TRADE AGREEMENTS EXTENSION ACT OF 1955

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP59-00224A000100310005-6
• Release Decision: RIFPUB
• Original Classification: K
• Document Page Count: 38
• Document Creation Date: November 11, 2016
• Document Release Date: January 19, 1999
• Sequence Number: 5
• Publication Date: April 25, 1955
• Content Type: REPORT

Approved For Release : CIA-RDPtale 00?24%00~0p 10005-6
n ar o. [[~~
84TH CONGRESS
1st Session
REPORT
No. 232
TRADE AGREEMENTS EXTENSION ACT OF 1955
Mr. BYRD, from the Committee on Finance, submitted the following
REPORT
Together with
MINORITY VIEWS
[To accompany H. R. 1]
The Committee on Finance, to whom was referred the bill (H. R. 1)
to extend the authority of the President to enter into trade agree-
ments under section 350 of the Tariff Act of 1930, as amended, and
for other purposes, having considered the same, reports favorably
thereon with amendments and recommends that the bill, as amended,
do pass.
H. R. 1 continues for 3 years the trade agreements program initiated
in 1934. During the 20 years of its operation United States trade
and the trade of the nations with which we have made agreements
has expanded and international commercial relations have greatly
improved.
The United States has an ever-growing surplus of the products of
our farms and factories which must find markets abroad. Other
nations need and desire our exports and are eager to negotiate for
mutually lower restrictions on trade. The importance of the trade
agreements program as a factor for expanded world trade has come
to be accepted by the leading free nations of the world.
The President in his speech of April 25, 1955, emphasized the
importance of foreign trade to the economy of the United States:
Trade expands markets for the increased output of our mine our farms and
our factories. In return we obtain essential raw materials and needed products
of the farms and factories of others. Likewise, the markets provided here for
the products of other free world countries enable them to acquire from us capital
equipment and consumer goods essential to their economic development and
higher living standards.
American agriculture sells abroad from one-fourth to one-third of major crops
such as wheat, cotton, and tobacco. Without these export markets there can be,
under current conditions, no enduring prosperity for the American farmer.
Approved For Release : CIA-RDP59-00224A000100310005-6
 Approved For Release : CIA-RDP59-00224A000100310005-6
2 TRADE AGREEMENTS EXTENSION ACT OF 19,155
American factories and labor likewiae have an important stake in foreign trade.
Last year this country sold over $9 billion of industrial products abroad. Over
3 million workers--American workers-are directly dependent on exports for
their jobs. Jungles the world round are being tamed today by American bull-
dozers; new mines are being opened by our drills and equipment; fields that
have been cultivated by hand for centuries are yielding new harvests to our
agricultural machines; our automobiles, trucks and buses are found wherever
there are roads; and new industries to employ the teeming millions within the
underdeveloped nations are being equipped with our machine tools.
The committee recognizes the need for a planned and well-organized
program so that trade expansion can be obtained without serious
injury to any segment of our economy. The President also recognized
this need in his speech when he said:
The expansion of our foreign trade should proceed on an orderly basis. Reduc-
tions in tariffs and other trade barriers, both here and abroad, must be gradual,
selective and reciprocal. Changes which would result in the threat of serious in-
jury to industry or general reduction in employment; would not strengthen the
economy of this country or the free world. The trade measures that I have
recommended to the Congress were prepared in recognition of these facts.
The bill as reported by the committee continues the trade agree-
ments program and strengthens the safeguards against serious injury
to the country's economy.
SUMMARY
H? R. 1 continues to June 30, 1958, the authority of the President to
enter into trade agreements. The present authority (extended by
Public Law 464, 83d Cong.) terminates on June 12, 1955. In addition
to the extension of the trade-agreements authority, the principal
features of H. R. 1 as reported. by the committee are as follows :
1. The President would be authorized to negotiate tariff reductions
by either of two alternative methods, which may not be used cumu-
latively.
(a) The first method authorizes the President to reduce., by a total
of 15 percent, tariff rates existing on January 1, 1955, in stages of not
more that 5 percent of such rates in each of the 3 years of the
authority;
(b) As an alternative the President is authorized to reduce those
rates which are higher than 50 percent of the value of an import to a
rate not less than 50 percent, in stages of not more than. one-third of
the reduction in any one year.
The committee desires to emphasize that this authority is subject
to all requirements of existing law for full public notice (including a
list of products on which concessions might be made by the United
States), public hearings, peril-point determinations, and escape-clause
procedures (as modified by the committee).
2. In the case of the proposal for a trade agreement announced on
November 16, 1954, the bill authorizes the same decreases in rates of
duty as are authorized by existing law (50 percent of the rate existing
on January 1, 1945), even though the agreement is signed after June
12, 1955.
3. The peril-point and escape-clause sections of the law were
amended to make more specific the definition of what constitutes an
industry. The escape clause was further amended to make more
specific the extent to which imports must affect an industry before
injury can be determined.
59-00224A000100310005-6
 Approved For Release : CIA-RDP59-00224A000100310005-6
TRADE AGREEMENTS EXTENSION ACT OF 1955 3
4. The President is given authority to adjust imports whenever he
finds,, after investigation, that an article is being imported, in such
quantities as to threaten to impair the national security.
5. The President would be required to submit to Congress an annual
report on the operation of the trade agreements program. The bill,
as reported, would require the Tariff Commission to continue to make
the report on the program now being made under Executive order.
6. Reports of the Tariff Commission containing recommendations
for escape-clause action are required to be made public upon sub-
mission to the President.
H. R. 1 as passed by the House was amended by the committee as
follows:
(1) The House bill specified certain types of general provisions
which may be included in a trade agreement and provided that no
such provision should be given effect in a manner inconsistent with
existing legislation of the United States. The committee deleted this
language. The committee also changed the bill so as to make clear
that its enactment should not be construed to determine or indicate
the approval or disapproval by the Congress of the executive agree-
ment known as the General Agreement on Tariffs and Trade (GATT).
These changes bring the language of the bill into conformity with that
used in prior extensions, and do not change the authority contained
in existing law. They were made in the light of the fact that there is
a pending House bill (H. R. 5550) authorizing United States member-
ship in the Organization for Trade Cooperation which would adminis-
ter the General Agreement on Tariffs and Trade.
(2) As passed by the House, the bill provided that rates of duty
existing on July 1, 1955, could be reduced by 15 percent. This date
has now been changed to January 1, 1955. Thus, the new 15-percent
authority would not be applicable in the case of any product whose
duty is reduced by 15-percent or more in the negotiations presently
going on in Geneva. These negotiations are concerned with a wide
range of commodities. Appropriate revisions were made in other
sections of the bill to reflect this change in the base date for the
15-percent authority.
(3) The authority to reduce duties by 50-percent of their January 1,
1945, level in the case of articles normally not imported or normally
imported in negligible quantities was deleted.
(4) The committee deleted those portions of the bill which author-
ized the President to round out rates of duty to an extent not exceed-
ing one-half of 1 percent ad valorem, in making changes in rates.
(5) Also deleted was the provision in the House bill providing that
the President should avoid to the extent practicable the subdivision
of classification categories.
(6) The committee added a provision requiring the Tariff Com-
mission to submit a factual report to the Congress at least yearly on
the operation of the trade agreements program.
(7), The committee also added a provision requiring the Tariff
Commission to make public immediately, upon transmission to the
President, its findings and recommendations in escape-clause pro-
ceedings, including any dissenting or separate findings, and to cause
a summary to be published in the Federal Register.
Approved For Release : CIA-RDP59-00224A000100310005-6
 Approved For Release : CIA-RDP59-00224A000100310005-6
4. TRADE AGREEMENTS EXTENSION ACT OF 1955
(8) The committee added provisions to the House bill relating to
the determination of injury for the purpose of escape-clause action
and defining "domestic industry" for peril-point determinations and
escape-clause cases.
(9) The committee had before it several proposals dealing with
specific commodities, namely petroleum, fluorspar, lead, and zinc. In
lieu of specific action on each of these the committee adopted an
amendment which specifies that the Director of the Office of Defense
Mobilization shall report to the President when he has reason to
believe that imports of a commodity are entering the United States
in such quantities as to threaten to impair the national security;
that the President shall cause au immediate investigation to be made
if he, feels there is reason for such belief; and that the President, if
he finds a threat to the national security exists, shall take whatever
action is necessary to adjust imports to a level that will not threaten
to impair the national security.
The committee believes that this amendment will provide it means
for assistance to the various national defense industries which would
have been affected by the individual amendments presented.
The White House issued on February 26, 1955, a, report based on it
:,turfy by the President's Advisory Committee on Energy Supplies
and Resources Policy which indicates the importance of a strong
domestic petroleum industry. That report states with regard to
crude oil imports and residual fuel oil imports:
An expanding domestic oil industry, plus a healthy oil industry in friendly
countries which help to supply the United States market,, constitute basically
important elements in the kind of industrial strength which contributes most to
a strong national defense. Other energy industries, especially coal, must also
maintain a level of operation which will make possible rapid expansion in. output
should that become necessary. In this complex picture both domestic production
and imports have important parts to play; neither should be sacrificed to the
ether.
Since World War II importation of crude oil and residual fuel oil into the
1Jnited States has increased substantially, with the result that today these oils
;;upply a significant part of the United States market for fuels.
The committee believes that if the imports of crude and residual oils should
exceed significantly the respective proportions that these imports of oils bore to
he production of domestic crude oil in 1954, the domestic fuels situation could
)e so impaired as to endanger the orderly industrial growth which assures the
nilEary and civilian supplies and reserves that are necessary to the national
defense. There would be an inadequate incentive for exploration and the dis-
oovery of new sources of supply.
In view of the foregoing, the committee concludes that in the interest of
national defense imports should be kept in the balance recommended above.
[t is highly desirable that this be done by voluntary, individual. action of those
who are importing or those who become importers of crude or residual oil. The
committee believes that every effort should be made and will be made to avoid
the necessity of, governmental intervention.
The committee recommends, however, that if in the future the imports of
crude oil and residual fuel oils exceed significantly the respective proportions
that such imported oils bore to domestic production of crude oil in 1954, appro-
priate action should be taken.
The committee recommends further that the desirable proportionate relation-
ships between imports and domestic production be reviewed from time to time
in the light of industrial expansion and changing economic and national-defense
requirements.
In arriving at these conclusions and recommendations, the committee has
taken into consideration the importance to the economies of friendly countries
of their oil exports to the United States as well as the importance to the United
States of the accessibility of foreign oil supplies both in peace and war.
IA-RDP59-00224A000100310005-6
 Approved. For Release : CIA-RDP59-00224A000100310005-6
TRADE AGREEMENTS EXTENSION ACT OF 1955 5
Although no similar study is presently available for fluorspar or
lead and zinc the committee feels that the Director of Defense Mobil-
ization will be cognizant of the serious situation existing in those
industries.
Congress can initiate and adopt such legislation as it might deem
advisable should the action needed to protect these essential industries
not be taken.
One commodity amendment would have changed the tariff classifi-
cation of hardboard, a commodity which would not be covered by
the amendment noted above. The committee, without in any way
prejudicing the hardboard amendment did not vote on it because it
concerns a matter of tariff classification and might better be taken
up separately or in conjunction with some more closely related legis-
lation. The merits of the hardboard amendment were therefore not
voted upon.
An amendment was offered by Senator Smathers which would
require the State Department to take positive action to protect
exports of agricultural products from discriminatory practices engaged
in by countries with which the United States has entered into recip-
rocal trade agreements. The amendment was withdrawn when it
was agreed by the committee that it would be more appropriate for
a statement to be made in the report expressing the wish of the com-
inittee that responsible officials in the executive branch of the Govern-
ment make a full investigation and take' appropriate action.
CHANGES IN EXISTING LAW
H. R. 1, as amended, changes existing law in the following respects:
(1) It extends the period during which the President is authorized
to enter into trade agreements from June 12, 1955, until the close of
June 30, 1958.
(2) The bill provides for changes in the existing limits on the Presi-
dent's authority to change rates of duty as shown in the following
table:
UNDER IT. R. 1 AS REPORTED BY
UNDER PRESENT LAW FINANCE COMMITTEE
1. Duties may be increased by up to 1. No change.
50 percent of the duty existing on Jan-
uary 1, 1945.
2. No transfers of articles may be
made between the dutiable and free
lists.
3. Any rate may be decreased by up
to 50 percent of the duty in existence
on January 1, 1945.
3. This authority expires on June 12,
1955, except that under H. R. lit may
be used in order to give effect to the
results of the negotiations, notice of
which was published on November 16,
1954.
4. Authority to reduce rates existing
on January 1, 1955, by 15 percent over
the 3-year period of the bill (reductions
of no more than 5 percent of the January
1, 1955, rate may be made in any one
year).
5. Authority to reduce rates above 50
percent ad valorem down to 50 percent
ad valorem (no more than one-third of
any such decrease of over 15 percent
may be made in any one year).
Approved For Release : CIA-RDP59-00224A000100310005-6
 Approved For Release : CIA-RDP59-00224A000100310005-6
TRADE AGREEMENTS EXTENSION ACT OF 1955
No part of the authorized 15 percent decrease in duty may become
initially effective after June 30, 1958. However, if any part of the
decrease has become effective and then the decrease is suspended for a
period because of an escape-clause action, the period of time the
decrease is not in effect is to be excluded in determining when the
3-year period expires.
(3) Under existing law the President "may" suspend the application
of concession rates to the products of countries that discriminate
against American commerce or engage in other conduct tending to
defeat the purpose of section 350. The bill as reported provides that
the President "shall as soon as practicable" suspend such application
in like circumstances.
(4) Under the bill as reported the President is required to submit
to Congress an annual report on the trade-agreements program. The
report is to contain among other things information on modifications
of trade agreements including a report on the inclusion of escape
clauses in existing agreements and information relating to agreements
entered into, An additional amendment removes the existing re-
quirement that the President report semiannually regarding action
taken to incorporate escape clauses into existing agreements.
(5) The annual report to the Congress by the Tariff Commission
on the operation of the trade-agreements program now required by
Executive order is, under the bill, made a statutory requirement.
(6) The existing escape-clause procedure has been amended to
require the Tariff Commission to immediately make public its findings
and recommendations to the President, including any dissenting or
separate findings and recommendations.
(7) The escape-clause procedure is further amended to require that
in the determination of serious injury "increased imports, either
actual or relative, shall be considered as the cause or threat of serious
injure to the domestic industry producing like or directly competitive
products when the (Tariff) Commission finds that such increased
imports have contributed materially to the serious injury or the
threat of serious injury to such industry."
(8) Under existing law there is no definition of what constitutes a
domestic industry for the' purpose of peril-point determinations and
escape-clause, procedure. The bill as reported in effect defines a
domestic industry to mean "that portion or subdivision of the pro-
ducing organizations manufacturing, assembling, processing, extract-
ing, growing, or otherwise producing like or directly competitive
products or articles." It is also provided that where a particular
business enterprise is engaged in operations involving more than one
industry, or more than one readily determinable segment of a single
industry, the, Commission shall, so far as practicable, "distinguish or
separate the respective operations of such business enterprise for the
purpose of determining injury."
(9) The law has been amended to give the President authority to
take such action as he deems necessary to adjust the imports of any
article to a level that will not threaten to impair the national security.
Such action may be taken only after the completion of a factual in-
vestigation. Responsibility for advising the President when there is
reason to believe that any article is being imported into the United
States in such quantities as to threaten to impair the national security
is vested in the Director of the Office of Defense Mobilization.
59-00224A000100310005-6
 Approved For Release : CIA-RDP59-00224A0001003t0005-6
TRADE AGREEMENTS EXTENSION ACT OF 1955
The first section of the bill provides that the bill when enacted
may be cited as the Trade Agreements Extension Act of 1955.
Section 2: This section extends the period during which the Presi-
dent is authorized to enter into foreign trade agreements for an
additional period, from June 12, 1955, through June 30, 1958.
Section 3: This section amends section 350 of the Tariff Act of
1930, as amended, which contains the basic authority to enter into
and carry out trade agreements.
Subsection (a) of section 350, containing five numbered paragraphs,
is set forth in the bill in its proposed amended form.
Paragraph (1) of subsection (a) sets forth the purpose for which
the President may enter into trade agreements. The text preceding
subparagraph (A) repeats existing law.
Subparagraph (A) of paragraph (1) authorizes the President to
enter into foreign trade agreements with foreign governments or
instrumentalities thereof.
Subparagraph (A) of paragraph (1), as amended by the committee,
contains a proviso, stating that the enactment of this bill shall not
be construed to determine or indicate the approval or disapproval
by the Congress of the executive agreement known as the General
Agreement on Tariffs and Trade.
Subparagraph (A) makes no change in existing law.
Subparagraph (B) of paragraph (1), authorizing the carrying out
of trade agreements by proclamation, makes no change in existing
law. The authority to carry out trade agreements by proclamation
is no broader (and no narrower) than under existing law (the terms of
which are identical with the terms of subparagraph (B)).
Paragraph (2) of subsection (a) is divided into subparagraphs (A),
(B), (C), and (D).
Subparagraph (A) continues unchanged the present prohibition
against increasing any rate of duty to a rate more than 50 percent
above the rate existing on January 1, 1945.
Subparagraph (B) continues unchanged the present prohibition
against imposing a duty on a duty-free article or exempting from duty
a dutiable article.
Subparagraph (C) continues unchanged (with respect to trade
agreements entered into before June 12, 1955) the present prohibition
against decreasing any rate of duty to a rate lower than 50 percent
below the rate existing on January 1, 1945. As noted above, a com-
mittee amendment to this subparagraph continues this authority with
respect to the negotiations involving Japan now going on in Geneva,
notice of which was published on November 16, 1954.
Subparagraph (D) fixes maximum limits on decreases in rates which
may be made to carry out trade agreements entered into on or after
June 12, 1955. A rate of duty may be reduced under two alternative
methods which are set out in clauses (i) and (ii). These alternatives
are not cumulative but the President may decrease a rate to the
lowest of the rates resulting from application of either of the alternative
methods.
Clause (i) authorizes decreases in any rate to 15 percent below the
rate existing on January 1, 1955 (that is, to a rate which is 85 percent
of the rate existing on January 1, 1955).
Approved For Release : CIA-RDP59-00224A000100310005-6
 Approved For Release : CIA-RDP59-00224A000100310005-6
8 TRADE AGREEMENTS EXTENSION ACT OF 1955
Clause (ii) authorizes decreases in rates of duty which are higher
than 50 percent ad valorem (or equivalent) to 50 percent ad valorem
(or equivalent). In the case of articles subject in whole or in part to
a specific rate of duty (i. e., 5 cents per pound, or 5 cents per pound
plus 20 percent ad valorem), the determination of whether a rate of
duty is higher than 50 percent ad valorem, and the determination of
a rate equivalent to the 50-percent ad valorem rate to which it may be
reduced, will be made by the President on the basis of the value of
imports of such products during a period which lie finds is representa-
tive. In making such determination, the President is to be guided,
to the maximum extent practicable, by the standards of valuation
for customs purposes contained in section 402 of the Tariff Act of 1930,
as the provisions of that section exist during the representative period.
The reference to the standards of valuation contained in section. 402
of the Tariff Act of 1930 is to make it clear that no action may be
taken under the second sentence of this clause which would result in
any change in existing rules for determining the basis on which any
ad valorem rate of duty is to be assessed. For example, if a rate of
50 percent ad valorem is established pursuant to such second sentence
with respect to an article subject to a rate of duty any part of which
may be based. on American selling price (as defined in sec. 402 (g) of
the Tariff Act of 1930), the new rate would be subject to application
on the basis of American selling price in the same mariner as the
ad valorem rate is applied under existing law.
:Paragraph (3) of subsection (a), divided into subparagraphs (A),
(B), and (C) establishes procedures for giving effect gradually (at
intervals of at least a year) to decreases (under the two alternatives
in paragraph (2) (D)) in rates made pursuant to agreements entered
into on or after June 12, 1955.
Subparagraph (A), except as limited by subparagraphs (B) and (C)
of paragraph (3), continues in substance the provision of existing law
that the proclaimed duties and other import restrictions shall be in
effect from and after such time as is specified in the proclamation.
Subparagraph (B) fixes the time limits within which the decreases
in rates authorized by subparagraph (D) of paragraph (2) described
above may be made effective. These time limits are as follows: A
decrease of no more than 5 percent of the rate existing on January 1,
1955, may become initially effective at one time if the total amount of
the decrease is 15 percent or less. If the total amount of the decrease
is greater than 15 percent, no more than one-third of the decrease may
become initially effective at one time. In the case of either of the two
alternatives, no part of the decrease after the first part can become
initially effective until the immediately previous part has been in
effect for at least 1 year.
Subparagraph (C) provides that (subject to an exception stated in
the second sentence of the subparagraph as explained below) no de-
creases under the first alternative method (the 15-percent decrease
authority) may be made effective after the expiration of the 3-year
period. which begins on July 1, 1955 (that is, after June 30, 1958).
The result of this limitation, when applied with the 1-year require-
ment for each decrease, is that the full 15-percent decrease under the
first alternative cannot be made unless the first 5-percent decrease
takes effect before July 1, 1956. Subparagraph (C) does not apply
to the alternative (the authority to reduce a rate to 50 percent ad
59-00224A000100310005-6
 Approved fAQr, W,9&~&msoh%r, P~9A9Q;;46QP01003~0005-6
valorem). The exception to the June 30, 1958, deadline in the case
of the first alternative method (the 15-percent decrease authority)
relates to the situation where, by reason of legislation of the United
States or action thereunder, a decrease which had been made by
virtue of the exercise of that authority and given effect, and which
was thereafter nullified, could be reapplied (and its successive stages,
if any, applied), even though the 3-year period extended beyond
June 30, 1958. The following illustrates the application of subpara-
graph (C) in a case where the first decrease takes effect before July 1,
1956:
(1) Assume the following:
(A) The first 5-percent decrease takes effect on April 15,
1956, and remains in effect until the close of November 30,
1956 (a total of 230 (lays).
(B) On December 1, 1956, the reduced duty is increased
as a consequence of an escape-clause action.
(C) The duty resulting as a consequence of the escape-
clause action remains in effect through May 31, 1957 (a
total of 182 days).
(D) On June 1, 1957, the decreased rate is restored.
(2) Under the facts stated in paragraph (1) above, the 5-percent
decrease will not have been in effect for a total period of 1 year
until the close of October 13, 1957. Thus, if the second decrease
is to become effective it must become effective no earlier than
October 14, 1957, and no later than December 29, 1958 (182 days
after June 30, 1958). In order to permit the third decrease to
become effective, the second decrease must become effective on
or before December 29, 1957.
(3) If the second decrease takes effect on October 14, 1957,
and remains in effect for 1 year through October 13, 1958, then
the third decrease could take effect at any time on or after Octo-
ber 14, 1958, and before December 30, 1958.
Paragraph (4) of subsection (a) provides that trade-agreement
concessions shall apply to imports of the goods of all countries,
except that the President shall, as soon as practicable, suspend the
application of these rates to the products of countries which dis-
criminate against American commerce or engage in other conduct
tending to defeat the purpose of section 350. As under existing law,
this provision is subject to section 5 of the Trade Agreements l+,xten-
sion Act of 1951, which requires the President to withdraw benefits
of trade-agreement concessions to imports from U. S. S. R. and from
any nation or area dominated or controlled by the foreign government
or foreign organization controlling the world Communist movement.
Paragraph (5) of subsection (a) authorizes the President to terminate
at any time, in whole or in part, any proclamation made pursuant to
section 350. This continues a provision of existing law; it has been
moved to this separate paragraph solely for reasons of clarity.
Subsection (b) of section 3 of the bill amends existing law to make
applicable to products of Cuba the new limits of authority to reduce
tariffs. In effect, this would permit maintenance of existing margins
of preference with respect to such products.
Subsection (c) of section 3 makes necessary technical amendments
to subsection (c) of section 350 to conform with substantive changes
in other parts of the bill. It is made clear that the limitations on
S. Rept. 282,84-1-2
Approved For Release : CIA-RDP59-00224A000100310005-6
 1opproved F oA %~ s: Fq Pf ~PT00?f9 , 000100310005-6
increases or decreases in duty relate to rates of duty other than rates
of duty which apply to products only by reason of action taken under
section 5 of the Trade Agreements Extension Act of 1951.
Subsection (d) of section 3 adds a new subsection (e) to section
350.
Paragraph (1) requires the President to submit to Congress an-
nually a report on the trade-agreements program as recommended by
the Commission on Foreign Economic Policy. The report is to con-
tain, among other things, information on modifications of trade
agreements, including a report on the incorporation of escape clauses
in existing agreements, and information relating to agreements
entered into.
Paragraph (2) requires the Tariff Commission to keep informed
concerning the operation and effect of provisions relating to duties
or other import restrictions of the United States contained in trade
agreements and to submit to the Congress, at least once a year, a
factual report on the operation of the trade agreements program.
This will require by law the report of the Tariff Commission hereto-
fore made pursuant to Executive order.
Section 4: This section deletes the requirements now in section 6
(b) of the Trade Agreements Extension Act of 1.9,51 that the President
report semiannually regarding action taken to incorporate escape
clauses into existing agreements. New developments on this score
would be covered by the annual report of the President provided for
in the new section 350 (e) described above.
Section 5: This section amends the last sentence of subsection (a)
of section 7 of the Trade Agreements Extension Act of 1951 to require
the Tariff Commission, in escape clause actions, to snake public
immediately its findings and recommendations to the President,
including dissenting or separate findings, and to cause a summary of
the findings to be published in the Federal Register.
Section 6: This section, added by the committee, amends the escape
clause procedure and peril point provisions of the existing law.
Subsection (a) amends subsection (b) of section (7) of the Trade
Agreements Extension Act of 1951, containing the criteria for arriving
at a determination in escape clause proceedings, by providing that
increased imi orts, either actual. or relative, shall be considered as the
cause. or threat of serious injury to the domestic industry producing
like or directly competitive products when the Commission finds
that such increased imports have contributed materially to the serious
injury or the threat of serious injury to such industry.
Subsection. (b) adds a new subsection (e) to section 7 defining (for
the purpose of the peril point and escape clause provisions) the terms
"domestic industry producing like or directly competitive products"
and "domestic industry producing like or directly competitive articles"
to mean that portion or subdivision of the producing organizations
manufacturing, assembling, processing, extracting, growing, or other-
wise producing like or directly competitive products or articles. It
is further provided that where a particular business enterprise is en-
gaged in operations involving more than one industry, or more than
one readily determinable segment of a single industry, the Com-
mission shall, so far as practicable, distinguish or separate the re-
spective operations of such business enterprise for the purpose of
determining injury.
59-00224A000100310005-6
 Approved For Release : CIA-RDP59-00224A000100310005-6
TRADE AGREEMENTS EXTENSION ACT OF 1955
Section 7: This section, also added by the committee, amends sec-
tion 2 of the act of July 1, 1954 (the 1954 Extension Act) by adding
a new subsection as follows:
(b) In order to further the policy and purpose of this section, whenever the
Director of the Office of Defense Mobilization has reason to believe that any
article is being imported into the United States in such quantities as to threaten
to impair the national security, he shall so advise the President, and if the Presi-
dent agrees that there is reason for such belief, the President shall cause an imme-
diate investigation to be made to determine the facts. If, on the basis of such
investigation, and the report to him of the findings and recommendations made
in connection therewith, the President finds the existence of such facts, he shall
take si..ch action as he deems necessary to adjust the imports of such article to a
level that will not threaten to impair the national security.
In compliance with subsection (4) of the Standing Rules of the
Senate, changes in existing law made by the bill, as reported, are
shown as follows (existing law proposed to be omitted is enclosed in
black brackets, new matter is printed in italics, existing law in which
no change is proposed is shown in roman) :
SECTION 350 OF THE TARIFF ACT OF 1930
SEC. 350. (a) (1) For the purpose of expanding foreign markets for the products
of the United States (as a means of assisting in establishing and maintaining a
better relationship among various branches of American agriculture industry,
mining, and commerce), by regulating the admission of foreign goo& into the
United States in accordance with the characteristics and needs of various branches
of American production so that foreign markets will be made available to those
branches of American production which require and are capable of developing
such outlets by affording corresponding market opportunities for foreign products
in the United States, the President, whenever he finds as a fact that any existing
duties or other import restrictions of the United States or any foreign country
are unduly burdening and restricting the foreign trade of the United States
and that the purpose above declared will be promoted by the means hereinafter
specified, is authorized from time to time-
[(1) To enter into foreign trade agreements with foreign governments or
instrumentalities thereof; and
[(2) To proclaim such modifications of existing duties and other import
restrictions, or such additional import restrictions, or such continuance, and
for such minimum periods, of existing customs or excise treatment of any
article covered by foreign trade agreements, as are required or appropriate
to carry out any foreign trade agreement that the President has entered into
hereunder. No proclamation shall be made increasing or decreasing by more
than 50 per centurn any rate of duty, however established, existing on January
1, 1945 (even though temporarily suspended by Act of Congress), or trans-
ferring any article between the dutiable and free lists. The proclaimed duties
and other import restrictions shall apply to articles the growth, produce, or
manufacture of all foreign countries, whether imported directly, or indirectly:
Provided, That the President may suspend the application to articles the
growth, produce, or manufacture of any country because of its discriminatory
treatment of American commerce or because of other acts (including the
operations of international cartels) or policies which in his opinion tend to
defeat the purposes set forth in this section: and the proclaimed duties and
other import restrictions shall be in effect from and after such time as is
specified in the proclamation. The President may at any time terminate
any such proclamation in whole or in part.]
(A) To enter into foreign trade agreements with foreign governmentQ or
instrumentalities thereof: Provided, That the enactment of the Trade Agreements
Extension Act of 1955 shall not be construed to determine or indicate the approval
or disapproval by the Congress of the executive agreement known as the General
Agreement on Tariffs and Trade.
(B) To proclaim such modifications of existing duties and other import
restrictions, or such additional import restrictions, or such continuance, and for
Approved For Release : CIA-RDP59-00224A000100310005-6
 Approved For Release : CIA-RDP59-00224A000100310005-6
1;, TRADE AGREEMENTS EXTENSION ACT OF 1955
such minimum periods, of existing customs or excise treatment of any article
covered by foreign trade agreements, as are required or appropriate to carry out
any foreign-trade agreement that the President has entered into hereunder.
(2) No proclamation pursuant to paragraph (1) (B) of this subsection shall be
made--
(A) Increasing by more than 50 per centum any rate of duty existing on
January 1, 1945.
(B) Transferring any article between the dutiable and free lists.
(C) In order to carry out a foreign trade agreement entered into by the Presi-
dent before June 12, 1955, or with respect to which notice of intention to negotiate
was published in the Federal Register on November 16, 1954, decreasing by more
than 50 per centum any rate of duty existing on January 1, 1945.
(D) In order to carry out a foreign trade agreement entered into by the Presi-
dent on or after June 12, 1955, decreasing (except as provided in subparagraph
(i) of this paragraph) any rate of duty below the lowest of the following rates:
(i) The rate 15 per centum below the rate existing on January 1, 1955.
(ii) In the case of any article subject to an ad valorem, rate of duty above
50 per centum (or a combination of ad valorem rates aggregating more than
50 per centum), the rate 50 per centum ad valorem (or a combination of ad
valorem rates aggregating 50 per centum). In the case of any article sub-
ject to a specific rate of duty (or a combination of rates including a specific
rate) the ad valorem equivalent of which has been determined by the Presi-
dent to have been above 50 per centum during a period determined by the
President to be a representative period, the rate 50 per centum ad valorem
or the rate (or a combination of rates), however stated, the ad valorem equiva-
lent of which the President determines would have been 50 per centum, during
such period. The standards of valuation contained in section 402 of this
Act (as in effect during the representative period) shall be utilized by the
President, to the maximum extent he finds such utilization practicable, in
making the determinations under the preceding sentence.
(3) (A) Subject to the provisions of subparagraphs (B) and (C) of this paragraph,
the provisions of any proclamation made under paragraph (1) (B) of this subsection,
and the provisions of any proclamation of suspension under paragraph (4) of this
subsection, shall be in effect from and after such time as is specified in the proclamation.
(B) In the case of any decrease in duty to which paragraph (2) (D) of this subsection
applies-
(i) if the total amount of the decrease under the foreign trade agreement does
not exceed .15 per centum of the rate existing on January 1, 1955, the amount of
decrease becoming initially effective at one time shall not exceed 5 per centum of
the rate existing on January 1, 1955;
(ii) except as provided in clause (i), not more than one-third of the total
amount of the decrease under the foreign trade agreement shall become initially
effective at one time; and
(iii) no part of the decrease after the first part shall become initially effective
until the immediately previous part shall have been in effect for a period or periods
aggregating not less than one year.
(C) No part of any decrease in duty to which the alternative specified in paragraph
(2i (D) (i) of this subsection applies shall become initially effective after the expiration
of the three-year period which begins on July 1, 1955. If any part of such decrease
has become effective, then for purposes of this subparagraph any time thereafter during
which such part of the decrease is not in effect by reason of legislation of the United
States or action thereunder shall be excluded in determining when, the three-year
period expires.
(4) Subject to the provisions of section 5 of the Trade Agreements Extension Act
of 1951 (19 U. S. C., sec. 1362), duties and other import restrictions proclaimed
pursuant to this section shall apply to articles the growth, produce, or manufacture of
all foreign countries, whether imported directly or indirectly: Provided, That the
President shall, as soon as practicable, sespend the application to articles the growth,
produce, or manufacture of any country because of its discriminatory treatment of
American commerce or because of other acts (including the operations of international
cartels) or policies which in his opinion tend to defeat the purpose of this section.
(5) The President may at any time terminate, in whole or in part, any proclamation
made oursuant to this section.
(b) Nothing in ttis section shall be construed to prevent the application, with
respect to rates of duty established under this section pursuant to agreements
with countries other than Cuba, of the provisions of the treaty of commercial
reciprocity concluded between the United States and the Republic of Cuba on
59-00224A000100310005-6
 Approved For Release : CIA-RDP59-00224A000100310005-6
TRADE AGREEMENTS EXTENSION ACT OF 1'95 5 13
December 11, 1902, or to preclude giving effect to an exclusive agreement with
Cuba concluded under this section, modifying the existing preferential customs
treatment of any article the growth, produce, or manufacture of Cuba. Nothing
in this Act shall be construed to preclude the application to any product of Cuba
(including products preferentially free of duty) of a rate of duty not higher than
the rate applicable to the like products of other foreign countries (except the
Philippines), whether or not the application of such rate involves any preferential
customs treatment. No rate of duty on products of Cuba shall in any case be
decreased by more than 50 per centum of the rate of duty, owever established,
existing on January 1, 1945 (even though temporarily. suspended by Act of
Congress) ] shall be decreased--
(1) In. order to carry cut a foreign trade agreement entered into by the President
before June 12, 1955, by more than 50 per centum of the rote of duty existing on
January 1, 1945, with respect to products of Cuba.
(2) In order to carry out a foreign trade agreement entered into by the President
on or after June 12, 1955, below the applicable alternative specified in subsection
(a) (2) (C) or (D) (subject to the provisions of subsection (a) (3) (B) and (C)),
each such alternative to be read for the purposes of this paragraph as relating
to the rate of duty applicable to products of Cuba. With respect to products of
Cuba, the limitation of subsection (a) (2) (D) (ii) may be exceeded to such
extent as may be required to maintain an absolute margin of preference to which
such products are entitled.
(c) (1) As used in this section, the term "duties and other import restrictions"
includes [(1)] (A) rate and form of import duties and classification of articles,
and [(2)] (B) limitations, prohibitions, charges, and exactions other than duties,
imposed on importation or imposed for the regulation of imports.
(2) For purposes of this section ..
(A) Except as provided in subsection (d), the terms "existing on January 1,
1945" and "existing on January 1, 1955" refer to rates of duty (however estab-
lished, and even though temporarily suspended by Act of Congress or otherwise)
existing on the date specified, except rates in effect by reason of action taken pur-
suant to section 5 of the Trade Agreements Extension Act of 1951 (19 U. S. C.,
sec. 1362).
(B) The term "existing" without the specification of any date, when used with
respect to any matter relating to the conclusion of, or proclamation to carry out, a
foreign trade agreement, means existing on the day on which that trade agreement
is entered into.
(d) (1) When any rate of duty has been inc reased or decreased for the duration
of war or an emergency, by agreement or otherwise, any further increase or de-
crease shall be computed upon the basis of the postwar or postemergency rate
carried in such agreement or otherwise.
(2) Where under a foreign trade agreement the United States has reserved the
unqualified right to withdraw or modify, after the termination of war or an emer-
gency, a rate on a specific commodity, the rate on such commodity to be considered
as "existing on January 1, 1945" for the purpose of this section shall he the rate
which would have existed if the agreement had not been entered into.
(3) No proclamation shall be made pursuant to this section for the purpose of
carrying out any foreign trade agreement the proclamation with respect to which
has been terminated in whole by the President prior to the date this subsection is
enacted.
(e) (1) The President shall submit to the Congress an annual report on the opera-
tion of the trade agreements program, including information regarding new negotia-
tions, modifications made in duties and import restrictions of the United States,
reciprocal concessions obtained, modifications of existing trade agreements in order to
effectuate more fully the purposes of the trade agreements legislation (including the
incorporation therein of escape clauses), and other information relating to that program
and to the agreements entered into thereunder.
(2) The Tariff' Commission shall at all times keep informed concerning the opera-
tion and effect of provisions relating to duties or other import restrictions of the United
States contained in trade agreements heretofore or hereafter entered into by the Presi-
dent under the authority of this section.. The Tariff Commission, at least once a year,
shall submit to the Congress a factual report on the: operation of the trade-agreements
program.
Approved For Release : CIA-RDP59-00224A000100310005-6
 Approved For Release : CIA-RDP59-00224A000100310005-6
14 TRADE AGREEMENTS EXTENSION ACT OF 1955
SECTION 6 OF THE TRADE AGREEMENTS EXTENSION ACT OF 1951
Sec. B. (a) No reduction in any rate of duty, or binding of any existing customs
or excise treatment:, or other concession hereafter proclaimed under section 350
of the Tariff Act of 1930, as amended, shall be permitted to continue in effect
when the product on which the concession has been granted is, as a result in
whole or in part, of the duty or other customs treatment reflecting such concession,
being imported into the United States in such increased. quantities, either actual
or relative, as to cause or threaten serious injury to the domestic industry pro-
ducing like or directly competitive products.
(b) The President, as soon as practicable, shall take such action as may he
necessary to bring trade agreements heretofore entered into under section 350
of the Tariff Act. of 1930, as amended, into conformity with the policy established
in subsection (a) of this section.
[On or before January 10, 1952, and every six months thereafter, the President
shall report to the Congress on the action taken by him under this subsection.]
SECTION 7 OF THE TRADE AGREEMENTS EXTENSION ACT OF 1951
SEC. 7. (a) * * * [Within sixty days, or sooner if the President has taken
action under subsection (c) of this section, the Tariff Commission shall transmit
to the Committee on Finance of the Senate and the Committee on Ways and
Means of the 11:ouse of Representatives an exact copy of its report and recom-
mendations to the President.] The Tariff Commission shall immediately make
public its findings and recommendations to the President, including any dissenting
or separate findings and recommendations, and shall cause a summary thereof to be
published in the Federal Register.
(b) 1[n arriving at a determination in the foregoing procedure the Tariff Com-
mission, without excluding other factors, shall take into consideration a downward
trend of production, employment, prices, profits, or wages in the domestic industry
concerned, or a decline in sales, an increase in imports, either actual or relative
to domestic production, a higher or growing inventory, or a decline in the propor-
tion of the domestic market supplied by domestic producers. Increased imports,
either actual or relative, shall be considered as the. cause or threat of serious injury to
the domestic industry producing like or directly competitive products when the Com-
mission finds that such increased imports have contributed materially to the serious
injury or the threat of serious injury to such industry.
* * * * * * *
(e) As used in this Act, the terms "domestic industry producing like or directly com-
petitive products" and "domestic industry producing like or directly competitive
articles" mean that portion or subdivision of the producing organizations manufactur-
ing, assembling, processing, extracting, growing, or otherwise producing like or di-
rectly competitive products or articles. Where a particular business enterprise is
engaged in operations involving more than one industry, or more than one readily
determinable segment of a single industry, the Commission shall, so far as practicable,
distinguish or separate the respective operations of such business enterprise for the
purpose of determining injury.
ACT OF JULY 1, 1954 (19 U. S. C., Sc. 1352a)
9Ec. 2. (a) No action shall be taken pursuant to such section 350 to decrease
the duty on any article if the President finds that such reduction would threaten
domestic production needed for projected national defense requirements.
(b) In order to further the policy and purpose cf this section, wheneter the Director
of the Office of Defense Mobilization has reason to believe that any article is being
imported into the United States in such quantities as to threaten to impair the national
security, he shall so advise the President, and if the President agrees that there is
reason for such belief, the President shall cause an. immediate investigation to be made
to determine the ,facts. If, on the basis of such investigation, and the report to him of
the findings and recommendations made in connection therewith, the President finds
the existence of such facts, he shall take such action as he deems necessary to adjust
the imports of such article to a level that will not threaten to impair the national
security.
59-00224A000100310005-6
 Approved For Release : CIA-RDP59-00224A000100310005-6
INDIVIDUAL VIEWS OF SENATOR GEORGE W. MALONE,
OF NEVADA, IN OPPOSITION TO H. R. 1
I oppose H. R. 1 for the following reasons:
1. H. R. 1 broadens and extends an act wrong in principle, disas-
trous in its effects, and adverse to the national interest, economy,
security, and independence.
2. H. R. 1 continues a program which denies to American citizens
rights and representation guaranteed them under the Constitution in
matters of foreign trade and commerce, and which makes the resources
and skills of millions of Americans pawns of international political
manipulation.
3. H. R. 1 reaffirms a policy which denies American producers equal
access with foreign producers to our own American markets, fosters
gross discrimination against important segments of our national life,
creates unemployment, and jeopardizes industries, jobs, and in-
vestments.
4. H. R. 1 proposes to chain the United States for 3 more years to
a global authority, the General Agreement on Tariffs and Trade, or
GATT, in which our markets are bartered away in secret on foreign
soil by diplomatic underlings of the State Department to the advan-
tage of foreign nations.
5. H. R. 1 is unsound, unfair, uneconomic and incompatible with
article I, section 8, of the Constitution of the United States of America.
6. H. R. 1 reenacts the 1934 Trade Agreements Act which has failed
in all of its stated objectives during the 21 years of its existence.
7. H. R. 1 perpetuates a plan conceived by a prior administration
seeking power over the legislative branch of our Government, and sold
to the 73d Congress through irresponsible pledges by the then
President that "no sound and important American interest will be
injuriously disturbed." Industries not only have been seriously
disturbed but severely damaged and partially destroyed. Spokesmen
for many of these industries have testified to that effect in hearings
on H. R. 1 before the Senate Finance Committee, and have expressed
their vigorous opposition to H. R. 1.
8. H. R. 1 repeats the false premise of predecessor acts that the
trade-agreements program is "for the purpose of expanding foreign
markets for the products of the United States." The program has
survived for 21 years only through the artificial trade stimulation of
foreign wars, preparations for foreign wars, a continuing war economy
induced by threats of further foreign wars; gifts and grants of more
than $100 billion to foreign nations financed by the American tax-
payers, and through the susceptibility of the Congress to foreign and
domestic propaganda linking our giveaway trade and dollars to fears
of new foreign wars.
9. H. R. 1 reauthorizes a trade program geared to a war economy
only, and which defeats normal international trade relations in times
of peace by making such trade a tool of international politics, placing
control over exports in the hands of central governments which include
not only republics such as ours but monarchies and dictatorships.
Approved For Release : CIA-RDP59-00224A000100310005-6
 Approved For Release : CIA-RDP59-00224A000100310005-6
1 TRADE AGREEMENTS EXTENSION ACT OF 1955
10. H. R. 1, like the original Trade Agreements Act of 1934 and
subsequent extension acts, grants to the President authority to enter
into future international trade agreements of any type, applicable to
any products, and subject only to a blanket percentage limitation.
In other words, H. R. 1 bestows on the President a blank check to
remake the :industrial and economic map of the United States.
11. H. R. 1 requires no referral of trade treaties and agreements to
the Congress to which the Constitution, article 1, section 8, confers the
total responsibility of laying and collecting duties or tariffs and of
regulating our trade and commerce with foreign nations. Nor is
ratification by a vote of two-thirds of Senate Members present re-
quired, as stipulated in article II, section 2, of the Constitution with
respect to treaties. The executive branch has chosen to avoid this
obligation by labeling trade treaties "trade agreements."
12. H. R. 1, as did its predecessors, permits the President to transfer
the authority delegated to him by the Congress to subordinates.
Throughout the life of the act and program the Chief Executive has,
to all purposes and effects, so redelegated his authority under the act,
principally to subordinates in the State Department.
13. H. R. 1, like its predecessor acts, not only permits the President
to transfer his delegated powers to subordinates, but permits these
subordinates to transfer their authority to GATT, the General Agree-
ment on Tariffs and Trade, which meets in Geneva, Switzerland.
Subordinates of the President have so done since 1947, transferring to,
and diluting their authority among, the 34 nations now participating
in. GATT.
14. H. R. 1 in no way precludes the delegation of authority to the
President from being passed on by him to subordinates in the State
Department;. or in any other agency of the executive branch of his
choosing. Nor does it preclude the State Department from con-
tinuing to pass on its delegated authority to an international GATT.
Thus the ultimate delegation is thrice removed from the Congress, to
which the Constitution entrusted responsibility for the regulation of
foreign commerce. It is thrice removed by the Congress' own. hand.
15. H. R. 1 not only continues this delegation thrice removed but
broadens it. Unlike its predecessor extension acts, H. R. 1 grants the
President direct authority to commit the United States to GATT, to
a revised GATT, or to GATT-type international organizations, as
witnesses of broad legal experience have testified before the Senate
Finance Committee during hearings on H. R. 1. GATT has never
been before the Congress for approval or rejection on its merits, but
tie back door approach to such sanction is being utilized under sub-
section A of section 3 of H. R. 1.
16. H. R. I employs the word "reciprocal" in relation to so-called
"concessions" which it infers other nations may make to the United
States. Neither word appears in the original 1934 Trade Agreements
Act. Both words are inventions to sugar-coat an act which has never
been administered with other than one purpose--- to cut tariffs on
imports to the United States. Other nations have not reciprocated
these tariff cuts. Testimony has been offered in Senate Finance
Committee hearings that 32 nations favored by cuts in tariffs on prod-
ucts they export to the United States have increased their own tariffs
within a recent period. Of 91 trading countries, 68 require import
licenses on American products generally, and 9 others on some products
59-00224A000100310005-6
 Approves Ag 'A it vac JA- F 9A9~;3489Q0100311p005-6
or a total of 77; and 38 require exchange permits. Ten others link
exchange permits to import licenses. Only 10 apply no control
regulations at all on imports from the United States.
17. H. R. 1 would authorize further tariff reductions on imports to
the United States.
18. H. R. 1 unlike any predecessor act, authorizes the President to
commit the United States in a trade agreement with one country in
behalf of trade concessions by it to a third country. The object of
this device which has no relation to our own foreign exports, is to
assist Japan.
19. H. R. 1 proposes that the 84th Congress extend the Trade
Agreements Act 3 years beyond the present termination date of June
12, 1955, or for more than a year and a half beyond the life of the
present Congress. Foreign situations may well change during this
period that will increase the adverse effects of the 1934 Trade Agree-
ments Act on American industries and markets. Yet H. R. 1 would
commit the 85th Congress and a possible new administration for a
year and a half to an obsolete trade-agreements program, subject only
to repeal.
20. H. R. 1 would likewise, to all purpose and effect, commit the
next Congress and administration for a similar period to the General
Agreement on Tariffs and Trade, or GATT, in which our markets are
put on a foreign auction block to the advantage of 33 foreign nations
and, as has occurred frequently in the past, to the disadvantage of the
United States.
21. H. R. 1, while extending the Trade Agreements Act for:', years,
would require the President to submit to the Congress an annual
report on the operation of the program. The value of such it report
is vague, considering that Congress already has, in derogation of the
Constitution, article 1, section 8, delegated to the President complete
authority to regulate foreign commerce. The value of such a report
is further diminished in view of the fact that GATT sessions are
held in secret and its decisions are at times restricted for periods of
more than a year. It should be obvious, therefore, that this provi-
sion in H. R. 1 is merely "window dressing" to make a bad bill appear
more attractive. Public knowledge of our foreign trade needs and
problems can come only when the Trade Agreements Act expires
and the United States is~freed from its present chains to GATT.
22. H. R. 1, in extending the firm life of GATT, is making a
European colony out of the United States with respect to trade and
commerce, subject not to a king as in pre-Revolution days, but to
the governments of 33 foreign states through their representatives in
GATT.
23. H. R. 1, by continuing GATT, jeopardizes the Nation's farm
program by subjecting our restrictions on imports of certain agricul-
tural commodities and our price-support system to continual attack
and negotiation in an international organization in which the United
States has one vote. At the ninth session of GATT, held recently
in Geneva, Switzerland, GATT was given assurances by the State
Department that it will seek to modify provisions of section 22 of
the Agriculture Adjustment Act, imposing import quotas on certain
products, as "changing circumstances warrant such modification" and
will "promptly" terminate them when "circumstances. requiring the
action no longer exist." Thus H. R. 1 could be used to negate other
S. meat. 232, 84-1-3
Approved For Release : CIA-RDP59-00224A000100310005-6
 Approved For Release : CIA-RDP59-00224A000100310005-6
18 TRADE AGREEMENTS EXTENSION ACT OF 1955
legislation passed by the Congress, such as the Agricultural Adjust-
ment .Act.
24. H. R. 1 would entangle the Nation's economy, industry, and
trade further in an international web which leaves neither Congress
nor its victims, the American producers, any recourse other than the
so-called "escape clause," which in turn vests sole final authority in
the President. Dying industries may apply for relief under the escape
clause, but in all the cases filed to date the Chief Executive has granted
relief in only :five.
25. II. R. 1 would admittedly injure some American industries, ac-
cording to the Secretary of State who testified before the Senate Fi-
nance Committee on March 15, 1955:
I do not think you can have imports without some damage, and if your rule is
that you will not have imports or tariff reductions or sustain them if there is any
damage to anybody, then I think it becomes unworkable.
26. H. R. 1. is not a "trade" bill. It is a foreign policy bill. It is
a bill to permit the President's subordinates in the State Department
to sacrifice industries, jobs and investments in the United States for a
presumed advantage to foreign nations if, in the opinion of the State
Department, such a sacrifice will implement its foreign policy.
27. H. R. 1 provides the State Department the chips of our domestic
economy to use as pawns in its game of international politics. In re-
turn for the sacrifice of domestic industries such as coal, textiles, lead,
zinc, glassware, and other resources and commodities, the State De-
partment seeks only lip-service good will from. nations governed by
self-interest. Secretary Dulles' argument for II. R. 1 was on the as-
sumption that it is an instrument of foreign policy and that "inter-
national repercussions would be major and their consequences be be grave" if it were tampered with by the Congress, to which sole re-
sponsibility for foreign trade regulation is given by the Constitution.
28. II. It. 1 will weaken our defense potential. Further tariff cuts
will be authorized. on imports of critical and strategic minerals and
materials in which this country is self-sufficient. Impoirts of these
materials, many of which are produced in the shadow of the Iron
Curtain, will be encouraged, despite the fact that they would be cut
off' from us completely in time of war. More American mines, vital
to our national security but unable to meet low-wage foreign competi-
tion, will be closed down and more American miners will be idled.
Many of these mines and much of our mining skills will be lost entirely
and cannot be restored in time of national emergency.
29. H. if. I will compel American workers in manufacturing as
well as mining fields to compete for 3 more years in their own American
market against foreign products produced at foreign wage rates one-
fourth to one-tenth the prevailing wage in the United States for
comparable work and skills. Invasion of our markets by the products
of this low-wage foreign labor will continue to be. actively encouraged
by the State .Department, intent on encouraging increased competitive
imports.
30. H. if. 1 perpetuates in a modified degree the fraud perpetrated
by sponsors of the 1934 Trade Agreements Act that it was legislation
to benefit "agriculture, industry, mining, and commerce." The act
has, instead, worked injury on these segments of our domestic econ-
omy. UseJ as an instrument of foreign policy the program has
encouraged and developed foreign agriculture, industry, :mining, and
59-00224A000100310005-6
 Approve ,Fpj- M aw QIk4R S9cQQ 24AO00100,M0005-6
commerce at the expense of our own industries, investors, working-
men, and markets. H. R. 1. extends this wrong.
31. H. R. 1 contains not;one word of assurance, hope, or encourage-
ment for the American workingmen or investors in industries produc-
ing for the American market. There is not one word guaranteeing
any American market or supplier against suffocation by foreign
imports. There is not one word in this bill that offers real safeguards
from cutrate foreign competition to any American employed in a
domestic industry or whose dollars are invested in America. The fact
that no assurances in behalf of domestic producers for the domestic
market are contained in the bill may explain the many verbal ex-
pressions of the administration in this field of discussion. There have
been a plethora of verbal assurances, but none of them are embodied in
the bill. They are not in the bill because the administration did not
want them in the bill and opposes their inclusion.
32. H. R. 1, stripped to its basic purpose, is a bill to cut tariffs on
imports at whatever cost to America's welfare, economy, and security.
The Trade Agreements Act, which H. R. 1 would extend, was sold
to the 73d Congress by the then administration "as a means of assisting
in the present emergency in restoring the American standard of living,
in overcoming domestic employment and the present economic depres-
sion, in increasing the purchasing power of the American public, and
in establishing a better relationship among various branches of
American agriculture, industry, mining, and commerce." It also was
promoted as being "for the purpose of expanding foreign markets for
the products of the United States."
Sponsors of H. R. 1 have somewhat modified this extravagant
language in the 1934 act. In both instances the State Department
has been the chief proponent of the legislation and the original author.
H. R. 1 omits references to unemployment, purchasing power and
living standards. It retains the language that it is for the purpose of
expanding foreign markets, and also that it is being done as a means
of "establishing and maintaining a better relationship among various
branches of American agriculture, industry, mining, and commerce."
It is significant that after 22 years of administration the administrators
of the program are still. proposing it as a means of establishing such
better relationship.
The Trade Agreements Act was approved June 12, 1934. The
first agreement, with Cuba, was signed in September of that year.
Agreements with Belgium, Sweden, and Haiti became effective in
1935. But it was not until 1936 that trade agreements with impor-
tant exporting countries became effective. A limited agreement with
Canada was concluded, and expanded in 1937. Agreements also
became effective during 1936 with Brazil, Columbia, Hondurus, the
Netherlands, Switzerland, Nicaragua, Guatemala, France, Finland,
Costa Rica, and San Salvador.
In 1937, after 16 trade agreements had been concluded, 7,700,000
American workingmen and women were unemployed. In 1938
there were 10,390,000 unemployed, and in 1939 there were 9,030,480
unemployed, a million and a quarter more than in 1931, more than
double the number in 1930, and more than 6 times the number who
were unemployed in 1929.
Approved For Release : CIA-RDP59-00224A000100310005-6
 pprov-4 ForARelease : CIA- RDP59 00224A000100310005-6
Relief from unemployment came with the war boom, not as a result
of the Trade Agreements Act which, 5 years after its enactment found
17.2 percent of the Nation's labor force out of work.
In 1947, after 29 bilateral trade agreements had been negotiated,
President Truman, on December 16 of that year, proclaimed the
General Agreement on Tariffs and Trade in effect as of January 1,
1948, thus substituting multilateral trade treaties for bilateral agree-
ments as envisioned in the 1934 Trade Agreements Act. The Presi-
dent claimed the Trade Agreements Act as authority for this action.
Two million sixty-four thousand Americans were unemployed in
1948, or 3.4 percent of the civilian labor force. One year later, in
1949, 3,395,000 civilian workers were unemployed, or .5.5 percent.
In June 1950, the President involved the United States in the Korean
conflict and, unemployment dropped to 3,142,000 or 5 percent. Un-
employment fell to below 2 million in the war years, but returned to
5 percent at the conclusion of active combat. In 1954, according to
the Labor Department, 3,230,000 Americans were unemployed.
Agriculture has suffered an even more severe drop in employment,
despite the assurances of the Trade Agreements Act. .[n 1936 the
number of Americans employed in agriculture was 10 million. In
1.954 the number had been reduced to 6,504,000, the lowest number
in 25 years for which statistics have been made available by the
Labor Department.
In January 1955, the American labor force, including members of
the Armed Forces, totaled 66,700,000. Of this number 3,203,000
were serving in the Armed Forces and 60,150,000 were employed in
civilian activities. Agricultural workers had been further reduced
in number to 5,297,000. The Labor Department listed 3,347,000
workers in all activities as unemployed, 1,205,000 more than the
2,142,000 in 1947 when President Truman propelled us into the
General Agreement on Tariffs and Trade.
Of equal pertinence is the fact that 2 years ago there were 37
distressed areas in the United States; 1 year ago there were 80, and as
of March of this year, the latest month on which the Labor Depart-
ment has reported, there were 156.
These areas and the principal industrial or other source of their
economic distress are listed in Senate Report No. 60 of the 84th
Congress, and in remarks made by the senior Senator from Nevada. on
the floor of the Senate on April 18, 1955. At that time he pointed
out that coal mining, which is suffering from imports of petroleum
products from foreign nations, including the Near East and Indonesia,
is the principal industry in 33 distressed areas, while other areas in
which lead, zinc, or fluorspar mining is a leading industry also are in
distress. industry
Textile manufacture is the No. 1 industry in 20 distressed areas
and the second dominant industry in. 5 others. Electrical machinery
is the industry most adversely affected by unemployment in 7
distressed areas and among the principal industries affected in 5 others.
The chemical industry is suffering unemployment in four areas. All
of these industries are being forced to compete against an import
flood from low-wage foreign nations.
Unemployment in machinery industries, reflecting injury caused
by competitive imports from abroad, has brought distress to 19 areas
and contributed to distress in 9 others. Electrical machinery is
59-00224A000100310005-6
 Approv@0Af1prA(R,e1$eS: .59P0024k000100310005-6
manufactured in 13, nonelectrical in 10, and farm machinery in 5.
Metal industries are hurt in many areas, and mining, including lead,
zinc, and fluorspar; pottery, china and glassware, machine tools,
leather products, and lumber are suffering in others.
Bureau of Census records show that in 1.954 the United States
imported approximately $800 million in textile fibers and manu-
factures; $350 million in machinery of which $70 million represented
farm machinery; a quarter billion dollars worth of chemicals and
related products; $1,700 million in metals and manufactures not in-
cluding machinery and vehicles; $1,200 million in nonmetallic minerals,
including more than $825 million in petroleum and petroleum products
brought in from foreign lands to compete against America's own fuels
industries and workers; a quarter billion dollars in lumber and saw-
mill products and $100 million in manufactured woods such as ply-
wood, shingles, and veneers.
More than $200 million in meat and dairy products were imported
to compete against America's agriculture, dairy, and livestock in-
dustries, and imports of fish, shellfish, and fisheries products totaling
more than $200 million contributed to the distress of coastal fisheries
and fishermen.
Every import of a foreign product that competes with products
produced in the United States puts American dollars in pockets of
foreign workers and investors, and takes dollars out of the pockets of
workers and investors in identical or similar production here.
Every imported product that is competitive against lAni.erican
mined or manufactured goods competes against American producers
for America's own markets, and every tariff cut under the Trade
Agreements Act and GATT has augmented the advantage of foreign
producers in such competition.
The original Trade Agreements Act authorized the President to
reduce tariffs 50 percent. Subsequent legislation authorized hirer to
cut remaining tariff rates 50 percent, or a total reduction of 75 percent
from 1930 rates. On the overall, a 68-percent reduction has been
granted. Actually, the reduction has been greater than that as a
result of inflation and dollar devaluation.
H. R. 1 permits further reductions of 5 percent a year for 3 years, a
bonus to foreign producers who receive it greater than the di` id.ends
paid by many Anierican industries affected by import competition.
This bonus to foreign producers may well add to the distress of the
156 areas scattered among 32 of the 48 States, or create new distressed
areas in these or other States.
Of these States Alabama has 7 distressed areas, Arkansas and
Connecticut, 1 each; Georgia, 2; Illinois, 4; Indiana, 8; Iowa, 2;
Kansas, 1; Kentucky, 11; Maine and Maryland, 1 each; Massachu-
setts, 8; Michigan, 11; Minnesota, 1; Missouri, 4; New Jersey, 2;
New Mexico, 1; Now York, 8; North Carolina, 5; Ohio, 9; Oklahoma,
2; Oregon, 1; Pennsylvania, 20; Rhode Island and South Carolina, 1
each; Tennessee, 5; Texas, 1; Vermont, 2; Virginia, 4; Washington, 1;
West Virginia, 13; and Wisconsin, 4.
Senators front these States may obtain further information on this
by consulting Senate Report No. 60 of the 80th Congress, or the
table printed in the Congressional Record of April 1.
Witnesses appearing for many industries testified in specific and
concrete terms before the Senate Finance Committee concerning job
Approved For Release : CIA-RDP59-00224A000100310005-6
 Approved For Release : CIA-RDP59-00224A000100310005-6
TRADE AGREEMENTS EXTENSION ACT OF 1955
cutbacks in their respective industries, caused in whole or in part by
import dumping.
No witness presented specific and concrete evidence of any nature
concerning :increases in employment in any industry resulting from the
trade-agreements program. Estimates have been offered from time
to time by proponents of reduced tariffs relating to employment in
foreign trade, but in every instance they have been general, vague, and
not backed up by facts, figures, or evidence.
The employment cutbacks sustained by industry as it result of im-
port competition from low-wago countries reaping the advantage of
our open, low-tariff markets are very real, and are supported by
statistics.
H. R. 1 willincrease unemployment and .distress in the- United
States if it is enacted, and the State Department, the principal pro-
ponent of the legislation, knows it.
Perpetuation of a foreign policy which has brought 3 wars in less
than 40 years has been placed above the interests and protection of
American industries, workers, and investors, and H. R. 1 will. enable
the SState Department to continue this policy.
THE RECORD ON EXPORTS~OF FARM COMMODITIES
H. R. 1 will continue a program which has failed its promises to
agriculture and which threatens agriculture with grievous injury.
Cotton exports during the 14 years prior to passage of the 1.934
Trade Agreements Act averaged more than 7 million bales a year. In
the 4 depression years of 1930, 1931, 1932, and 1933, they were
7,048,000, 8,989,000, 8,647,000, and 8,366,000 bales, respectively.
During the prewar years following passage of the 1934 Trade .Agree-
ments Act they averaged less than 5 million bales a year. Exports
frorr. 1946 through 1953, .the postwar years, averaged only 4,234,500
bales per year, and in 1952 and 1953 were 3,110,000 and 3,798,000,
respectively. The peak export year for cotton was 1926, when
11,281,000 bales were shipped abroad, and the lowest year was 1941,
7 years after passage of the Trade Agreements Act, when only 1,202,-
000 bales were exported. Pearl Harbor occurred on December 7, 1941,
too late to have caused this tremendous drop in exports.
Neither the trade-agreements program, which H. R. 1 would extend,
nor GATT, which it would continue, have expanded our cotton export
markets.
Tobacco exports during the 14 years prior to the 1934 Trade .Agree-
ments Act averaged more than 500 million pounds per year; topped
600 million pounds in 1929, a record that has never subsequently been.
equaled. Under the trade-agreements program, tobacco exports
averaged 369 million pounds per year prior to Pearl Harbor, and
averaged 400,043,000 during the war years. They hit their low in
1940, 6 years after passage of the Trade Agreements Act--179,626,000
pounds. Since the war they have averaged slightly less than 480
million pounds per year, or 20 million pounds less than the average for
the pre-1934. trade-agreements period.
The Trade Agreements Act has not expanded export markets for
tobacco. Whatever effect it may have had at all has been to de-
crease them.
Butter exports duringthe 14 ;years prior to the 1934 Trade Agree-
ments Act averaged 4,777,000 pounds per year. Following passage
59-00224A000100310005-6
 Approvor G9*:J4,7P-Q24A00010010005-6
of the Trade Agreements Act in 1934 they averaged 2,514,000 pounds
per year for the 7-year period, 1935 through 1941.
Butter exports in 1952 and 1953 totaled 387,000 and 521,000
pounds, respectively.
The Trade Agreements Act, which H. R. 1 would extend, has failed
to expand our butter export market.
Wheat exports prior to the depression averaged 214,784,000 bushels
per year without foreign aid or other forms of surplus disposal abroad.
For the 7 years following passage of the 1934 Trade Agreements Act
through 1941 they averaged 55,887,000 bushels per year. Since the
war wheat exports, including shipments under gifts and grants, have
averaged 385,482,000 bushels per year. In 1953 they dropped to
219,359,000 bushels, or approximately the average in the 1930's.
The Department of Agriculture advises us that it has no breakdown
distinguishing between exports shipped in the course of normal trade,
and those financed in whole or in part through foreign aid or subsidies.
Rye shipments during the 1920's averaged 27,186,000 bushels per
year. Both in 1922 and 1925 exports of rye exceeded 50 million
bushels. For the 14 years prior to the 1934 Trade Agreements Act,
including depression years, they averaged 19,524,000 bushels per year.
Following approval of the Trade Agreements Act rye exports averaged
1,231,000 bushels per year. During the war they averaged 2,592,000
bushels per year, and since the war the average per year has been
3,164,000 bushels. In 1952 exports of rye dropped to 320,000 bushels
and in 1953.to 7,000 bushels. The Trade Agreements Act of 1934,
which H. R. 1 would extend, obviously has not expanded the export
market for this agricultural commodity.
Oat exports during the 10 years prior to the depression averaged
17,039,000 bushels per year. During the depression years prior to
approval of the Trade Agreements Act they averaged 3,778,000
bushels.
The average for the prewar years from 1934, the year the Trade
Agreements Act was passed, through 1941, was 3,872,000 bushels.
Since the war oat exports have averaged 12,979,000 bushels per year,
with exports declining each year since 1948 to 4,1.43,000 in 1952 and
3,446,000 in 1953.
The Trade Agreements Act, which H. R. 1 would extend, does not
appear to have expanded our oat export market.
Farm commodities subject to quantitative restrictions under sec-
tion 22 of the Agricultural Adjustment Act are cotton, wheat, oats,
rye, rye flour and meal; barley and barley malt; butter, cheese, dried
whole milk, dried skimmed -nilk, dried buttermilk, dried cream,
malted milk and compounds; and peanuts. These restrictions are
the subject of vigorous action in GATT, and may be jeopardized if
GATT is continued. H. R. 1, by continuing the Trade Agreements
Act, also continues the authority presumed by the State Department
to authorize American participation in the GATT.
Manufactured articles in the United States have no protection from
import competition such as quotas or quantitative restrictions.
Neither have our domestic mines and mineral resources.
The following table, prepared by the Department of Agriculture,
lists the quotas which are applicable to agricultural commodities, and
which our continuance in GATT would jeopardize.
Approved For Release : CIA-RDP59-00224A000100310005-6
 A proved For Release : CIA-RDP59-00224A000100310005-6
24 TRADE AGREEMENTS EXTENSION ACT OF 1955
TA111.E I.-Commodities currently subject to quantitative restrictions under sec. 22
of the Agricultural Adjustment Act, as amended, including the quota and beginning
date of quota year
Begin-
ning date
(1954)
Cotton:
Long staplo 1119-inch and longer but less than 1334e-inch)_____
Pounds -----
Fob. 1
45
656
420
Short staple (under 1311-inch other than harsh or rough) ______-
----- do-------
Sept. 20
,
,
14
.516
882
Ilarsh or rough under 4-inch-------- ------ ------------------
C
- - ---do-----
---do-----
,
,
70000
000
otton waste 9______________
}rains:
_--do_____
,
1 5:482,509
Pi heat" -------- -----
"'
?
Bushels- . - _.
May 29
800
000
heat products
----------.-----------------------------
Pounds____-.
do---
,
4
000
000
0 ats, hulled, unhulled and unhulled ground --------------- _ _
B
Bushels--___
Oct. 1
,
,
8 40
000
000
ye, rye flour, and meal -------------------------
B
l
Pounds _ _ _ _
July 1
,
,
1.86
000
000
ar
ey and barley malt___..____------------------------------
Dalry products:
Butter--------------------------------------------------------
Cheese:
Oheddar ---------------------------------------------------
Bushels-----
----- do-------
Oct. 1
,
,
8 27, 500,000
707,000
2
780
100
Blue mold ------------- -------------------------------
--do-------
,
,
4
167
000
Fdam and Gouda ----------------------,-------------_
Italian 9.____--____--_ __-
--do-------
-----do
,
,
4,600,200
9
200
100
Driedwholemilk - _ ------------------ --- -----------------
_--do
,
,
000
7
Dried skimmed milk ----- ------------- --- _------_--.-------
----- do-------
,
000
1
807
Driedbutterrnilk--------- ---.- -------- ------------__-,
_ --do-------
,
,
496
001)
Dried cream---------- - -- ------------- -----------------
M
lt
d
l
-- do------
,
500
a
e
mi
k and compounds______________ ______--------- I'oanttts:
-----do-------
do
6,000
Peanuts 19-------------- _
do-------
000
1
709
Supplemental quota for period ending June 30, 1955 11___--___
----- do-------
,
,
12 51, 000,000
I Country quotas are prescribed for short-staple cotton and cotton waste.
2 Card strips made from cotton under J 1o inches, comher waste, lap waste, sliver waste, roving waste,
howccer, not more than 3331 percent shall he, filled by cotton wastes other than comfier waste made from
cottons of 13je inches or more in staplo length in the case, of certain countries.
3 Excludes all certified or registered seed approved for planting under the Federal Seed Act.
4 'Phe quota excludes wheat and flour "unfit for human consumption" or for experimental purposes.
e Includes flour, semolina, crushed or cracked, and similar wheat products.
The annual quota of 40 million bushels permits 39,312,000 bushels from Canada and 688,000 pounds from
Oher foreign countries.
7 Of which not more than 15,00n pounds may he rye flour and rye meal.
9 Permits not more than 27,225,000 bushels from Canada end not more than 275,000 bushels from other
fcreign countries. The Canadian Government indicated it will voluntarily limit exports of feed barley
to the United States to 35 million l.ushels during this same period.
9Ttalian-type cheese made from cow's milk including Romano, Reggiano, Parmesan, Provolone,
1'rovolette and Shrinz.
10 Shelled basis, including whether shelled, not shelled, blanched, salted, prepared or preserved (including
roasted. but not peanut butter).
11 By Presidential Proclamation an additional quota of 51 million pounds became applicable on March
10 for the quota period ending June 30, 1955.
12 Shelled basis. Tneludes pemuts shelled, blanched, salted, prepared or preserved (including roasted
peanuts but not including peanuts not shelled or peanut butter).
With respect to the total export picture:
The United States exported 12.9 percent of its production of mov-
able goods in 1921 ; 9.1 percent in 1923; 10.1 percent iu 1925; 9.9
percent in 1927; 9.6 percent in 1929; 7.3 percent in the depression
year of 1931: and 6.5 percent in the depression year of 1933. Economic
aid for foreign countries at the expense of American taxpayers had
not then been invented and all exports were in the normal course of
fore( n trade and. commerce.
In 1935, 1937, .and 1939, still without the advantage of American
economic or military aid, the United States exported 6.7, 7.5, and 7.5
percent of its total production in movable aid.
In 1941, after lend-Lease had been inaugurated, exports totaled
7.9, but of these only 5.8 percent were normal commercial transactions.
Not including exports financed solely by the American taxpayer,
exports for the postwar years, beginning in 1946, have amounted to
the following percentages of the total production of movable goods in
the United States: 4.9, 7.3, 5.4, 4.8, 4.1, 6.2, 5.8, 5.1, and 6. These
IA-RDP59-00224A000100310005-6
 Approve TgAF~prA M9.: PAiRPPkPrOP24A00010(310005-6
percentages were prepared from basic data and with the assistance of
the Department of Commerce.
The 1934 Trade Agreements Act has not served to expand foreign
markets for the products of the United States.
H. R. 1, in providing the legislative authority under which the State
Department expects to continue United States participation in
GATT, contributes to the subordination of the national policy on
agriculture commodities to an international organization meeting in
foreign lands.
Dispatches from Geneva, Switzerland, on March 7, 1955, reported:
The 34 member nations of the General Agreement on Tariffs and Trade
(GATT) have granted permission for the United States to continue to impose
quantitative restrictions on certain agricultural imports. But the members also
gave other countries permission to retaliate and seek compensation if affected by
the restrictions, which are contained in section 22 of the United States Agricul-
tural Adjustment Act.
This section mainly concerns imports of dairy produce and had led to clashes
with several nations in the past. Holland once retaliated by slashing imports of
wheat from the United States. The United States is understood to have assured
GATT that it will end any restrictions under the act as soon as they are no longer
needed and consult with interested countries before taking further action.
Confirmation of this report comes from GATT itself in a release
titled:
"Decision to Grant a Waiver to the United States in Connection
with Import Restrictions Imposed Under Section 22 of the United
States Agricultural Adjustment Act of 1933 as Amended."
Under a subhead: "Conditions and procedures" the document
states:
1. Upon request of any contracting party which considers that its interests
are seriously prejudiced by reason of any import restriction imposed under section
22, whether or not covered by this decision, the United States will promptly
undertake a review to determine whether there has been a change in circumstances
which would require such restrictions to be modified or terminated. In the
event the review shows such a change, the United States will institute an inves-
tigation in the manner provided by section 22.
2. Should the President of the United States acting in pursuance of section 22
cause an investigation to be made to determine whether any existing import
restriction should be modified, terminated or extended, or whether restrictions
should be imposed on the import of any additional product, the United States
will notify the contracting parties and, in accordance with article XXIII of the
general agreement, accord to any contracting party which considers that its
interests would be prejudiced the fullest notice and opportunity, consistent with
the legislative requirements of the United States, for representations and con-
sultation.
3. The United States will give due consideration to any representations sub-
mitted to it including:
(a) When investigating whether any existing import restriction should be
modified, terminated, or extended, representations that a greater volume. of
imports than is permitted under the import restriction would not have the effects
required to be corrected by section 22, including representations that the volume
of imports that would have entered in the absence of governmental agricultural
programmes would not have such effects.
(b) When investigating with respect to import restrictions on additional prod-
ucts, representations with regard to:
(i) the effect of imports of any product upon any programme or operation
undertaken by the United States Department of Agriculture or any agency
under its direction, or upon the domestic production of any agricultural
commodity or product thereof for which such a programme or operation is
Approved For Release : CIA-RDP59-00224A000100310005-6
 Approved For Release : CIA-RDP59-00224A000100310005-6
'26 TRADE AGREEMENTS EXTENSION ACT OF 1955
undertaken, including representations that the volume of imports which
would have entered in the absence of governmental agricultural programmes
will not have the effects required to be corrected by section 22;
(ii) the representative period to be used for the determination of any
quota.
(c; Representations by any contracting party that the portion of a total
quota allotted or proposed to be allotted to it is inequitable because of circurn-
stances that operated to reduce imports from that contracting party of the product
concerned during the past representative period on which such import quota is
based.
4. As soon as the President has made his decision following any investigation
the United States will notify the contracting parties and those contracting parties
which have made representations or entered into consultations. If the decision
imposes restrictions on additional products or extends or intensifies existing
restrictions the notification by the United States will include particulars of such
restrictions, and the reasons for them regardless of whether the restriction is
consistent with the general agreement.
5. The United States will remove or relax each restriction permitted under
this waiver as soon as it finds the circumstances requiring such restriction no
longer exist or have changed so as no longer to require its imposition in its existing
form.
6. The contracting parties will make an annual review of any action taken by
the United States under this decision. For each such review the United States
will furnish a report to the contracting parties showing any modification or re-
moval of restrictions effected since the previous report, the restrictions in effect
under section 22 and the reasons why such restrictions (regardless of whether
covered by this waiver) continue to be applied and any steps it has taken with a
view to a solution of the problem of surpluses of agricultural commodities,
Elsewhere the GATT "decision" states:
(a) To help solve the problem of surpluses of products for which section 22
import quotas'now are in effect, the United States Government has taken positive
steps aimed at reducing 1955 crop supplies by lowering support price levels or by
imposing marketing quotas at minimum levels permitted by legislation; and that
it is the intention of the United States Government to continue to seek a solution
of the problem of surpluses of agricultural commodities.
(b) The assurance of the United States Government that it will discuss proposals
under section 22 with all countries having a substantial interest prior to taking
action, and will give prompt consideration to any representations made by it.
(c) That it is the intention of the United States Government promptly to ter-
minate any restrictions imposed when it finds that circumstances requiring the
action no longer exist, and to modify restrictions whenever changed circumstances
warrant such modification.
All of these spineless pledges and commitments, of course, leave
the ,kinerican farmer behind the eight ball and beholden to the whims
of his foreign competitors.
The representations, pledges, and commitments reported in this
GATT document, relating to legislation passed by the Congress in
behalf of the Nation's agriculture industry, were not made by the
Congress but by subordinates in the executive branch representing
the united States at the GATT sessions in Geneva. The State
Department contends that authority for such representation and par-
ticipation in GATT is given to it in the Trade Agreements Act.
H. R. 1 would extend this act and therefore the presumption of this
authority by the State Department.
GATT has been assured by United States representatives in Geneva
that the United States will end any restrictions under section 22 of
the Agricultural Adjustment Act when it is found that "circumstances
requiring the action no longer exist." GATT has further been as-
sured that restrictions will be modified "whenever changed circum-
stances warrant such modification."
59-00224A000100310005-6
 310005-6
Approved For Release : CIA-RDP59-00224A0001O 27
TRADE AGREEMENTS EXTENSION ACT OF 1955
Before H. R. 1 is brought to the floor of the Senate the State
Department should be subject to an inquiry on the following points:
1. Who is to determine if and when the safeguards under section 22
of the Agricultural Adjustment Act are no longer needed?
2. Who is to weigh the circumstances requiring or not requiring
action with respect to quotas on imports of agricultural commodities?
3. Who is presumed to exercise the authority to modify restrictions
embodied in legislation passed by the Congress and affecting agricul-
ture, and who is to determine when "changing circumstances warrant
such modification"?
H. R. 1, by assuring continuance in GATT, opens the door to inter-
national meddling and obstructive tactics in other legislation passed
by the. Congress, namely. the Agricultural Adjustment Act.
Nowhere in the Agricultural Adjustment Act is there provision for
scrutiny or "review" of an agricultural program "upon request of any
contracting party" to the General Agreement on Tariffs and Trade,
meeting in Geneva, Switzerland.
Nowhere does the Agricultural Adjustment Act provide for notifica-
tions of foreign countries when investigations are made at the request
of a foreign nation or nations "to determine whether any existing
import restriction should be modified, terminated, or extended." The
modification, termination, or extension of quota provisions in section
22 are legislative matters for congressional determination.
Nowhere does the Agricultural Adjustment Act provide for "repre-
sentations and consultation" with foreign nations which consider
their interests prejudiced by administration of the Agricultural.
Adjustment Act.
Nowhere does the Agricultural Adjustment Act set up a criteria
such as prescribed in paragraph 3 of the GATT "Decision" taking
into account the estimated volume of imports, were import restrictions
not applied, and the effects on domestic production that unlimited
imports might have.
And nowhere does the Agricultural Adjustment Act provide that
"as soon as the President has made his decision following any investi-
gation the United States will notify the contracting parties and those
contracting parties which have made representations or entered into
consultations," plus explaining the reasons if restrictions are continued.
The authority to make the commitments made by the State Depart-
ment to GATT is not embodied in the Agricultural Adjustment Act,
section 22. The authority to make the commitments it has made is
assumed by the State Department to grow out of the Trade Agree-
ments Act, which H. R. 1 would extend to June 12, 1958.
The 1934 Trade Agreements Act has therefore superimposed an
international coalition of 34 nations, including Communist Czecho-
slovakia, over not only agriculture and industry in the United States,
but also over the powers and responsibilities of the Congress, as pro-
vided in article I, section 8, of the Constitution.
GATT falls or survives, insofar as American participation is con-
cerned, depending on whether H. R. 1 is approved or rejected.
If H. R. 1 is approved GATT continues to meddle in our domestic
economy and, by implication at least, in our legislative processes.
If H. R. 1 is rejected, the United States will be free of GATT stric-
tures, control, and interference.
Approved For Release : CIA-RDP59-00224A000100310005-6
 Approved For Release : CIA-RDP59-00224A000100310005-6
TRADE AGREEMENTS EXTENSION ACT OF 1955
GATT .has never been submitted to the Congress for resection or
approval, and the substantive provisions of GATT never are to be
submitted according to the present thinking of the State Department.
But GATT is inextricably bound to H. R. 1 which would continue
the Trade Agreements Act, the only substance on which any authority
of GATT over the Nation's trade, tariffs, and economy is based.
Because the shadow of GATT hangs over H. R. 1, and is a dominant
motivation for continuance of the 1934 trade agreements program, it
is important in the consideration of H. R. 1 to discuss its origins and
background.
GATT sessions are secret. They are held invariably on foreign
soil. Information concerning actions and deliberation is scanty and
released only through official sources. The author of these views is
in possession of a document listing 24 decisions and resolutions, 3
declarations and 1 recommendation by GATT between February
1954 and March 10, 1955, involving the United States and 1.6 other
countries including Czechoslovakia.
The document is marked "Restricted," and a note attached reads
as follows :
Although it is not definitive as yet, it is expected that this document may be
derestricted as of May 1, 1955.
No information bearing on the national security of any nation is
contained, and at least one decision has been made public by the
State Department. The "restricted" document deals only with
trade, finance matters, and investment, actions which should be public
knowledge to the workers and investors of America.
In the opinion of the author of these minority views the only pur-
pose of the restriction is to conceal information from the public and
possibly from the legislative bodies of the various nations until such
time as GATT deems it appropriate to inform them.
GATT and the 1934 trade agreements program have been welded
together since 1947. The Trade Agreements Act was passed in 1934.
The Trade Agreements Act delegated to the President power to enter
nto trade pacts with foreign nations, the type of agreements contem-
plated being bilateral. Prior to entry into GATT by Presidential
proclamation on December 16, 1947, bilateral. trade treaties had been
negotiated with 29 foreign countries, of which 27 treaties were still
active.
GATT, however, had been in contemplation for several years. As
early as December 22, 1941, an Advisory Committee on Postwar
Foreign Policy was set up, with subcommittees on "economic policy"
and "economic reconstruction." This was replaced on .April 9, 1943,
by a "Committee on Postwar Foreign Economic Policy."
This committee set up special committees to consider various
phases of postwar foreign economic policy. Dean Acheson, then
Assistant Secretary of State was given "general supervision" of
"Shipping, relaxation of trade barriers, commodity agreements and
methods of trade, private monopolies and cartels, food and agricultural
products, metals and heavy industries, petroleum, and rubber."
On. November 23, 1944, Mr. Acheson announced the Department's
intention "to seek an early understanding with the leading, tradin
nations, indeed as many nations as possible,, for the effective and
59-00224A000100310005-6
 ApprovedAtQrA5 ftk s 5A~~ q? j&0001 002 1 0005-6
substantial reduction of all kinds of barriers to trade," adding that
"a trade conference of the United and Associated Nations should be
held at the earliest practicable date for the negotiation of an agreement
for the reduction of all kinds of barriers to trade."
"This agreement," he continued, "would of course be submitted to
the Congress for its consideration," an assurance that has never been
borne out since the evolvement of the General Agreement on :Tariffs
and Trade, or GATT.
Among those serving on the Special Committee on Relaxation of
Trade Barriers was Harry Dexter White. Alger Hiss served on the
Special Committee on Petroleum.
Earlier, on April 5, 194, President Roosevelt created an Executive
Committee on Economic Foreign Policy, with Acheson, White, and
Lauchlin Currie of the Executive Office of the President as initial
members.
An additional committee established in this period was an Inter-
divisional Committee on Problems of Overall Economic Organization,
with Mr. Charles P. Taft, then Director of the Office of Wartime
Economic Matters, State Department, as Chairman. The Com-
mittee served during the spring of 1944 within the Department's
preparatory function, and was specifically concerned with the possible
establishment of "the international commission of technical experts
in the economic field," to quote the State Department.
It was also concerned-
the State Department adds-
with the formulation of proposals for permanent economic organization to ac-
company those being developed in the political field for the maintenance of peace
and security.
However, it was the executive committee created April 5, 1944,
which submitted the document "Proposals for the Expansion of
World Trade and Employment" which was the forerunner of GATT.
Harry Dexter White, V. Frank Coe, and Harold Glasser were among
those who participated in preparation of this document, representing
the Treasury Department.
"Proposals" called for setting up ITO. On December 15, 1945,
the executive branch announced that it was following up the document
by inviting 15 other countries, including the Soviet Union and Czecho-
slovakia, to prepare projects for consideration at an international con-
ference on trade and employment.
In February 1946, the Economic and Social Council of the United
Nations, on motion of the United States, undertook to sponsor such
a conference, setting up a preparatory committee to arrange for a
conference to be held in London in October 1946. V. Frank Coe,
Harold Glasser, and Victor Perlo of the Treasury Department were
members of this preparatory committee.
The preparatory committee recommended procedures for carrying
through the negotiations in such a way as to give effect, according
to Tariff Commission Report 160, "to certain provisions of the charter
of the International Trade Organization by means of a General Agree-
ment on Tariffs and Trade."
Tariff negotiations were conducted at Geneva from April to October
1947, as part of the second session of the. preparatory committee for
a United Nations Conference on Trade and Employment. GATT
Approved For Release : CIA-RDP59-00224A000100310005-6
 provegJF$,r AftIgase SCIA RDP59 00o224A000100310005-6
was born at this Geneva session, and included many provisions identi-
cal with those of a Geneva draft of a proposed charter for an Inter-
national Trade Organization.
Representatives of 56 nations met in Habana, Cuba, in the late
fall of 1947 and early spring of 1948, there drafting a Habana charter
for an International Trade Organization. The first formal session
of Q ITT was held at Habana at the conclusion of the ITO sessions,
but meanwhile, on December 16, 1947, President Truman proclaimed
that GATT' would be placed in effect by the United States as of
January 1, 1948. Other nations entering GATT at that time were
Belgium, Canada, Cuba, France, Luxembourg, the Netherlands, and
the United Kingdom.
ITO was submitted to the Congress in 1949 but was not reported
out by committees of either the House or Senate. GATT has not
been submitted to the Congress. GATT, however, included provi-
sions identical with or similar to provisions in the ITO Charter.
Similarity or duplication between ITO and GATT provisions is
spelled out in hearings before the Senate Finance Committee held
February 17 through 23, 1949.
Thus GATT survives although its twin, ITO, was still-born, and
it survives because the State Department preferred to withhold it
from Congress after ITO was scuttled, basing their participation in
GATT on the Trade Agreements Act. Even at this late date, the
State Department declines to lay the substantive provisions of
GATT before the Congress.
The State Department has agreed, however, to submit to the
Congress a new international trade organization to be called the
Organization for Trade Cooperation. OTC contains clauses and
language similar to provisions and language in the ITO Charter,
which the Congress declined to approve. OTC also is prefaced. with
what it refers to as "objectives" which to all intents and purposes
duplicate the "objectives" of the Habana charter for ITO. The
purported purpose of OTC is to supervise GATT.
Rejection of H. R. 1 will end the controversy over GATT. It
will also end the authority under which the executive branch presumes
to participate in GATT. Withdrawal from GATT is essential to the
restoration of our commercial and economic independence.
GATT's powers over the Nation's trade and economy, which H. R. 1
would continue, are being challeneged at the present time in the United
States courts as unconstitutional.
The Glassware Guild, Inc., of Morgantown, W. Va., which has been
seriously injured by imports of glassware from foreign countries, in-
cluding several Communist countries behind the Iron Curtain, is
plaintiff in the suit.
The complaint contends that GATT and GATT-prescribed tariff
rates and duties are "illegal, unlawful, and of no effect," and are
"violative of the supreme taxing authority of Congress, the treaty-
making powers of Congress, and the Foreign-commerce regulating au-
thority of Congress."
Plaintiff further alleges that GATT is an "unconstitutional and un-
lawful attempt by the President to exercise power and authority not
59-00224A000100310005-6
 ApprovedA orA es:OAAR PSM0224A000100310005-6
delegated to him in the Federal Constitution for the purpose of limit-
ing certain powers delegated exclusively to Congress and transferring
said powers to an. international administrative agency neither recog-
nized by the Congress nor approved by the people's elected representa-
tives."
The suit is now pending before the Federal courts, and a decision on
it when made will have far-reaching importance on industries through-
out the United States subject to foreign competition or facing the threat
of foreign competition.
Congress should withhold action on H. R. 1 until the Supreme
Court has rendered an ultimate decision in this case.
Constitutionality of the 1934 Trade Agreements Act likewise is
challenged in this suit, and for the first time since the Trade Agree-
ments Act was enacted.
However, constitutionality of the act has been seriously questioned
since its inception.
In the 73d Congress, 10 of the 23 members of the Ways and Means
Committee termed the trade agreements bill "unconstitutional" and
"un-American." Their reasons for this view are set forth in House
Report No. 1000 of the 73d Congress. However the act was passed,
proponents arguing that it was an emergency measure of temporary
duration.
The minority contended that the bill "delegates to the President's
discretionary legislative power in tariffmaking and thereby provides
for an unconstitutional delegation of the supreme taxing power of
Congress contrary to * * * fundamental provisions of the Con-
stitution."
It cited article I, section 1, of the Constitution providing that all
legislative powers therein granted shall be vested in the Congress;
section 8 providing that Congress shall have power to "lay and collect
taxes, duties, imposts, and excises," and to "regulate commerce with
foreign nations," and article 11, lodging the executive power of the
Government in the President, and the judicial power in the Supreme
Court.
The minority report also stated correctly that the Supreme Court
has many times held that, under this division of powers, it is a breach
of the Constitution for Congress to delegate its legislative powers to
the Executive. It also pointed out that the 1934 trade agreements
bill constituted an unprecedented delegation of authority, and cited
numerous Supreme Court decisions to prove it unprecedented.
Subsequent to enactment of the Trade Agreements Act the Supreme
Court also held delegation by Congress of legislative powers to the
executive branch to be unconstitutional in several notable decisions,
among them that in Panama Refining Co. v. Ryan (293 U. S. 388, 421),
and Schechter Poultry Corp. v. U. S., the famous NIRA or Blue Eagle
case (295 U. S. 495, 529).
The Supreme Court ruled that "the Congress manifestly is not
permitted to abdicate, or to transfer to others, the essential legislative
functions with which it is thus vested."
The Congress may authorize administrative officers, or the Presi-
dent, to fill in the details of legislation, but in so doing the Congress
must fix a primary standard to guide the administrative officers in
carrying out the details of a law.
Approved For Release : CIA-RDP59-00224A000100310005-6
 Approved For Release : CIA-RDP59-00224A000100310005-6
TRADE AGREEMENTS EXTENSION ACT OF 1955
The limit to which Congress may go in delegating legislative making
powers to the executive is set out in Schechter Poultry Corp. v. U. S.:
Congress cannot delegate legislative power to the President to exercise an un-
fettered discretion.
Possibly the latest expression on this constitutional question comes
from Chief Judge John J. Parker, of the Fourth United States Circuit
Court of Appeals who said in the case of U. S. v. Guy W. Capps, Inc.,
decided April 15, 1953, in that court:
* * * while the President has certain inherent powers under the Constitution
such as the power pertaining to his position as Commander in Chief of the Army
and Navy and the power necessary to see that the laws are faithfully executed,
the power to regulate interstate and foreign commerce is not among the powers
i,icident to the Presidential office, but is expressly vested by the Constitution in
the Congress.
Further in his decision Judge Parker cited the Supreme Court deci-
sion in the steel seizure case of Youngstown Sheet cfn Tube Co. v. Sawyer,
in which the Court stated:
In the framework of our Constitution, the President's power to see that the
laws are faithfully executed refutes the idea that he is to he a lawmaker. The
Constitution limits his functions in the lawmaking process to the recommending
of laws lie thinks wise and the vetoing of laws he thinks bad. The first section
of the first article says that "all legislative powers herein granted shall be vested
in a Congress of the United States."
Further in his decision, Judge Parker said:
Imports from a foreign country are foreign commerce subject to regulation, so
far as this country is concerned, by Congress alone.
Today GATT regulates our foreign commerce, and H. R. 1. would
underwrite GATT's operations for 3 more years. The question then,
is whether the Trade Agreements Act of 1934, and H. R. 1 violate
the Constitution.
The Trade Agreements Act of 1934 attempts to delegate to the
President, to exercise in his absolute discretion, all. of the legislative
authority possessed by Congress in article I, section 8, of the Con-
stitution. The only limitation on this total delegation in the original
act is a provision that existing duties might not be varied more than
50 percent, and the only limitations in H. R. 1 are percentage
limitations.
As stated earlier in these minority views, the authority which the
Congress attempted to delegate in the Trade Agreements Act, has
been to all effects redelegated to the State Department, which in turn
had redelegated much of it to GATT, an international. organization
in no way regulated by or answerable to the Congress.
'T'here is no thought or wish on the part of the signer of these
individual views of attempting to prejudge the decision of the Federal
courts or the Supreme Court in this important litigation.. Nor
should there be a wish or attempt by the majority of the Senate
Finance Committee or of the Senate to in effect prejudge: the decision
by action on H. R. 1 prior to a determination by the Supreme Court
of the constitutionality of the 1934 Trade Agreements Act, and on
the constitutionality of executive branch acceptance of rules and rates
laid down by GATT.
The question of constitutionality certainly should be resolved before
any action is taken on this legislation in the United States Senate.
59-00224A000100310005-6
 Approved For Release : CIA-RDP59-00224A00010Q0005-6
TRADE AGREEMENTS EXTENSION ACT OF 1955 311
THE FICTION OF "RECIPROCAL TRADE"
H. R. 1 would extend a trade program that is not "reciprocal,"
never has been reciprocal, and never was intended to be reciprocal.
No reciprocity has ever been achieved, either through the bilateral
trade-agreements program of 1934 to 1947, or the multilateral pro-
gram since 1947 under GATT. There is no reciprocity in GATT and
none is intended.
Testimony was presented to the Senate Finance Committee during
hearings on H. R. 1 that the following countries have recently increased
tariff rates:
Australia, Belgium, Bolivia, Brazil, Ceylon, Costa Rica, Cuba,
Denmark, Dominican Republic, Egypt, Ecuador, Finland, France,
Guatemala, Haiti, India, Ireland, Israel, Italy, Jordan, Lebanon,
Mexico, New Zealand, Norway, Peru, Sweden, Syria, Thailand,
.Union of South Africa, United Kingdom, Uruguay, and West
Germany.
The United States has trade agreements with Australia, Belgium,
Brazil, Ceylon, Cuba, Denmark, Dominican Republic, Finland,
France, Haiti, India, Italy, New Zealand, Norway, Peru, Sweden,
Union of South Africa, Guatemala, United Kingdom, and Uruguay,
and all of them except Guatemala are covered by trade agreements
made through GATT.
In contrast to tariff increases made by these nations the United
States has decreased tariff rates 68 percent since 1937, and more, than
55 percent of our imported commodities enter free from any duties
at all.
This fact was confirmed by the Committee for Economic Develop-
ment in November of last year. In a United States tariff policy
statement the committee said:
Only a part of our imports are subject to tariffs or import restrictions.
Of the total annual imports of approximately $10.8 billion in 1951, some $6
billion consisted of products which enter free of duty or quota restrictions.
The rest-some $4.8 billion annually-were subject to tariff duty or import
quotas.
This $4.8 billion included some $2.5 of finished or semifinished manufactures,
$1.8 billion of them agricultural products, and $500 million of metals and minerals.
Of this $4.8 billion of imports, however, only about $3 billion were subject to
import quotas or to tariffs sufficiently high to have an appreciable effect on the
volume of imports. This $3 billion consisted for the most part of agricultural
products and finished manufactures.
Tariffs in nearly every trading nation of the world are higher than
those in the United States. Examples of foreign tariff rates include:
Cotton manufactures: United Kingdom, 1.5 to 30 percent; Germany,
up to 30 percent; Italy, 15 to 25 percent; Indonesia, 18 to 30 percent;
Canada, 15 to 27% percent.
Synthetic textiles: France, 20 to 35 percent; Italy, 25 percent;
Norway, 22 percent; Belgium, 24 percent, and India, 50 percent.
Grains: France, 15 to 30 percent; Germany, 15 to 20 percent; Italy,
25 to 30 percent; Sweden, 10 to 15 percent.
Machinery: Britain, 10 to 25 percent, when it can be imported at
all, and which, as will be presently shown, is rarely permitted to be
imported and is subject to other types of restrictive barriers; France,
up to 30 percent; Italy, 5 to 40 percent; and Japan, 15 to 30 percent.
Automobiles: India, 63 percent; United Kingdom, 33'/3 percent;
Japan, 30 to 40 percent; France, 15 to 30 percent.
Approved For Release : CIA-RDP59-00224A000100310005-6
 Approved For Release : CIA-RDP59-00224A000100310005-6
;34 TRADE AGREEMENTS EXTENSION ACT OF 1955
P In addition to tariffs most of the trading countries impose restric-
tions and controls by which they limit or ban the import of United
States goods into their markets.
These barriers include manipulated currencies and currency shutoffs,
import licenses, quotas and cartels, empire preference curbs, and
exchange permits.
The United Kingdom, principal beneficiary of American aid, and ti
major beneficiary of United States trade concessions, bars many
American-made products from its markets entirely and imposes rigid
restrictions on all others except a few raw materials and foodstuffs.
The British rule in general is that no American manufactures, such
as machinery, may be imported into England if such products are
being made at all in the United Kingdom. Import licenses are denied.
for all such imports except "token" shipments on a very few coni-
anodities.
Britain grants preferential tariff rates, mainly free, to products of
the British Commonwealth shipped or consigned directly to the
United Kingdom, but these preferential rates in no case apply to
products of the United States. American products pay the highest
rate, or are banned entirely.
Import duties are payable in British currency, and the rate of
exchange for the conversion of foreign values is the current selling
rate in the United Kingdom. By devaluating the pound, as it has
done in the past, Britain can automatically raise its barriers to United
States trade.
As of February 14, 1953, the Department of Commerce advised;
with respect to British trade barriers and restrictions:
1. Licensing and exchange controls are maintained on. about half
of dollar imports, while over 80 percent of trade with European
countries is free from any restriction. Quotas are set for some key
dollar products.
2. Licenses covering dollar products are usually granted only for
goods considered essential to the domestic (i. e., British) economy, and
which are not alternatively obtainable from domestic or soft currency
sources.
3. The British Government announced in late June 1.954 that it
would give "more favorable" consideration from then on to applica-
tions for licenses to import dollar machinery provided the machinery
in question would reduce cost, and provided no nondolla.r alternatives
were available.
In other words, if Britain could get machinery from any other
country than the United States, import licenses would be denied for
the importation of machinery from this dollar country.
Britain has sold millions of dollars worth of machinery to the
-United States for use in Government projects in America, paid for
by the American taxpayers. Similar American products are barred
from England.
"Britain industrial output index reaches highest point on record,"
the United States Department of Commerce reported on January 3,
1955. "Unemployment amounted to only 1 percent of the labor
force," it adds.
59-00224A000100310005-6
 Approved For ARelease : CIA RDP59 00224A00010033510005-6
England has achieved this record not through reciprocal trade but
through protection, high tariffs, curbs on imports of American prod-
ucts, manipulation of exchanges, and gift dollars and contracts from
the United States paid for by American taxpayers.
H. R. 1 would further benefit the United Kingdom by reducing
tariffs on her products at further cost to American taxpayers, working-
men, and investors.
As a gesture toward the United States, possibly in its bid for reduced
tariffs here and extension of the trade agreements program, Great
Britain did, some months ago, agree to admit 650 American-made
automobiles "on trial," the imports subject, of course, to British duties
and taxes bringing the price of an American Chevrolet to approxi-
mately $6,000.
This was obviously a propaganda gesture. Britain, during 1954,
exported 25,889 now cars valued at $34,147,665 to the United States,
and used cars and parts totaling another $2.5 million in value. The
tariff rate on automobiles imported into the United States from
Britain is 10 percent. The British rate, excluding taxes and other
charges, on cars imported from the United States is 33% percent.
On cars imported from British Commonwealth countries it is 22%
percent.
British leaders, such as R. A. Butler, Chancellor of the Exchequer,
have been ardent proponents of reduced tariff barriers for the United
States, while raising prohibitive trade barriers against American
products reaching the British Isles.
The British are not alone. Of the 33 foreign nations in GATT, 26
impose barriers on imports from the United States by requiring
import licenses to be obtained by prospective importers of American
goods. As the Department of Commerce puts it:
These regulations (import licenses and exchange permits) apply primarily to
goods of United States origin and to other goods payable in United States dollars.
GATT members employing these barriers against United. States
trade after 22 years of concessions by the United States are-
Australia, Austria, Belgium, Brazil, Ceylon, Chile, Czechoslovakia,
Denmark, Finland, France, Federal Government of Germany, India,
Indonesia, Italy, Luxembourg, Netherlands, New Zealand, Nicaragua,
Norway, Pakistan, Rhodesia and Nyasaland, Turkey, Union of South
Africa, United Kingdom, and Uruguay.
Exchange permits also are required in many of these countries,
either as separate documents or combined with the import license.
Countries not members of GATT which require import licenses or
exchange permits, or both, on imports from the United States, after
22 years of trade concessions made to them under the trade agreements
program which H. R. 1 would extend, are--
Anglo-Egyptian Sudan; Aden, Bahrein, Qatar, and Trucial Oman
on the Arabian Peninsula; Argentina, the Belgian Congo, Bolivia,
British Colonies, Bulgaria, Cambodia, Colombia, Costa Rica,
Ecuador, Egypt, Ethiopia, French overseas territories, East Germany,
Hashemite Jordan, Hong Kong, Hungary, Iceland, Iran, Iraq,
Ireland, Israel, Japan, Korea, Laos, Lebanon, Federation of Malaya,
Mexico, Morocco, (French zone) and Morocco (Spanish zone),
Netherlands West Indies, Paraguay, Poland, Portugal, Portugese
colonies, Rumania, Singapore, Spain, Spanish colonies, Surinam,
Switzerland, Syria, Formosa, Thailand, U. S. S. R., and Vietnam.
Approved For Release : CIA-RDP59-00224A000100310005-6
 Approved For Release : CIA-RDP59-00224A000100310005-6
36 TRADE AGREEMENTS EXTENSION ACT OF 1955
Countries which have neither import licenses nor exchange permits,
or in which such restrictive devices and controls apply only to some
commodities, are Saudi Arabia, Kuwait, Muscat, Oman, and Yemen
on the Arabian peninsula, Canada (except for a few commodities);
Cuba (excepting wheat, flour, rice, tires and tubes, red and pink
beans, potatoes, condensed milk and butter); El Salvador, French
Somaliland, Greece (excepting luxury items); Guatemala,, Haiti,
Honduras, Liberia, Panama (excepting commodities under quotas);
Tangier, Peru, the Philippines, Sweden (except automobiles,, coal,
and certain agricultural products); Venezuela (except approximately
25 tariff or quota items), and Yugoslavia, which licenses firms to
carry on its import business instead.
Taus it is obvious that most of the trading nations of the world,
whether or not they are members of GATT, have erected barriers
against products of the United States, and have erected thern since
the 1934 Trade Agreements Act, which H. R. 1 would continue, came
into operation.
While America has reduced tariffs to low and ineffectual levels,
other nations have imposed devices with which they can and do shut
out .American products entirely.
Their program appears: Free trade for the United States; protection
for the rest of the world, excepting such remote and impoverished
areas as Yemen, French Somaliland., and Tangier.
T:he Trade Agreements Act, by the record, has not expanded
America's exports markets. The markets have, in fact, been reduced
during the 22 years the act has been on our statute books.
The Trade Agreements Act has not achieved concessions to balance
the :increasing restrictions and bans placed by foreign nations.
The Trade Agreements Act is in no way reciprocal.
It is an act to increase imports of foreign. products from low-wage,
low-living standard nations, not one of which pays wages one-third
as high as those in the United States, and some of which pay wages
one-ninth of ours.
II. R. 1 will extend the Trade Agreements Act, and for that reason,
it, too, is a bill to increase imports at the expense of the American
workingman, investor, and taxpayer.
GATT, which H. R. 1 would continue regardless of whether it ever
comes before the Congress, is not reciprocal. It is discriminatory
against the United States and any other country which may achieve
a favorable balance of payments in its foreign trade.
GATT imposes high-sounding rules to apply to prospering nations;
nullifies them with respect to any and all nations which presently are.
not enjoying equal prosperity.
GATT proposes under article XI that no restrictions other "than
duties, taxes, or other charges, whether made effective through quotas,
import or export licenses or other measures, shall be instituted or
maintained by any contracting party on the importation of any product
of the territory."
Article XII, however, grants exceptions to this rule to any GATT
member which wishes to "safeguard its external financial position
and balance of payments." Such countries may "restrict the quantity
or value of merchandise permitted to be imported."
As the State Department puts it: "Notwithstanding the general
rule against the use of import restrictions in article X.I, this article
59-00224A000100310005-6
 Approvefk&,rA1Weas A GJR 5OQ22 Q00100V 0005-6
permits a contracting party to impose import restrictions to safeguard
its external financial position and balance of payments; that is, to
forestall the imminent threat of a serious decline in its monetary
reserves, or, if the country has very low reserves, to achieve a rea-
sonable rate of increase in its reserves."
Article XIV and article XX contain other exceptions.
In other words, GATT imposes rules on the United States and
what few other GATT members may enjoy a favorable balance of
payments, but lifts them on any members who can, through manipula-
tion of exchanges or otherwise, claim an unfavorable balance of pay-
ments, or even profess a threat to a decline in their monetary reserves.
Such countries may also continue, or apply, discriminatory restric-
tions when they affect only "a small part of a country's trade and the
benefits derived by the country substantially outweigh any injury to
another country"; when they are to assist a country "whose economy
has been disrupted by war"; when they are applied by countries
having. a common quota in the International Monetary Fund;
when they are equivalent to restrictions authorized by the "scarce
currency" provisions of the fund agreement; and when they are ap-
plied "under specific preferential arrangements existing in the United
Kingdom."
Every member of GATT except the United States and possibly
Canada thus have an "out" to continue restrictions, controls, and
preferential arrangements, and as listed earlier in this report most of
the GATT members are applying them.
The United States, enjoying a high standard of living and maintain-
ing high production levels, is the victim of GATT's rules, and will
continue to be the victim until our economy is reduced to a "scant
currency" and adverse payments balance basis, so long as the Trade
Agreements Act remains in force.
H. R. 1 in extending the Trade Agreements Act for 3 more years
will extend the life of GATT for 3 more years. Rejection of H. R. 1
will mean the death of GATT, and the end of this international con-
trol over the Nation's economy and international restrictions against
America's export trade.
Rejection of H. R. 1 by the Congress will remove control over our
foreign commerce, duties, and tariffs from an international aggregation
of 33 foreign nations and the United States which meets in foreign
lands, and in which the foreign nations have rigged the rules to our
disadvantage.
Rejection of H. R. 1 will restore the regulation of tariffs and the
foreign commerce to the Congress, as provided by the Constitution,
article I, section 8.
Rejection of H. R. 1 will liberate the Nation from GATT and restore
our national economic independence.
H. R. 1 will help the foreign producer and work injury on the
American producer here at home.
The foreign producer, as William McKinley told the 50th Congress,
"has no right or claim to equality with our own. He is not amenable
to our laws. He performs no civil duties--he is subject to no demands
for military service. He is exempt from State, county, and municipal
Approved For Release : CIA-RDP59-00224A000100310005-6
 Approve F r 19#sp CIAA-RDP59 00224A000100310005-6
obligations. He contributes nothing to the support, the progress
and the glory of the Nation."
GATT grants the foreign producer not equality, but superiority
over his American competitor.
H. R. 1 will enable GATT to continue that discrimination, and will
continue the subservience of our National Government to an inter-
national authority sitting in Geneva, in which no American producer
has it voice, and over which the Congress has no vestige of control.
For the above reasons; for the reason that my home State of Nevada
and the States of California, Utah, and Idaho have passed resolutions
opposing H. R. 1, and for the reasons advanced by the many industry
and labor organizations,, spokesmen. and leaders who have testified
before the Senate Finance Committee or have written or telegraphed
me in opposition to H. R. 1, I oppose H. R. 1 and any extension. of the
1934 Trade Agreements Act.
I do so with the full conviction that the continuation of the act by
H. R. 1 is adverse to the interests of the United States, its industries,
and its people.
0
59-00224A000100310005-6