3. Norway. All grains (state monopoly control), canned fruit cocktail, tomato juice, fresh apples and pears, and meat.

4. Sweden. All grains (minimum price below which imports may be prohibited), frozen beef, poultry meat and fat, milk and cream, butter and cheese, honey, and fresh apples and pears.

5. Denmark.-Variety meat and meat extracts, canned fruits and vegetables (except canned peaches, apricots, pineapples, and grapefruit sections), fruit juices, seed oils, wheat, and fresh apples and pears.

6. Austria.-Wheat, corn, and barley (state monopoly control), tobacco (state monopoly), poultry meat, lard, variety meats, dairy products, and fresh apples and pears.

7. Switzerland.-Under Swiss legislation, imports of any agricultural commodity which is also grown or produced in Switzerland may be controlled. Currently imports are controlled for wheat, feed grains, potatoes, cattle for slaughter, meat and meat products, vegetables, fresh apples and pears, butter, whole milk powder and casein, tallow and lard.

8. Greece. A relatively small amount of Greek trade is subject to import licensing. However, a number of commodities are subject to large advance cash deposits, consumption taxes or special regulations. Rice imports are subject to licensing and wheat and wheat flour are subject to special regulation.

9. Portugal. All imports require advance import registration certificates. For some commodities certificates are issued automatically. Agricultural commodities still subject to discrimination from the dollar area include cotton, edible oils, wheat, feed grains, rice, fresh citrus fruits, milk and butter.

10. Spain. Most of the agricultural imports are subject to import controls including wheat, feed grains, seed oils and oilseeds, meat and meat products. Basic foodstuffs, raw cotton, and wool are state traded.

11. Turkey.—All imports are subject to licensing. Licenses for items on the iiberalized list are granted freely upon application. Most of the agricultural commodities of interest to the United States are on the nonliberalized list including wheat, feed grains, seed oils, meat and meat products, and cotton. Tobacco and tobacco products are state traded.

12. Finland.-A fairly large number of products are subject to nondiscriminatory quota limitations. In addition, a smaller number of commodities are subject to individual discretionary licensing. Agricultural commodities still under import control include meat and meat products, condensed and powdered milk, wheat and wheat flour, rice and rice flour, barley and barley meal and flake, corn, lard. soybean oil, canned asparagus, almonds, filberts, and walnuts; lemons, prepared and preserved fruit, and citrus juices, including pineapple juice.

13. Ireland.-Raw onions, fresh or dried, fresh apples, feedgrains, and high special levies on canned fruit.

ATTACHMENT V

Examples of agricultural products still under import controls in non-European countries which it is expected will be negotiating with the United States during the second phase of the fifth-round tariff negotiations.

1. Canada. Turkeys, cheddar cheese, butter, dry skimmed milk, butter fat. wheat, wheat flour, and wheat starch: oats, ground oats, crimped oats, crushed oats, rolled oats, and oatmeal; and, barley including ground, crimped, meal, and flour.

2. Japan.—All commercial imports continue to be subject to industrial license. Three basic systems of import licensing are in use, as listed here in order of increasing restrictiveness: (1) the automatic approval system; (2) the automatic fund allocation system; and, (3) the exchange fund allocation system. Agricul tural items which the United States would like to see placed on the automatic approval system category include cotton, rice, barley, lemons, and certain canned fruit. Tobacco is state traded. October 1, 1961, 24 agricultural items put under automatic approval including some canned fruit and poultry and variety meats.

3. Australia.-Oilseeds and vegetable oils.

4. New Zealand.-All imports into New Zealand, except a small number of items specifically exempted, require import licenses. The licensing treatment for all imports is set forth in the yearly import licensing schedules. Licenses are issued on a global basis and are available for imports from all

sources.

5. Chile. All imports are permitted entry, but prior to their importation the importer must register the transaction with an auhorized commercial bank in Chile. In addition to duties and taxes, most imports are subject either to an import deposit guarantee requirement or to an additional ad valorem surcharge. There are eight import guarantee deposit categories ranging from 5 to 1,500 percent of the c.i.f. value as follows: Category A, 5 percent of c.i.f. value; category B, 20 percent; category C, 50 percent; category D, 100 percent; category E, 200 percent; category F, 400 percent; category H, 1,000 percent, and category J, 1,500 percent.

6. Israel.—All imports require individual license. Advance deposits of 20 to 40 percent of the c.i.f. value of the import are required before import licenses are issued. Certain priorities in licensing imports according to source of goods have been established as follows: (1) countries with which Israel has bilateral trade agreements; (2) Western Germany, under the reparations agreement; and, (3) countries extending assistance or making loans tó Israel to finance imports. Goods from other sources generally are licensed only if it is impossible or impractical to obtain the products concerned from the above ATTACHMENT VI

sources.

RECENT RESTRICTIVE NONTARIFF ACTIONS

Belgium.-Effective November 15, 1961, Belgium increased the licensing tax on the following items: cows on the hoof, from free to 4 Belgium francs per kilogram; other meat preparations, preserves, and cooked dishes containing less than 30 percent meat, from 0.40 Belgium francs to 0.80 Belgium francs per kilogram; other meat preparations containing 30 to 70 percent meat, from 1 Belgium franc to 2 Belgium francs per kilogram; and meat preparations containing more than 70 percent meat, to to 4 Belgium francs per kilogram.

Denmark. When Denmark imposed the embargo on feed grains on September 13, 1961, grains for feeding were transferred from the free list (not subject to a license) to the restricted list (subject to import license). Although the embargo was lifted on November 17, grains of this type are still subject to issuance of an import license. These grains include barley, oats, corn, buckwheat, millet, canaryseed, sorghum, and other grains; bran and other residual products from sifting, grinding, and other processing of grain and pulses; corn gluten fodder; and cereal flours and groats if denatured so as to be unsuitable for human consumption.

Italy. On October 5, 1961, the Government of Italy announced the deliberalization of live hog and pork imports from table A and B countries. Imports are now controlled on a quarterly quota basis. The announced quarterly quota for October to December 31, 1961, was 10,000 quintals (2,390,000 pounds) for nonCommon Market countries. Of the latter, 4,500 quintals must come from Argentina. In addition to pork, the Italian Government, effective October 6, 1961, suspended all imports of slaughter cattle, beef, and beef offals with the exception of frozen beef for the armed forces and frozen glands for use by the pharmaceutical industry. Also, effective October 10, 1961, the following forage crop seeds which have not been color tested were banned for importation: purple alfalfa, red clover, white clover, white dutch clover, ladino, crimson clover, Kerseem, and Egyptian clover.

Merico.-On December 9, the Mexican Government put rice imports under control. In the future all rice imports will require a previous permit from the Ministry of Industry and Commerce.

Netherlands.-The Government of the Netherlands recently added a turnover tax surcharge of 0.5 percent on imports of: lard and other rendered pig fat; unrendered fats of bovine cattle, sheep, or goats; and tallow (including premier jus) produced from the above fats.

Sweden-Because of an oversupply in the European market, licensing of eggs became effective on October 2, 1961.

Venezuela.-Effective October 5, 1961, the following items became subject to license: fruit pulp and paste of pears, apricots, and plums, without sugar and in containers of 21⁄2 liters or more; fruit pulp and pastes, not elsewhere specified; fruit juices or tropical fruits, pineapples, and citrus fruits; fruit extracts, natural; carpets, carpeting, floor rugs, mats, and matting of vegetable plaiting materials, not elsewhere specified.

Mr. SHUMAN. Thank you.

The CHAIRMAN. Thank you, Mr. Shuman. We appreciate your coming to the committee with the statement of position of the American Farm Bureau Federation.

Any questions of Mr. Shuman? Mr. Byrnes?

Mr. BYRNES. I want to express to Mr. Shuman my appreciation for including the attachment IV, which sets forth the examples of agricultural products still under import controls in western European countries, and also attachment VI relating to recent restrictive nontariff action. I would refer to that particular attachment, Mr. Shuman, at this time, and inquire as to whether these recent actions, such as the action on November 15, 1961, of Belgium; Denmark's action of September 13, 1961; Italy's action on October 5, 1961-all of these have recent origin-are in conformity with the General Agreement on Tariffs and Trade and taken under the authority for waivers, and so forth, that are contained in the General Agreement? Do you know? Mr. SHUMAN. I don't know the specific answer to that question. I do believe that a determination should be made by the competent Government department. I am sure that there have been many instances where the agreements negotiated have been ignored, and I am reasonably certain that our attachments present some of these examples.

Mr. BYRNES. I am wondering whether we were given, or any of the exporting countries were given, compensation as a result of the additional restrictions that were imposed in these recent actions by these various countries.

Mr. SHUMAN. It is our best belief, in consulting with Mr. Harris, that we have not been.

Mr. BYRNES. It seems to me that we make concessions in good faith, and then, if we make a change in our concession, we grant compensation for having made that change. In fact, I think we do it, in part, because of the insistence of the other countries that they are therefore entitled to this compensation. I am becoming rather disturbed that that is a one-way street and that, when others impose restrictions, we do not ask or insist on the compensation. Thus, we end up in a worse bargaining position than we were in when we started as far as any future negatiations are concerned, because they have added restrictions and we have granted concessions before. And so our bargaining power is thus reduced, simply by our inaction in insisting that our rights be fully asserted.

Mr. SHUMAN. I certainly agree that is often the case. That is the reason for our amendment suggested at the top of page 10, which is to amend section 201 to say that the President shall not proclaim a rate of duty at a lower level than now existing where it is determined that the country to be the beneficiary of this duty has not fulfilled its previous agreements for concessions.

Mr. BYRNES. What do you mean there when you talk about unlimited variable import fees? How does that work? What are these? Can you give us an example of what you mean by that?

Mr. SHUMAN. It is my understanding that in the Common Market countries agreement has been reached to utilize a variable import fee on wheat, feed grain, rice, and poultry imported from third countries. There are no limitations on these at the present time.

Mr. BYRNES. What do you mean by a variable fee? work?

How does it

Mr. SHUMAN. Well, it would be the difference between the target price for wheat in the Common Market and the world price. In other words, they are going to provide a fee large enough to protect their producers from the world price and imports from the United States, Canada, et cetera, regardless of how high they place their support or target price.

Mr. BYRNES. In other words, it would be similar to a situation where if we have a $2 a bushel support price on wheat, then on any wheat that would come in here at a lesser price we would automatically impose a fee to bring the market price up to $2? Is that the way this works?

Mr. SHUMAN. Yes. That would be the way it would work if we were using it. We would vary it with the world price or the support price. We would use the device to keep any and all competition out until our price had been maintained. We think this whole area ought to be subject to negotiation, especially as to the maximum of the variable fee. We ought to try to get these countries to agree that there is a point beyond which they would not go.

Mr. BYRNES. You are talking about the fee, or are you talking about the level of price that they will maintain?

Mr. SHUMAN. The fee. We think that we ought to try to get them to agree that there is a maximum ceiling on these variable fees.

Mr. BYRNES. Can you just educate me a little bit about this amendment on page 10, which I find rather intriguing? You have an exception "except those restrictions maintained in accordance with provisions in existing trade agreements."

How do you differentiate there?

Mr. SHUMAN. Some restrictions are permitted by our trade agreements; for example, a real balance-of-payments problem can justify quantitative restrictions. That problem in Europe is pretty well erased. We think that if any country is in violation of present trade agreements, or future ones as far as that goes, then we ought not to make further concessions until they have come into compliance with what they have agreed to do.

Mr. BYRNES. Would that be a limitation on the most-favorednation clause also?

Mr. SHUMAN. No; I don't think so. I think that this is only a limitation that applies to the trade agreements as negotiated.

Mr. BYRNES. Then it would only apply to the country with whom we actually did the bargaining on the individual item?

Mr. SHUMAN. Yes.

Mr. BYRNES. Do you think we should still extend the benefits of the most-favored-nation clause to a country that is in violation?

Mr. SHUMAN. No. I perhaps misinterpreted your question. Certainly, if they are in violation of a trade agreement, we would not want to negotiate an additional concession to them.

Mr. BYRNES. So that you would have this also as a limitation on the most-favored-nation clause?

Mr. SHUMAN. To that extent, I do not think so.

Mr. BYRNES. Thank you, Mr. Chairman.

Mr. KING (presiding). Any further questions? Mr. Betts.

Mr. BETTS. Mr. Shuman, I suspect that this area of agriculture has about the most baffling problems of any in our trade relations in re

spect to this bill and the Common Market. I was interested in an article in the New York Times of February 4 on this very problem. Here is one paragraph:

There is not much doubt that the Common Market country, by following reasonably closely the methods used here

it means the agricultural methods-

soon can become self-sufficient in food production. In fact, within a few years it is quite likely that Europe may become an exporter of food rather than an importer.

I suspect that is true in a lot of other countries that are agriculturalproducing countries, maybe Argentina. The thing that bothers me is, if all these areas are going to become self-sufficient and exporters, how do we get a market in there if they all want to export the same as we do?

Mr. SHUMAN. We will be able to maintain and expand our markets. If we succeed in convincing the other countries in the world, particularly the Common Market countries, that they should not try to protect uneconomic agricultural production-and the only way we are going to succeed in convincing them is as we demonstrate ourselves that we are not going to protect uneconomic agricultural productionthen I have no concern whatsoever that these countries will become self-sufficient agriculturally. In my judgment, if government steps out of the role of fixing prices and allocating production, then it will be much more feasible economically for much of Europe to buy their wheat, their feed grain, even some of their livestock, and a lot of their fruit products and vegetable products from other nations. I don't agree with the assumption in the article which you read that they can become economically self-sufficient.

If we and they both discontinue this practice of subsidizing uneconomic production, whether it is in agriculture or anything else, then there is no question that they will turn to us or other countries for a large portion of their food product needs.

Mr. BETTS. Then, a great deal of this whole problem depends upon just what agricultural program each country has; is that correct? Mr. SHUMAN. Yes, sir: it certainly does. And the proposals of the administration for a new farm bill are absolutely inconsistent with the proposals and the theory of this trade agreement legislation.

Mr. BETTS. What you are saying, then, is that in order for our farmers to get to the Common Market, we have to have an agricultural program that exists on less subsidy; is that correct?

Mr. SHUMAN. That is correct, on less subsidy to uneconomic production. If we are going to ask these folk in other countries to abandon protected, subsidized, inefficient, agricultural production and buy those products from us, it is absolutely imperative that we do likewise.

Mr. BETTS. I notice also in this article it discusses the fact that within the Common Market it has created an agricultural program with the avowed purpose of eventually reducing the subsidies within the Common Market: is that correct?

Mr. SHUMAN. We believe that a step is made in that direction, but they are still leaving in there the idea of a variable import fee, which would certainly give opportunity for them to nullify this expression of intention.