Table 15: U.S. imports for consumption from specified countries, 1957-60 Source: "Foreign Economic Policy," Hearings before the Subcommittee on Foreign Economic Policy of the Joint Economic Committee, Congress of the United States, December 4-14, 1961, p. 317. 72 TRADE EXPANSION ACT OF 1962 TUESDAY, APRIL 10, 1962 HOUSE OF REPRESENTATIVES, Washington, D.C. The committee met at 10 a.m., pursuant to recess, in the main committee room, New House Office Building, Hon. Wilbur D. Mills (chairman) presiding. The CHAIRMAN. The committee will please be in order. Mr. Secretary, we welcome you back to the committee this morning to discuss with us further your views with respect to the pending legislation. Sir, you are recognized. STATEMENT OF HON. LUTHER H. HODGES, SECRETARY OF COMMERCE; ACCOMPANIED BY EDWARD GUDEMAN, UNDER SECRETARY OF COMMERCE; HICKMAN PRICE, JR., ASSISTANT SECRETARY FOR DOMESTIC AFFAIRS; JACK N. BEHRMAN, DEPUTY ASSISTANT SECRETARY FOR INTERNATIONAL AFFAIRS; AND PETER T. JONES, DEPUTY ASSISTANT SECRETARY OF COMMERCE FOR TRADE POLICY Secretary HODGES. Thank you very much, Mr. Chairman and gentlemen. First of all, I would like to introduce those associates of mine in the Department of Commerce who are with me: Under Secretary of Commerce Gudeman on my right, Assistant Secretary for Domestic Affairs Price over here, Assistant Secretary for International Affairs, Dr. Behrman, and Mr. Peter Jones, Assistant on Trade Policy. The CHAIRMAN. You gentlemen are also welcome to the committee. Secretary HODGES. Mr. Chairman and members of the Committee on Ways and Means, I appreciate this opportunity to appear before you again in support of H.R. 9900, the Trade Expansion Act of 1962, and to reiterate my conviction that the bill is vitally important to the economic and political interests of the United States as a tool in the promotion of our export trade, as a stimulus to our economic growth, as a vital necessity in our relations with the expanding Common Market and other countries around the world, and indeed as an essential weapon in the cold war. I am going to cover in my statement several major points which have arisen in the course of the hearings. The first of these is nontariff barriers to trade; the second is the suggestion for a congressional veto over trade agreements negotiated by the executive branch under the authority of this bill; the third relates to the bill's judicial review pro vision; fourth is the central importance of the bill's provisions for adjustment assistance. I. Nontariff barriers to trade: The impact of nontariff barriers on our international trade is a point which has received considerable attention during the hearings before this committee. It has been suggested that the benefits we have gained in the past through tariff reductions have been lost because of the existence of quota restrictions, discriminatory tax measures, buy-national practices, and other such devices. We are well aware that any imposition of nontariff substitutes for tariff protection could frustrate the objectives of our trade policy. Where nontariff restrictions exist, we are today working-and will continue to work-for their elimination. I want to stress, however, that particularly insofar as the industrial countries of Western Europe are concerned-existing nontariff restrictions should not impair in any important way the value of tariff reductions we may negotiate. Until quite recently, the principal nontariff barrier to trade has been quantitative restrictions; that is, import quotas. For many years after the war, most nondollar countries maintained an extensive system of exchange and import controls. This they were permitted to do under the articles of agreement of both the International Monetary Fund and the General Agreement on Tariffs and Trade so long as they had balance-of-payments problems. They did so for real and important reasons: these controls were designed to conserve limited gold and dollar resources and to use these resources to purchase goods which would make the most important contribution to economic recovery. Ordinarily, the aim of the quota system was not protection against import competition as such, but in many cases such protection was the inescapable side effect. As long as quotas continued to exist, U.S.goods were often denied access to markets. As recovery proceeded in Europe and elsewhere, the United States pressed hard for the relaxation and elimination of quantitative restrictions. Our efforts have achieved a very large measure of success. With the establishment of currency convertibility by the principal West European countries in 1958, the justification for most quota restrictions in that area ceased to exist. Recognizing this fact, most such restrictions have by now been eliminated by West European nations, with the troublesome exception of quotas on certain agricultural products. This record-a real achievement-is spelled out in considerable detail in the Third, Fourth, and Fifth Annual Reports of the President to the Congress on the Trade Agreements Program. In addition, further detail has been supplied by the Department of Commerce since our appearance before the committee on March 12. This is not to say that quantitative restrictions have been totally eliminated, but usually where they exist today they exist because of balance-of-payments difficulties. We will continue to strive to eliminate such quantitative restrictions wherever they are not warranted. While working for the ending of quantitative restrictions, we at the same time have been following closely those nontariff practices abroad which may unjustifiably restrict our trade. These practices can occur in such fields as customs administration, marketing and labeling requirements, food and drug laws, buy-national practices |