-5 In case Arbitration does not follow traditional grain trade procedures. settlement of contract dispute is not reached, it is submitted for arbitration to the Foreign Trade Arbitration Commission of the China Council for the Promotion of International Trade, Peking, in accordance with their Provisional Rules. decision by the Commission is final and binding upon both parties. The The financial risk inherent with these deviations from normal grain trade practices make grain export firms very reluctant to enter into PRC negotiations. The U.S. Export-Import Bank could provide credit insurance to grain exporters to protect them against such commercial risks and political action inherent under these conditions. Another solution might be for the USDA to receive authority to provide export risk insurance for commodity exporters entering new markets for a 3 year probationary period. It would appear that the Humphrey-Findley Bill (S. 2385) is a viable vehicle to accomplish similar goals within the P.L. 480 program. This bill would authorize the Commodity Credit Corporation to finance export credit sales of agricultural commodities from private stocks for up to 3 years and export sales of agricultural commodities out of CCC and private stocks in excess of three years, but not more than ten years with no cargo preference required. Additionally, non-market-economy countries would be eligible to participate in these programs. It is absolutely mandatory that the wheat industry and government must work together by whatever means necessary to reduce our stifling inventory. I believe the mechanics of re-establishing grain trade are minimal when compared with political and legal barriers. Settlement of old debts and the status of Taiwan are undoubtedly, of major importance. Steps to be taken might be: 1. Resumption of negotiation on the issue of blocked Chinese assets -6 3. Extend most-favored-nation treatment for Chinese exports or at least 4. a Presidential waiver of the free emigration requirements for 18 months with Congressional approval. extension of MFN. Romania was afforded this treatment in Granting of "deferred payments" is paramount. 5. Barter arrangements, i.e., grain for oil, arrange through the National Council for U.S.-China trade to solve the hard currency requirements. The OWGL and NAWG support expanded trade with the PRC, believing that trade activity will be a stabilizing factor in domestic supplies and price and also an effective means for influencing domestic political stability in the PRC, and creating better understanding between our nations through trade activity. We are in support of H.R. 8196 and H.R. 8197 because they are steps toward accomplishment of the above goals. Mr. AUCOIN. Mr. Pryor, thank you very much. I would like to call on Mr. Maffuid at this time, if I could. STATEMENT OF JESSE MAFFUID, INTERNATIONAL MARKETING DIRECTOR, NATIONAL MACHINE TOOL BUILDERS ASSOCIATION, BRIDGEPORT, CONN., ON BEHALF OF PHILIP R. MARSILIUS, PAST CHAIRMAN OF THE ASSOCIATION Mr. MAFFUID. Mr. Chairman, I am going to submit the statement prepared by Philip R. Marsilius, who was unable to attend the hearing, because of bad weather in Connecticut. Mr. AUCOIN. Would you state for the record the association that you are representing? Mr. MAFFUID. I am the international marketing director for the National Machine Tool Builders Association of which Mr. Marsilius is the past chairman. In the text of Mr. Marsilius' statement, mention is made of trips to China by the machine tool industry. These are trade missions approved by our Government, and they were organized by me. I have traveled extensively in China, through manufacturing plants, and I have been in areas with our missions where no other Caucasians have ever visited any of the manufacturing plants. So, we are well aware of the manufacturing facilities, the plants, and the level of industry in China. I shall submit Mr. Marsilius' statement for inclusion in the record at this point. [Mr. Marsilius' prepared statement, on behalf of the National Machine Tool Builders Association, follows:] STATEMENT OF PHILIP R. MARSILIUS PAST CHAIRMAN OF THE NATIONAL MACHINE TOOL BUILDERS' ASSOCIATION U. S. HOUSE OF REPRESENTATIVES My name is Philip R. Marsilius. I am President of the Producto Machine Company of Bridgeport, Connecticut, and the Past Chairman of the National Machine Tool Builders' Association (NMTBA), a national trade association with 400 members accounting for about 90 percent of the United States' machine tool production. Over 70 Most of the member companies are small businesses. percent of these companies have less than 250 employees. entire industry has approximately 86,000 employees. The We are grateful for this opportunity to present the industry's views on American trade with the Peoples' Republic of China (PRC) and its implications for our members and the workers they employ. We support H.R. 8196 by Congressman AuCoin, exempting the PRC from the 1974 Trade Act prohibitions against Eximbank credits to most Socialist countries. -2 The European Community (EC) and Japan over the past five years have greatly increased their exports to the PRC. In 1975, West Germany sold $23.6 million worth of machine tools to China, with Japan's $21.0 million and Switzerland's $13.7 million ranked second and third respectively among free-world machine tool makers. The United States was a distant fourth with $4.7 million in slaes to the PRC. However, the lower United States sales volume is attributable to its most recent and slowly evolving diplomatic reapproachment with China. There is reason to believe that the United States' share of the world market for machine tool sales to China would increase dramatically within the next decade if moves like extending Eximbank credits are made by the Congress and the Administration. member My belief that future U.S. trade with China will increase is more than mere conjecture. In 1975, James A. Gray, President of NMTBA, along with sixteen top executives from the Association's companies, led America's first Industry-Organized-GovernmentApproved (IOGA) industrial trade mission to the PRC. Granted IOGA status by the Department of Commerce, this industrial contingent was met and hosted by the China National Machinery Import and Export Corporation (MACHIMPEX). The primary objectives of this mission were to establish initial contacts with officials of Machimpex; to familiarize Machimpex and end-user personnel with the capabilities of U.S. machine tools; to establish a framework for future business dealings with the Peoples' Republic of China; and to assess the Chinese |