Gentlemen, in 1960 the Japanese shipped into this country 67 million square yards of goods. In 1961 they shipped in 40 million square yards of goods. Now that drop actually was absorbed by Japan and the absorption by Japan of that difference created a much healthier situation here with some reemployment in an industry that was gradually disappearing.

Section 222 of the proposed bill gives the President authority generally in his discretion to reserve from future tariff negotiations any article he determines to be appropriate. This is a discretion which is reserved to the President without limitation or qualification.

We believe that in the interests of industries in the same situation as that of the silk-weaving industry, a provision should be included to require the President to reserve from tariff negotiations all articles, the importation of which at the time of the passage of the act or at any other time, represent a certain fixed percentage or more of domestic production.

Unless this is done, additional concessions will inevitably wipe out the remainder of the American industry. It is not unfair to ask that where foreign producers have taken over so large a portion of our market, 125 percent in the case of our industry, under existing conditions, they not be stimulated further by additional tariff concessions. I would like also to recommend another restriction which might reasonably be placed on the President's power to negotiate trade concessions. In negotiating concessions, the President should not be permitted to reduce duties on any goods or products to a point below the duty applicable to the goods or product in a less advanced state of processing. I make this suggestion in the light of the experience of the silk-weaving industry now laboring under a tariff schedule in which greige goods-unfinished goods in the raw state-are dutiable at a rate 25 percent higher than the same goods in the bleached, dyed, or finished state. The result of such arbitrary classification, which came via GATT concessions rather than from the Tariff Act, has been to stimulate and encourage the importation of finished fabrics with the result that in excess of 90 percent of all silk imports arrive in finished or semi-finished states dutiable at 222 percent instead of 30 percent. The importer of silk fabrics is thus in a position to offer finished products at prices substantially below comparable goods in the greige produced by domestic mills.

Finally, we believe that the provisions with respect to "peril point" procedures and "escape clause" proceedings should be strengthened in the interest of domestic producers, rather than weakened to the extent of being practically meaningless, as they are in the present bill. In the last round of negotiations peril points were disregarded by the President in many cases.

"Escape clause" relief for the benefit of domestic industries is most difficult to obtain under existing procedures, as witness the experience of the industry which I represent. It is earnestly requested, therefore, that in reviewing and revising the provisions of H.R. 9900, attention be given to these problems which I have raised, so that the interests of domestic manufacturers and domestic wage earners are recognized and more rigorously protected.

Title III of the proposed bill, entitled, "Adjustment Assistance" is the most imposing, complicated, and the longest portion of the legisla

tion. I make no comment on the detailed provisions of this title other than to state on behalf of my industry and others like it, that we feel that the Government would accomplish more by realizing our problems and encouraging us in conducting our business as free enterprises rather than considering us expendable, but worthy of relief.

Thank you, gentlemen.

Mr. KING. Thank you, Mr. Rubin. The committee appreciates your bringing us the views of your council. I might say with respect to a comment you made, that it is gratifying on occasions to know how far this committee in particular goes in watching out for the interests of small business or little individual businesses.

Mr. RUBIN. Thank you, sir.

Mr. KING. I did not like that to go completely untouched because it is a fact that on many occasions the committee works as diligently as any body of men I have ever known when they find unique instance where injury or injustice comes to the little ones. Thank you again, Mr. Rubin.

Mr. RUBIN. Thank you, Mr. Chairman.

Mr. KING. Mr. Falk?

We are pleased to se you accompanied by one of the oustanding members of the California delegation. It won't make us listen any more thoroughly to what you have to say, but we remember on occasion when a Member bothers to present a witness here.

STATEMENT OF HON. CLEM MILLER, U.S. REPRESENTATIVE FROM THE STATE OF CALIFORNIA

Mr. MILLER. Mr. Chairman, it is with a great deal of pleasure, representing a district where the special crop is of paramount importance as it is to all of us in California, to be able to present Mr. Ernest Falk, who is representing the U.S. National Fruit Export Council.

I might say that this industry has been one that has been most reasonable in its requests to Congress, to the State Department, to everyone concerned with this problem. Yet, in spite of the reasonableness of this entire industry, it has suffered great losses in foreign trade rather than any benefits.

We in this United States are granting concessions to other nations through the State Department and we are not getting them in return. Mr. Falk is here with a most excellent statement and will plead for simple fairplay. I have discussed this matter with other members of the California delegation and other Congressmen from Western States who are similarly involved. I see Mr. Ullman, of Oregon, is with the committee, and he can attest to this fact as well.

I simply say that we are determined that this industry should and must get fairplay in this matter of international trade.

Mr. Falk, it is my pleasure to be here with you this afternoon.

STATEMENT OF ERNEST FALK FOR THE U.S. NATIONAL FRUIT EXPORT COUNCIL

Mr. FALK. Thank you, Mr. Miller.

Mr. Chairman, and members of the committee, as Congressman Miller stated, I am appearing on behalf of the U.S. National Fruit

Export Council which represents the major part of the fruit industry of the United States. I have submitted a prepared statement and would request that it be incorporated into the record.

Mr. KING. Without objection, it will be incorporated.

(The statement referred to follows:)

STATEMENT OF ERNEST FALK FOR THE U.S. NATIONAL FRUIT EXPORT COUNCIL

This statement is submitted on behalf of 13 organizations representing the major part of the fruit industry of the United States. It is limited to title II.

SUMMARY OF COMMENTS AND RECOMMENDATIONS

The export market has traditionally been a very significant outlet for U.S. fresh and processed fruits. Approximately $250 million worth are exported annually.

Following World War II most European countries prohibited or restricted imports of U.S. fruits to conserve their limited dollar exchange for products considered more essential. Initially these restrictions were generally justified under GATT, but most of these countries continued to restrict imports after this justification had expired. Most European countries were in violation of their GATT commitments.

Despite this continued unjustified discrimination against U.S. fruit products, the fruit industry in the past endorsed extension of the Trade Agreements Act. We felt that the principle of multilateral trade was sound in theory and that despite the unjustified discrimination, the United States should continue in the worldwide effort to reduce trade barriers. At the same time we urged that the discriminations against fruit and fruit products should be removed; this discrimination was recognized by the Congress in reports on this legislation.

Although some barriers have been removed, substantial discrimination has continued and in some instances has been intensified. This is evidenced by the announcement of the recent round of GATT negotiations where the European Economic Community increased the duty on prunes, fruit juices, and canned pineapple; nontariff barriers on fresh apples, fresh pears, and citrus remain; also, the European Economic Community reserved in the provisional Common Market agricultural policy, the right to establish quantitative restrictions and variable levies and other procedures which could be used as barriers to our products.

The fruit industry cannot endorse nor support title II of H.R. 9900 solely on the hope that abuses will be corrected in the future. (This was the basis of our support of the extensions of the Trade Agreements Acts in the past.) We are opposed to title II unless it is amended to

(a) require the President to withdraw concessions from any country that without justification nullifies or impairs concessions granted to the United States without making adequate compensation therefor; and to prohibit the President from making any future concessions available to any country that has unjustifiably nullified or impaired concessions previously granted to the United States;

(b) require limitation of most-favored-nation treatment to those countries which extend similar treatment to the United States. Most-favored-nation treatment and the benefit of future tariff concessions should be extended only to those countries who have trade agreements with the United States, either direcly through bilateral agreements or through the multilateral agreements of GATT.

SCOPE OF INDUSTRY

The U.S. National Fruit Export Council membership includes: CaliforniaArizona Citrus Industry, California Grape & Tree Fruit League, Canners League of California, Dried Fruit Association of California, Florida Canners Association, Florida Citrus Commission, Florida Citrus Mutual, International Apple Association, National Apple Institute, Northwest Canners and Freezers, Northwest Horticultural Council, Texas Citrus & Vegetable Growers & Shippers, Texas Citrus Mutual. I am the manager of the Northwest Horticultural Council, one of the members.

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, with a retail value after packing, storing, processing, transportation, and distribution, of near $4 billion. Approximately $250 million of fruit and fruit products are exported annually. 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.

Our members include producers, packers, and export shippers of citrus and deciduous fruits in the fresh, canned, dried, and concentrated forms.

Our export market, largely in Europe, has traditionally been a very significant outlet for U.S. fresh and processed fruits. This market was developed with American fruits of superior quality; it has not been a dumping ground for occasional surpluses. Prior to World War II, it provided a normal and regular market for almost one-tenth of the fresh fruit and one-quarter of the processed fruit produced annually in the United States. Exports of perennial fruits and fruit products ranked first in the U.S. exports of foods, and third in all agricultural exports, exceeded only by cotton and tobacco, prior to World War II.

POST WORLD WAR II DEVELOPMENTS

Following the war, most European countries prohibited imports of U.S. fruits because they wanted to reserve their limited dollar exchange for products they thought more essential.

Over the past 12 years, we, the representatives of the fruit industry, have continually sought access to our traditional markets abroad. We have stressed the discriminatory nature of these restrictions, which favored competitors from soft currency countries, while barring U.S. fruits and fruit products.

When we brought this continuing situation to the attention of the representatives of the Departments of Agriculture and State, they initially reminded us that foreign countries were obligated under the GATT to remove these barriers as soon as their balance-of-payments position warranted.

This has been done, only to a limited extent. As foreign economies have improved, there has been some relaxation of these trade barriers. However, these have usually been applicable to fruits or fruit products not produced by these countries or their dependencies.

CURRENT RESTRICTIONS ON TRADE

At the present time, exports from important segments of the U.S. fruit industry still are sharply limited by these quantitative restrictions. In practically every instance, these remaining restrictions are designed to protect local growers or producers in dependent or affiliated territories, or to protect bilateral trading arrangements. Most of these discriminate, directly or indirectly, against imports from the dollar area and our Government has been unable or has not seen fit to apply the pressure necessary to get them removed. The effect of the current import controls of foreign countries on fruit and fruit products from the dollar area is shown graphically in exhibit A hereto attached.

The shortage of dollar exchange no longer provides an excuse for many countries and particularly the industrialized countries of Western Europe to restrict imports of fruits from the United States.

Nevertheless, these restrictions have been continued in violation of their agreement under the GATT. The remaining barriers should be removed now. and resumption of normal commercial relationships should be permitted. Only when these barriers have been removed, will the entire U.S. fruit industry have the opportunity to again compete freely in world markets.

We have consistently and frequently urged the executive branch of the Government to take the necessary steps to accomplish removal of the remaining unjustified and arbitrary trade barriers. Unfortunately, political considerations apparently outweigh the commercial or economic justification for their removal. This situation appears to be getting no better fast. In fact, in some respects

it is deteriorating.

1960-61 GATT NEGOTIATIONS

The members of GATT met at a tariff conference in Geneva during 1960 and 1961. An analysis of the U.S. negotiations at GATT has been released as Department of State Publication 7349, Commercial Policy, Series 186, released in March 1962. This publication after reviewing some of the negotiation contains the following material:

Principal tariff concessions obtained by the United States from the European Economic Community

1 Plus a supplemental duty on added sugar content. Many other claimed concessions are listed. Under the GATT, the European Economic Community was obligated to establish duties which "shall not on the whole be higher nor more restrictive than the general incidence of the duties and regulations of commerce applicable in the constituent territories prior to the formation of such union" (article XXIV—5(a)). We recognize that this does not mean that the duty on each individual commodity must be so established. We believe that the Department of State's description of many of these items as tariff concessions obtained by the United States is not realistic nor fair. Actually the U.S. producers and exporters of prunes, canned pineapple, and fruit juices suffered serious losses rather than gained concessions as claimed by the State Department. Eighty-eight percent of the duties on orange juice which comprises the bulk of the trade in fruit juices are higher; on only 12 percent were the duties slightly lower. There was no real concession on canned fruit. The following table was taken from USDA Foreign Agricultural Service Circular FDAP 4-62.

Import duties of individual member states as of Jan. 1, 1957, compared with European Economic Community duties

Duties are ad valorem percentages on a cost and freight basis.

The above shows that the duty on prunes instead of having been reduced as inferentially claimed, from 18 percent ad valorem to 16 percent was, in effect, increased from 13 percent or 14 percent to 16 percent. The increases on fruit juices and canned pineapple as distinguished from a claimed reduction are as real but not as readily apparent. The claimed reduction on canned fruit ignores the fact that imports of canned fruits into the European Economic Community countries must bear, in addition to the ad valorem duty, a "supplemental duty on added sugar content." Only Benelux previously had such a sugar-added duty, and it was much lower than the EEC duty. The net result-no reduction as claimed for canned fruits.