Our products are made by laminating together, under high heat and pressure, sheets of cloth or paper impregnated with a synthetic resin. Raw materials used include a wide variety, such as cottons, glass, asbestos, synthetic fibers, and natural wood fibers. The resins include phenolic, melamine, silicone, epoxy, and polyester. All of these materials are either produced in our own plants or purchased from other manufacturers in the United States. The high-volume output of sheets and plates alone, however, makes possible the production of the many other special products for industry.

Other forms to laminates such as decorative, horizontal, and vertical surfaces for use in private homes and buildings, and kitchen cabinets and sink tops, have become a standard factor in the American way of life.

Our industrial laminated products find many uses where electrical insulation, lightweight, machineability, corrosion resistance, and high-tensile strength and humidity resistance are essential. These unique characteristics are found only in laminated synthetic resin products and make them irreplaceable in the many different fields in which they find important use. Our industrial products are found in all electrical equipment and many mechanical products.

NATIONAL SECURITY

The essential character of this industry was clearly demonstrated during World War II. In normal times only about 25 percent of our industrial output goes directly into specific military use. The balance goes into essential civilian applications. In times of war, however, our entire output is convertible immediately and completely to production for military uses. The equipment and workers employed on decorative and civilian products in normal times will be applied overnight to military products. The same plants, the same equipment, and the same skilled workers and basic technology are hence immediately available to meet emergency needs.

In connection with prior considerations of reductions in our tariff duties, we made available to the Tariff Commission and to the Committee for Reciprocity Information, samples of products which we then produced for the military services. The march of technology and science has outmoded and rendered obsolete a number of those products and applications. By expenditures of large sums of money, we have developed new materials and improved existing materials. This has been done in close cooperation with the various defense services. Thus, many of the products which we now produce for defense purposes have been developed since World War II, particularly in the field of guidance systems for missiles. One of the outstanding examples which may be cited is the development of metal-clad laminates essential to printed circuitry for components of rockets and electronic equipment.

Competitive factors in this domestic industry have fostered continual efforts among our individual companies to maintain operations at the maximum possible level. Competition in our American market has resulted in a steadily decreasing price pattern for our products.

In the past years, this industry has enjoyed a small but important export market for its products. In recent years, however, the manufacturing of laminated products abroad has been established in substantially all industrial countries of the world and has had a rapid growth. The rising foreign industry has been aided in large part not only by assistance from our Government but by complete access to the technology developed in the United States. At the present time, the laminating industry in most foreign countries is modern, well equipped, and has technical know-how fully equivalent to our own. With lower costs of production all along the line and resultant lower prices, foreign producers have thus been able to steadily force us out of markets we previously enjoyed.

Foreign producers are exceedingly aggressive and with the increase in their productive facilities are consistently seeking new and bigger market outlets. As their own demands are satisfied, they are devoting attention more and more to markets outside their own countries. The present economic structure of this industry and the low tariff rates applicable to our products makes us completely vulnerable to the development of this competition.

A survey of our industry indicates that the strongly competitive nature of the products-a result of highly developed technology and modern facilities-have cut profits to the point where volume is the only factor sustaining near normal return on invested capital. Reduction in tariffs of 50 percent or 100 percent

will result in losses throughout the industry and will serve only to nurture growth among manufacturers in low-labor-cost countries.1

Through aggressive management and highly skilled labor, our 10,000 workers have enjoyed the fruits of our expanded volume. If competitors abroad usurp the domestic markets, as they have substantially accomplished in competition with us in the open export markets, a great percentage of our production employees will be forced to abandon years of training and know-how for new employment. Expertise attained through our research and development practices will be lost to our economy.

CONCLUSION

We respectfully submit that our industry's investment in the future of the United States will be completely wiped out by any further reduction in tariffs. We believe that H.R. 9900 does violence to the American way in that its basic theory, that of relocating, retraining, and financing our employees should they be released due to lost productive capacity and the closing of manufacturing facilities, can produce nothing but more bureaucracy.

In line with the dynamic growth of free competition we have continually invested in our industry and the U.S. economy. Our aggressive and progressive management and work force consideration rather than destruction.

If this industry is to continue as a freely competitive part of our economy and contribute to national security, new trade legislation must, in a realistic way, deal with our needs.

H.R. 9900 in its proposed form cannot provide for trade expansion-it will only tend to eliminate it.

The sharp increase in imports during the period 1960-61, from low-labor-cost areas is amply demonstrated by table L, attached, while U.S. export volume decreased (table II).

TABLE I.-Imports of laminated products, 1960-61-Continued

TWENTY-NINE MEMBERS OF THE INDUSTRIAL AND DECORATIVE LAMINATE SECTIONS OF THE NATIONAL ELECTRICAL MANUFACTURERS ASSOCIATION, NEW YORK, N.Y.

The BoMyte Co., Silverdale, Pa.

Brandywine Fibre Products Co., Wilmington, Del.

Consoweld Corp., Wisconsin Rapids, Wis.

Continental-Diamond Fibre Corp., Newark, Del.

Decar Plastic Corp., Melrose Park, Ill.

Durel Division of Caradco, Inc., Dubuque, Iowa.

Fabricon Products, a division of the Eagle-Picher Co., River Rouge, Mich.

Formica Corp. (a wholly owned subsidiary of American Cyanamid), Cincinnati, Ohio.

The Glastic Corp., Cleveland, Ohio.

McNeff Industries, Inc., Dallas, Tex.

The Mica Corp., Culver City, Calif.

Mico Division of Minnesota Mining & Manufacturing Co., Schenectady, N.Y.. National Plastic Products Co., Inc., Odenton, Md.

National Vulcanized Fibre Co., Wilmington, Del.

Northern Plastics Corp., La Crosse, Wis.

Panelyte Division, St. Regis Paper Co., Kalamazoo, Mich.

Panelyte Industrial Division, Thiokol Chemical Corp., Trenton, N.J.
Parkwood Laminates, Inc., Wakefield, Mass.

Permali, Inc., Mount Pleasant (Westmoreland County), Pa.

Pioneer Plastics Corp., Sanford, Maine.

Reiss Associates, Inc., Lowell Mass.

The Richardson Co., Melrose Park, Ill.

Rogers Corp., Rogers, Conn.

Spaulding Fibre Co., Inc., Tonawanda, N.Y.

Synthane Corp., Oaks, Pa.

Taylor Fibre Co., Norristown, Pa.

Virco Mfg. Corp., Los Angeles, Calif.

Westinghouse Electric Corp., Hampton, S.C.
Ralph Wilson Plastics, Inc., Temple, Tex.

STEPTOE & JOHNSON, Washington, D.C., March 23, 1962.

Re: H.R. 9900, Trade Expansion Act of 1962.
Hon. WILBUR D. MILLS,

Chairman, Committee on Ways and Means,
U.S. House of Representatives, Washington, D.C.

DEAR MR. CHAIRMAN: On February 16, 1962, you invited interested parties to submit written statements on H.R. 9900, the proposed legislation which would significantly change the existing laws pertaining to the negotiation and modification of trade agreements with other nations. On behalf of the Hamilton Watch Co., of Lancaster, Pa., one of the few remaining producers of jeweled watches in the United States, we ask your consideration of the following comments and suggestions. While we have limited our comments principally to those sections of the bill pertaining to "adjustment assistance" in the form of "extraordinary relief," we support wholeheartedly the statements of Gen. Omar N. Bradley, and others, with respect to the necessity of more definite standards. in the drafting of the provision for national security.

1. Administration bill seriously restricts relief to domestic industries injured by excessive imports

The provisions in H.R. 9900 for adjustment assistance in the form of so-called extraordinary relief would supplant the existing provision for escape clause relief to industries injured by excessive imports under concessions granted in trade agreements. Under an escape clause, tariff concessions on particular goods may be withdrawn or modified if increased imports of such goods cause or threaten serious injury to domestic industries producing like or directly competitive goods. Up to now, such relief has been an ordinary-although sparingly exercised-form of relief from seriously harmful concessions made by the United States. Under the administration bill, such relief would become extraordinary, the ordinary relief becoming some form of Government assistance to either labor' or industry, or both.

Such governmental assistance would not be given with a thought to saving injured industries, but to diverting men and facilities to some other pursuit, leaving the injured industry to expire. Under this new system, the industries immediately sentenced to death by tariff cuts which the bill contemplates would be those such as the watch industry, whose products have a very high labor content. Only by an intelligently administered program of granting escape clause relief under traditional procedures can the prospect of losing many vital and important industries be avoided.

2. Escape clause is a traditional part of our trade agreements

Members of the Ways and Means Committee are familiar with the operation of the escape clause provisions of our trade agreements program. These clauses have been included in our trade agreements, even without statutory provision therefor, since 1942. In 1947, President Truman required the inclusion of escape clauses in trade agreements by Executive order; and in 1951 Congress provided by law that all trade agreements entered into by the United States contain escape clauses. The wisdom of including an escape clause in trade agreements has been generally recognized outside the United States. The best example is article XIX of the General Agreement on Tariffs and Trade which

permits all countries signatory to that agreement to withdraw or modify concessions on imported products causing or threatening serious injury to their domestic producers. We are not aware of any other contracting party to the GATT which has evidenced any intention to forego the protection which article XIX affords their industries. Nor are we aware of any other GATT country which has indicated that it will sacrifice a single one of its domestic industries for the privilege of trading with the United States. We are, however, aware of many countries which have withdrawn or modified past concessions, or which have imposed discriminatory taxes on American products when they threaten domestic industries within those countries.

3. There has been no abuse in the administration of the escape clause provisions of our trade agreements program

Traditionally the investigation of claims of injury to a domestic industry by reason of concessions granted in trade agreements has been conducted by the Tariff Commission from 1947 to 1951 pursuant to Executive order, and from 1951 to date by virtue of section 7 of the Trade Agreements Extension Act of 1951, as amended. Following its investigation, usually after a public hearing, the Commission reports its findings and recommendations to the President who must report to the Congress if he does not accept the Commission's recommendations in cases where relief is found to be warranted. Of 131 investigations instituted to date, the Tariff Commission has completed 111, 18 having been dismissed or terminated prior to completion and 2 investigations are pending. In the 111 investigations completed, the Commission has forwarded 41 (8 of these on an evenly divided vote of the Commission) to the President who has invoked the escape clause in 15 cases. There are presently 11 escape clause proclamations in effect. The industries affected by these 11 currently effective escape clause proclamations are located in at least 21 of our States. Many of these States have more than one industry affected. These 21 States are:

Escape clause relief should not be subject to an arbitrary time limit but should be effective so long as injury persists.-The period during which an escape clause proclamation remains effective should not be limited by any arbitrary time limit as is proposed in the pending bill, but should last as long as necessary to prevent further injury to a domestic industry.

Under the provisions of H.R. 9900, any increase in duty resulting from an escape clause action terminates automatically after 4 years unless the President acts affirmatively to continue the increase. This is an arbitrary limit, since a 4-year period has no necessary relation to the industry's need for relief. It places the burden upon the industry concerned to persuade the Department of State and the President to take an affirmative act in order to retain the relief. Under present procedures, if a duty is increased by an escape clause proceeding, the higher duty remains in effect until affirmative action is taken to restore the concession. Pursuant to Executive Order 10401 providing for periodic review of escape clause actions, the Tariff Commission annually advises the President whether continued relief is warranted and reports to the President on developments in the affected industries. The annual reports submitted to the President constitute a careful analysis of present conditions in light of conditions existing at the time escape clause relief was found to be warranted. These annual reviews furnish a continuing guarantee that the escape clause action will not be continued longer than needed. They are clearly preferable to an arbitrary termination.

If the arbitrary termination of escape clause relief as proposed in the bill remains unchanged, any industry affected will be denied the present right to a full-scale investigation and hearing prior to withdrawal of relief. This is a very serious impairment of what has always been regarded as reasonable due process in tariff matters.