And we think it should act in this area more often.

Senator MALONE. But the President and Congress said to chemicals, "You should never be in that position," but you are in it. Mr. HOOKER. We certainly are.

Senator MALONE. Now I will tell you what some of the chemical companies have told me who have quit and are going to quit. They are going to put their money in Germany and other foreign nations. They said they did not want to do it; they told me that.

Mr. HOOKER. That is the distressing feature, sir, that so many of the chemical companies are putting their plants, making their investments, in foreign countries, and bringing their chemicals into this country.

Senator MALONE. Who is to blame?

It is the Congress, is it not?

Mr. HOOKER. Sure it is the Congress.
Senator MALONE. All right.

It is not your fault, if you have to do that, Mr. Hooker.

Mr. HOOKER. No, sir.

Senator MALONE. In order to survive?

Mr. HOOKER. That is right.

Senator MALONE. But it is our fault for making that necessary for you to survive as a chemical company.

Mr. HOOKER. I believe that is a correct statement, sir.

Senator MALONE. Now all foreign nations understand the effect of shading a tariff or shading a subsidy or something because most of them have lived by their wits for 300 years.

Mr. HOOKER. Yes, sir.

Senator MALONE. England thoroughly understands it, France understands it, Belgium understands it.

We don't understand it. That when you have a tariff on anything that makes the difference in the costs of production then there is no advantage in putting your plant in another country and your investments stay at home.

Mr. HOOKER. That is right.

Senator MALONE. But when our tariff is lower so that there is no protection and they protect their industries, which they do

Mr. HOOKER. They certainly do, sir.

Senator MALONE. We are the only free-trade nation in the whole. world. Every other one of them has manipulation of their currency for trade advantage in terms of the dollar, or they have quotas or they have import permits or exchange permits, or all four.

Mr. HOOKER. Yes, sir.

Senator MALONE. And they do not live up to their part of the trade agreements, just as the rules of GATT say they need not doMr. HOOKER. That is right.

Senator MALONE. Therefore, for a company or an individual to make any profit and to get their market they must go there to produce. Mr. HOOKER. Yes, sir.

Senator MALONE. And then, in doing that, can get our market under the free trade.

Now, anybody who does not understand that should not be in this body and if he understands that and votes for it, I do not understand

it.

Mr. HOOKER. Well, we do not either, sir.

Senator MALONE. So that is the only thing I really have to say about it.

I liked your testimony and I think you know what you are talking about and you are in a very important industry.

Mr. HOOKER. Thank you, sir.

Senator MALONE. And all I will say in closing is it remains to be seen what Congress will do.

If they do extend this act, I think we will have a special session before the first of the year because unemployment will be such that you just cannot stand it in this country.

Mr. HOOKER. If so, I should like the privilege of addressing this body again, sir.

Senator MALONE. You certainly may as far as I am concerned. That is all.

(The documents referred to are as follow:)

THE PURPOSE OF AMENDMENT (A)

Amendment (A) to H. R. 12591 would extend the act for a period of 2 years and retain the authority in the President to modify rates of duty during this 2-year period. The formula utilized is essentially that which was enacted by the Congress in the Trade Agreements Extension Act of 1955, modified to fit the 2-year extension period.

PROPOSED AMENDMENT (A) TO H. R. 12591

On page 1, line 9, strike out "1963" and insert in lieu thereof "1960".

On page 2, beginning with line 3, strike out through line 6, on page 6, and insert in lieu thereof the following:

"(1) Paragraph (2) (A) is amended by striking out "January 1, 1945" and by inserting in lieu thereof "July 1, 1934".

"(2) Paragraph (2) (D) is amended to read as follows:

"(D) In order to carry out a foreign trade agreement entered into by the President on or after July 1, 1958, and before July 1, 1960, decreasing (except as provided in subparagraph (C) of this paragraph) any rate of duty below the lowest of the following rates:

"(i) The rate 10 per centum below the rate existing on July 1, 1958. "(ii) In the case of any article subject to an ad valorem rate of duty above 50 per centum (or a combination of ad valorem rates aggregating more than 50 per centum), the rate 50 per centum ad valorem (or a combination of ad valorem rates aggregrating 50 percentum). In the case of any article subject to a specific rate of duty (or a combination of rates including a specific rate) the ad valorem equivalent of which has been determined by the President to have been above 50 per centum during a period determined by the President to be a representative period, the rate 50 per centum ad valorem or the rate (or a combination of rates), however stated, the ad valorem equivalent of which the President determines would have been 50 per centum during such period. The standards of valuation contained in section 402 or 402 (a) of this Act (as in effect, with respect to the article concerned, during the representative period) shall be utilized by the President, to the maximum extent he finds such utilization practicable, in making the determinations under the preceding sentence.

"(3) Paragraph (3) (B) (i) is amended to read as follows:

"(i) if the total amount of the decrease under the foreign trade agreement does not exceed 10 per centum of the rate existing on July 1, 1958, the amount of decrease becoming initially effective at one time shall not exceed 5 per centum of the rate existing on July 1, 1958;

"(4) Paragraph (3) (B) (ii) is amended to read as follows:

"(ii) except as provided in clause (i), not more than one-half of the total amount of the decrease under the foreign trade agreement shall become initially effective at one time;

"(5) Paragraph (3) (C) is amended to read as follows:

"(C) No part of any decrease in duty to which the alternative specified in paragraph (2) (D) (i) of this subsection applies shall become inititally effective after the expiration of the two-year period which begins on July 1, 1958. If any part of such decrease has become effective, then for purposes of this subparagraph any time thereafter during which such part of the decrease is not in effect by reason of legislation of the United States or action thereunder shall be excluded in determining when the two-year period expires."

THE PURPOSE OF AMENDMENT (B)

A purpose of the amendment is to permit interested parties to make representations to the appropriate agencies of the Government concerning products on the list transmitted by the President. In the past industry sometimes has been compelled to guess which chemical products are intended to be the subject of negotiation, since many provisions of the chemical schedule of the tariff act provide for classes of chemicals rather than listing hundreds of specific chemicals by name. There are thousands of organic chemical products which are now or are likely to be articles of commerce. Members of the industry may be unaware that a reduction in duty is contemplated on specific products which they manufacture. On the other hand, members of the industry are put to needless expenditures of time and money investigating chemical lists to find later that specific products in which they are vitally interested are not intended to be the subject of trade agreement negotiations.

This difficulty could be simply resolved by a statutory requirement that the list of articles indicate the commercial name or designation, as well as the paragraph or other provision of the tariff act under which each such article is classified for duty.

Another purpose of the amendment is to utilize the long experience and expert knowledge of the Tariff Commission to assist the President in the important task of preparing for negotiations of a foreign trade agreement. The amending language does not take away from the President the initiative of sponsoring trade agreements but places at his disposal all of the material concerning the volume of domestic production, prices and other data which has been carefully prepared over a period of many years by the Commission; the Commission also, over a period of many years has acquainted itself with economic conditions in foreign countries and regularly receives reports from the Departments of State, Commerce, and other executive agencies which it reviews and evaluates.

The Commission also is in a position to advise the President whether existing rates of duty should be increased on any article imported into the United States either by reason of prior investigations under the peril point or escape clause provisions of the law or because of its practice of compiling import statistics and of its experience in evaluating the competitive impact of imports upon domestic producers of like or similar articles.

It seems desirable that the Congress should be informed as to the Tariff Commission's advice in such a manner that the proposed negotiations will not be jeopardized. To that end, the suggested amendment would require that the Commission's advice to the President not be disclosed until the peril point investigations have been completed. The Congress should be made aware of the Commission's advice to the President that additional import restrictions should be imposed upon certain articles in order that the Congress may be informed whether the executive department is carrying out the purposes of the law. PROPOSED AMENDMENT (B) TO SEC. 3 (A) OF THE TRADE AGREEMENTS EXTENSION ACT OF 1951, AS AMENDED, (19 U. S. C., SEC. 1960 (A))

H. R. 12591 amends the third and fourth sentences to subsection (a) by striking out "120" days and inserting in lieu thereof "6 months."

Further amendments are as follows:

The first sentence of subsection (a) of section 3 of the Trade Agreements Extension Act of 1951, as amended (19 U. S. C., sec. 1360 (a)), is amended to read as follows (matter in brackets deleted; new matter italic):

"SEC. 3. (a) Before entering into negotiations concerning any proposed foreign trade agreement under section 350 of the Tariff Act of 1930, as amended, the President shall request the advice of [furnish] the United States Tariff Commission (hereinafter in this Act referred to as the 'Commission') [with] in the preparation of a list of all articles imported into the United States to be considered for possible modification of duties and other import restrictions, im

position of additional import restrictions, or continuance of existing customs or excise treatment. The Commission shall include as part of its advice to the President a report concerning all articles imported into the United States which, in the judgment of the Commission, should be considered by the President for possible imposition of additional import restrictions. After receipt of such advice and report of the Commission, the President shall furnish the Commission with the list of imported articles prepared by him and such list shall specify each article by its commercial name or designation and indicate the paragraph or other provision of the tariff Act of 1930 under which such article is classified for duty purposes. [Upon receipt of such list] [t] The Commission shall make an investigation and report to the President the findings of the Commission with respect to each such article on the list as to (1) the limit to which such modification, imposition, or continuance may be extended in order to carry out the purpose of such section 350 without causing or threatening serious injury to the domestic industry producing like or directly competitive articles; and (2) if increases in duties or additional import restrictions are required to avoid serious injury to the domestic industry producing like or directly competitive articles the minimum increases in duties or additional import restrictions required. Such report shall be made by the Commission to the President not later than [120 days] six months after the receipt of such list by the Commission. No such foreign trade agreement shall be entered into until the Commission has made its report to the President or until the expiration of the [120 day] sixmonth period. Concurrently with the submission of such report to the President, the Commission shall submit to the Committee on Ways and Means of the House and to the Committee on Finance of the Senate a copy of its advice and report to the President referred to in the second sentence of this paragraph."

THE PURPOSE OF AMENDMENT (C)

The peril point provisions of existing law do not establish standards or guidelines to assist the Commission in making its determinations in preventing the possibility of injury whch might flow from a proposed concession on imports. Although the Congress directs the Commission to ascertain the minimum increases or decreases in duty or other modifications of existing customs treatment, no criteria are set forth in the law to aid the Commission. As a matter of practice the Commission undoubtedly has established working rules which it applies to factual problems presented to it in peril point investigations. It would seem desirable that the statute itself furnish some standards which the Commission would be required to apply in addition to weighing other factors which it deems pertinent or relevant.

PROPOSED AMENDMENT (C) TO H. R. 12599 AND TO SECTION 3 (B) OF THE TRADE AGREEMENTS EXTENSION ACT OF 1951 AS AMENDED (19 U. S. C., SEC. 1360 (B)) Subsection (b) of section 3 of the Trade Agreements Extension Act of 1951 as amended (19 U. S. C., sec. 1360 (b)) is amended by adding at the end thereof the following new sentences:

"Each investigation of the Commission shall, without excluding other factors, ascertain

"(1) The average invoice price, converted into currency of the United States in accordance with the provisions of section 522 of the Tariff Act of 1930, as amended, at which the foreign article is sold for export to the United States on a country of origin basis, and the price of like or directly competitive domestic articles when sold at wholesale in the markets of the United States during the last calendar year preceding such investigation. "(2) The Commission shall estimate the increased volume of imports which, under normal conditions of trade, will result from the granting of the maximum reductions in rates of duty and maximum concessions in other import restrictions permitted under this part during each of the 3 years following the effective date of any proposed trade agreement and shall also estimate the maximum increase in imports which may occur without causing injury to the domestic industry producing like or directly competitive articles.

"(3) The Commission shall request the executive department for information in its possession concerning prices, and other economic data from the principal supplier foreign country of each such article.

"(4) If in the course of any such investigation the Commission shall find with respect to any article on the list upon which a tarifi concession has been granted that an increase in duty or additional import restriction is required to avoid serious injury to the domestic industry producing like or directly competitive articles, the Commission shall promptly institute an investigation with respect to that article pursuant to section 7 of this Act."

THE PURPOSE OF AMENDMENT (D)

A major attack upon the administration of the trade agreements program is centered upon the actions of the President in overruling the factual findings of the Tariff Commission, or in refusing to accept such findings on the ground that they are insufficient or inadequate. Although the Commission has expended 9 months time on each escape clause case and has utilized all of its investigative facilities and the experience of its expert staff in making factual determinations, the President within a period of 60 days, through executive agencies which are not experts in this field, second-guesses the Commission.

Existing law does not grant the President specific authority to substitute his judgment of facts for that of the Commission, but the provision of law which permits him to advise the Congress of his refusal to follow the Tariff Commission recommendations has been converted into a presidential review of the facts of injury.

As will be seen from an examination of amendment E, the inclusion of language in the law making the decision of the Commission on the question of injury final and conclusive will not arbitrarily deprive the President of discretionary power of disapproving the Commission's decision in national security matters.

PROPOSED AMENDMENT (D) TO H. R. 12591

The third paragraph of subsection (a) of section 7 of the Trade Agreements Act of 1951 as amended (19 U. S. C., sec. 1364 (a)) is amended by adding at the end of said paragraph the following:

"The findings of the Tariff Commission as to injury or threat of serious injury made pursuant to the provisions of this section shall be final and con

THE PURPOSE OF AMENDMENT (E)

It is recognized that the President may deem it advisable not to approve of the Tariff Commission's findings of injury where it would be inimical to the security of the United States if adjustments or modifications of duty or impositions of quotas recommended by the Commission were made effective.

The amendments would permit the President to inform the Congress that our national security needs require that he not act in accordance with the findings of the Commission and such report would be binding upon the United States unless the Congress were to affirmatively disapprove of the President's decision by adopting a concurrent resolution.

PROPOSED AMENDMENT (E) TO H. R. 12591

On page 9, beginning with line 11, strike out through line 16 page 10, and insert in lieu thereof the following:

"SEC. 6. Subsection (c) of section 7 of the Trade Agreements Extension Act of 1951, as amended (19 U. S. C., sec. 1364 (c)) is amended by inserting '(1)' after '(c)' at the beginning thereof, and by striking out

"If the President does not take such action within 60 days he shall immediately submit a report to the Committee on Ways and Means of the House and to the Committee on Finance of the Senate stating why he has not made such adjustments or modifications, or imposed such quotas.' and by inserting in lieu thereof the following:

"Whenever the President determines that the security needs of the United States would be adversely affected by such adjustments or modifications or imposition of such quotas, he shall within 60 days of receipt of the Tariff Commission's report, submit a report to the Committee on Ways and Means of the House and to the Committee on Finance of the Senate specifying the national security need which, in his judgment, requires that the findings of the Tariff Commission not be approved.

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