, President.
AMERICAN TRADING CO., INC.,

By R. A. HEIRONIMUS, President.

GILLESPIE & COMPANY OF NEW YORK, INC., By FRED BRUMMER, President.

STATEMENT OF MINNEAPOLIS CHAMBER OF COMMERCE REGARDING 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 60 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 Salvalor, 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 these countries already totals over $12 million with new direct

investments (excluding reinvestment) taking place at an annual rate of about $250 million. A threat of being shut out of traditional European markets by high tariffs is of acute concern to United States businessmen."

Our people have a firm grasp of world affairs and the special place this country has been given in the shaping of world destiny. With some of the great nations of Europe moving toward freer trade and elimination of trade barriers they fail to see how an intelligent Congress could possibly cast the United States in the role of a protectionist, isolationist country, unable and afraid to compete in world markets.

This country has for many years pointed with pride to the free trade between States, and we have said, in so many words to the Old World, "This is how to do it; this the way to prosper and to raise your standard of living." Were we to tighten our trade policy at this point it would be an about-face admission that we were wrong, that the way to maintain full employment, prosperity, and a high standard of living is not free trade but more rigid trade restrictions and higher tariff walls.

We feel strongly that the course which will be for the good of America is clearly defined in this issue. We urge the Senate of the United States to extend the Trade Agreements Act for 5 years without crippling amendments.

STATEMENT OF TOBACCO ASSOCIATES, INC., SUBMITTED BY J. B. HUTSON,
PRESIDENT, WASHINGTON, D. C.

Within the past 4 months Tobacco Associates has held two meetings at which the reciprocal-trade-agreements programs have been discussed. The first of these meetings, which was held in Raleigh, N. C., on March 4, 1958, was the annual meeting of the voting membership. This meeting was attended by around 400 leaders who represent about 400,000 tobacco growers in the States of Virginia, North and South Carolina, Georgia, Florida, and Alabama, over 100 corporations engaged in the exportation of United States tobacco, and the auction warehousemen, fertilizer manufacturers, merchants, and bankers in the fluecured-tobacco-producing States.

A considerable part of the time at this meeting was devoted to a discussion of the progress of our trade-agreements program. At this meeting the following resolution was adopted unanimously:

"Whereas the flue-cured-tobacco farmers of the United States depend on foreign markets to utilize about one-third of their normal production; and

"Whereas the amount of United States flue-cured tobacco which can be sold in foreign markets is often limited by the ability of our foreign customers to obtain the necessary dollar exchange to purchase their requirements; and

"Whereas the foreign-trade policies of the United States have a direct effect on the availability of dollar exchange in most foreign countries; and

"Whereas the reciprocal-trade-agreements program of the United States for the past quarter of a century has been one of the most important parts of our foreign-trade policy and during this time has provided world leadership in the establishment of fair and equitable foreign-trade rules and procedures; and

"Whereas the legislative authority for the operation of the reciprocal-tradeagreements program is scheduled to expire on June 30, 1958; and

"Whereas the United States Congress is now considering a bill, H. R. 10368, which would extend such authority for an additional 5-year period: Now, therefore, be it

“Resolved, That we, the membership of Tobacco Associates, Inc., representing the producers, warehousemen, and leaf exporters of flue-cured tobacco, and the bankers, merchants, and fertilizer manufacturers in the flue-cured-producing area, do hereby recommend and urge the Members of Congress to enact such legislation as is provided in H. R. 10368."

On April 14, 1958, also in Raleigh, N. C., the second meeting was held for the express purpose of bringing to the attention of the public the importance and necessity of continuing the trade-agreements program.

The general consensus at this meeting was that a continuation of our reciprocaltrade-agreements program was not only of tremendous importance to the future well-being of United States tobacco producers and exporters, but also from the standpoint of promoting a high level and healthy international trade and that such a level of international trade is imperative if the free world is ultimately 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 AGREEMENTS 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.

27629-58-pt. 1- -53

In the 5 years between 1934 and the outbreak of war in Europe in 1939, 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 frustratingly 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 fight 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 than 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.

Add discrimination to that, in any country-of holding American fruits to an arbitrary disadvantage as compared with those from other sources—and you have the crux of our problem.

Why, then, do these things persist?

We say that under our trade agreements we are entitled to a fair shake, an even chance at the business, and to be able to depend on having that chance. The rest is up to us, on the competitive attractiveness of our offerings and our ability to service the trade.

The chance is denied because bad habits, once established, are not easily shed. Strong interests and influences have become attached to these conditions. The postponement of trade-agreement obligations has permitted temporary practices to gain a foothold.

We cannot expect that discriminatory barriers will be given up and reciprocal agreements to regulate this trade restored, if we simply put it as a favor due us under past promises.

We believe the solutions will come when, and only when, the United States makes it abundantly clear that discriminatoray practices have run their course and must be ended.

The act says what to do about discrimination. It says (sec. 350 (a) (4)) the President shall, as soon as practicable, suspend the benefits of our multilateral concessions on articles of the offending country. Our members have been taking a look at this provision. It serves as a strong deterrent, and can be used as a prompt corrective against an outbreak.

Against existing practices which have been allowed to gain a foothold, its use becomes a very serious thing, indeed. Perhaps that is our difficulty-that foreign governments have been counting on hesitancy by our Government to take such a step, and the step has not been taken.

We recognize its seriousness. Our problem is also serious. We expect the provision for suspension to be used, if necessary.

It need not be used abruptly. We are not interested in penalty to no avail, but in results.

These may not be accomplished in one stroke. If interim arrangements are requested in good faith to help the transition, each one should be a positive, progressive step toward the goal, and not a further postponement.

To that end, we ask your consideration of an amendment to the following effect:

"The President shall, with respect to any country which has imposed import restrictions which discriminate against American commerce in perishable, seasonal agricultural commodities or their products, take prompt action for the purpose of obtaining removal of such restrictions and, until the removal of such restrictions is complete, the President may, as an alternative to the suspension provided for in section 350 (a) (4), enter into temporary arrangements in timely advance of the seasons of such commodities which will facilitate the earliest accomplishment of that purpose.

"The President shall report annually to the Congress the particulars of action taken under this provision, and shall itemize any such restrictions remaining, with explanation therefor."

Mr. Chairman, this is intended as a constructive addition entirely in accord with the principles, the stated purposes, and the enforcement provisions of the act.

We believe it fills a gap and enables the Congress to keep an eye on what happens. We ask that it be made this explicit, for the reasons given.

As you know, our commodities are not price supported. The market we depend upon includes the foreign part of the demand for our production. The Government is not in the fruit business; it owns no stocks of fruits. Our production has not been inflated.

We are asking here for your help in obtaining fair and equitable access to foreign markets which are supposed to be opened to us.

In that context, we support the extension of the act, and depend upon its operation to achieve that end.

[Sheet A]

Citations from 1951, 1955, and 1956 committee reports:

(1) Trade Agreements Extension Act of 1951 (Senate Finance Committee, Calendar 279, Rept. 299, April 27, 1951):

"Testimony before the committee as to our perennial fruit crops has indicated difficulties encountered by exporters of these crops in regaining access to the importing countries in Europe which in the past furnished an integral

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