PAGENO="0001"
TARIFF AND TRADE PROPOSALS
-~ ~ ~7
2 ~ ~
HEARINGS
BEFORE THE
COMMITTEE ON WAYS AND MEANS
HOUSE OF REPRESENTATIVES
NINETY-FIRST CONGRESS
SECOND SESSION
ON
TARIFF AND TRADE PROPOSALS
MAY 11, 12, 13, 14, 18, 19, 20, 21, 22,
JUNE 1, 2, 3, 4, 5, 8, 9, 10, 11, 12, 15,
16, 17, AND 25, 1970
Part 13 of 16 Parts
(June 11, 1970)
Printed for the use of the Committee on Ways and Means
`~ /) c:T) k `~
~ ~(i(~ /
U.S. GOVERNMENT PRINTING OFFICE
46-127 0 WASHINGTON: 1970
For sale by the Superintendent of Documents, U.S. Government Printing Office
Washington, D.C. 20402 - Price $1
PAGENO="0002"
COMMITTEE ON WAYS AND MEANS
WILBUR D. MILLS, Arkansas, Chairman
HALE BOGGS, Louisiana
JOHN C. WATTS, Kentucky
AL ULLMAN, Oregon
JAMES A. BURKE, Massachusetts
MARTHA W. GRIFFITHS, Michigan
DAN ROSTENKOWSKI, Illinois
PHIL M. LANDRUM, Georgia
CHARLES A. VANIK, Ohio
RICHARD H. FULTON, Tennessee
JACOB H. GILBERT, New York
OMAR BURLESON, Texas
JAMES C. CORMAN, California
WILLIAM J. GREEN, Pennsylvania
SAM M. GIBBONS, Florida
JOHN W. BYRNES, Wisconsin
JACKSON B BETTS, Ohio
HERMAN T. SCHNEEBELI, Pennsylvania
HAROLD R. COLLIER, Illinois
JOEL T. BROYHILL, Virginia
BARBER B. CONABLE, JR., New York
GEORGE BUSH, Texas
ROGERS C. B~ MORTON, Maryland
CHARLES E. CHAMBERLAIN, Michigan
JERRY L. PETTIS, California
(II)
JOHN M. MARTIN, Jr., Chief Counsel
J. P. BAKER, Assistant Chief Counsel
RICHARD C.. WILBUR, Minority Counsel
PAGENO="0003"
TABLE SHOWING CONTENTS OF THESE HEARINGS BY DATES,
SUBJECTS, VOLUME NUMBERS, AND PAGE NUMBERS
Date
Subject Volume
I number
Pages
1970
May 11
May 12
May la
May 14
May 18
May 19
May 20
May 21
May 22
June 1
June 2
June 3
June 4
June 5
June 8
June 9
June 10
June 11
June 12
June 15
June 16
June 17
June 25
Government officials
do
do
do
General testimony
do
Textiles and apparels
do
General testimony
Iron, steel, brass, copper, and related products_
Footwear (leather and rubber) and related
products.
Oil, gas, and coal
DISC, oil, refund of duties on exported ar-
ticles; machinery and machine tools.
State agencies, scissors afid shears, toys and
novelties, umbrellas, flowers, alcoholic
beverages, glue, candles, sporting arms,
tobacco, general testimony.
Electronics, heavy electrical equipment, item
807.
General testimony, fur, item 807, hardwood -
Chemicals, ASP
Textiles, meat, bearings and àhains, industrial
fasteners, aluminum and other metals, gen-
eral testimony.
Aircraft, bicycles, pins and fasteners, mush-
rooms, seafoods, coffee.
Stone, glass, clay, ceramic tile, cement,
marble, granite.
Farm products, milk and milk products, soy-
beans, honey, molasses, cand~r, footwear,
textiles, apparel, general testimony.
Farm and citrus products, footwear, textiles,
apparel, tea, general testimony.
Government officials
1
2
2
3
3
4
5
5
6
6
7
8
9
10
10
11
12
13
14
14
15
15
16
1-297
299-556
557-643
645-737
739-1000
1001-1210
1211-1500
1501-1615
1617-1748
1749-1959
196 1-2177
2179-2395
2397-2651
2653-2825
2827-3049
3051-3344
3345-3640
3641-3833
3835-3969
3971-4155
4157-4274
4275-4416
4417-4651
(III)
PAGENO="0004"
PAGENO="0005"
CONTENTS
SUBJECT HEADINGS
Aircraft
Alcoholic beverages
Aluminum
American selling price
Bearings and chains
Bicycles
Brass
Candles
Candy
Cement
Ceramic tile
Chemicals
Clay
Coal
Coffee
Copper
Domestic International Sales Corp
Electrical equipment
Electronics
Exported articles, refund of duties
Farm products
Fish
Flowers
Footwear (leather and rubber) and related products_
Fur
Gas
General testimony
June 12.
June 5.
June 11.
June 10.
June 11.
June 12.
June 1.
June 5.
June 16.
June 15.
June 15.
June 10.
June 15.
June 3.
June 12.
June 1.
June 4.
June 8.
June 8.
June 4.
June 12, 16, 17.
June 12.
June 5.
June 2, 16, 17.
June 9.
June 3.
May 18, 19,
11, 16, 17.
Glass June 15.
Glue June 5.
Government offiëials May 11, 12,
Granite June 15.
Hardwood June 9.
Honey June 16.
Industrial fasteners June 11.
Iron June 1.
Item 807 June 8, 9.
Machinery and machine tools June 4.
Marble June 15.
Meat June 11.
Milk and milk products June 16.
Molasses June 16.
Novrities June 5.
Oil June 3, 4.
Pins and fasteners Jui~e 12.
Scissors and shears June 5.
Soybean June 16.
Sporting arms - June 5.
State agencies - June 5.
Steel June 1.
Stone - June 15.
Tea June 17.
Textiles and apparels May 20, June 11, 16, 17.
Tobacco June 5.
Toys June 5.
Umbrellas June 5.
Zinc - June 15.
(V)
Date
22, June 5, 9,
13, 14, June 25.
PAGENO="0006"
VI
BACKGROUND MATERIAL
Page
Letter frbm the President to Chairman Mills, dated May 11, 1970 65
Press releases:
Dated Thursday, April 16, 1970, outlining future schedule of the Com-
mittee on Ways and Means 1
Dated Monday, May 4, 1970, announcing public hearings on tariff and
trade proposals 2
Proposed Trade Act of 1969, committee print 5
Draft bill (H~R. 14870, introduced by Chairman Mills and Congressman
John W. Byrnes of Wisconsin on November 19, 1969, at the request
of the administration) 15
Message of the President 8
Section-by-section analysis - 20
Trade Expansion Act of 1962, as amended 30
ORAL STATEMENTS BY GOVERNMENT OFFICIALS
Agriculture, Department of: Hardin, Hon. Clifford M., Secretary 626
Commerce, Department of:
Stans, Hon. Maurice H., Secretary 299,4417
Abbuilil, Forrest, Director, Trade and Commercial Policy Division_ 299,4417
Bodner, Seth, Special Assistant to Deputy Assistant Secretary for
Itesources 299,4417
Butler, Michael F., Assistant General Counsel, Domestic and Interna-
tion Business ~ 4417
Fox, Lawrence, Deputy Assistant Secretary for International Trade
Policy
Johnson, Chadwick, Japan Desk Officer 4417
Nehmer, Stanley, Deputy Assistant Secretary for Resources 482,4417
Labor, Department of:
Shultz, Hon. George P., Secretary 589
Blackman, Herbert N., Deputy Assistant Secretary for Trade and
Adjustment Policy 589
Hildebrand, Hon. George H., Deputy Under Secretary 589
State, Department of:
Rogers, Hon. William P., Secretary 557
Trezise, Philip H., Assistant Secretary for Economic Affairs 570
Treasury, Department of:
Kennedy, Hon. David M., Secretary 499
Nolan, John, Acting Assistant Secretary for Tax Policy 499
Patrick, Robert J., Associate Tax Legislative Counsel (International) 499
Petty, John R., Assistant Secretary for International Affairs 532
Rossides, Eugene T., Assistant Secretary for Enforcement and Opera-
tions 521
`\Tolcker, Paul A., Under Secretary for Monetary Affairs 524
Trade Negotiations, Office of the Special Representative for:
Gilbert, Hon. Carl J., Special Representative for Trade Negotia-
tions 67, 645
Garland, Allen H., chairman, Trade Staff Committee 67, 645
Gates, Theodore R., Assistant Special Representative for Industry
and Labor 67, 645
Pomeranz, Morton, acting general counsel, and secretary, Trade Exec-
utive Committee 67, 645
ORAL STATEMENTS BY PUBLIC WITNESSES
Abbitt, Hon. Watkins M., a Representative in Congress from the State of
Virginia
Ackley, Hon Gardner, on behalf of the American Retail Federatiop 921
Aerospace Industries Association of America, Inc.:
Harr, Karl G., Jr., president 3835
Marshall, Robert B., member, International Committee 3847
Stoffel, Albert W., chairman, International Committee-Trade Policy
Task Group-,- 3843
Alevra, Peter, Pulp & Paper Machinery Association 2486
Allen, Edward A., Jr., on behalf of the Stainless Steel Flatware Manu-
facturers Association 1810
Amalgamated Clothing Workers of America, Jacob S. Potofsky, president-- 1267
PAGENO="0007"
VII
Amalgamated Meat Cutters & Butcher Workmen of North America: Page
Feinglass, Abe, international vice president (statement delivered by
Mr. Wishart) 2130
Wishart, James, research director 2130
Fur and Leather Department:
Foner, Henry 3157
Shapiro, Ralph, counsel 3154
American Apparel Manufacturers Association:
Brawley, H. W 1373
Flanagan, William S., board of directors and executive committee~~ 1373
Meredith, Ellis E., executive vice president 1373
Priestland, Carl, economic consultant 1373
American Association of Port Authorities, Clifford B. O'Hara, chairman,
committee XI
American Association of Woolen Importers, Inc.:
Bissinger, Fred, Jr., president 1490
Daniels, Michael P., counsel 1490
American Butter Institute, Rdbert F. Anderson, executive secretary 4178
American Farm Bureau Federation:
McLain, Marvin, director, legislative department 1620
Sherwin, Dale, assistant director, legislative department 1620
Shuman, Charles B., president 1620
American Federation of Labor and Congress of Industrial Organizations:
Biemiller, Andrew J., director, department of legislation 1001
Goldfinger, Nathaniel, director, department of research 1022
American Footwear Manufacturers Association:
Griffin, W. L. Hadley, chairman, board of directors 1983
Olson, Iver M., vice president 1983
Shannon, Thomas F., counsel 2024
Sheskey, William, chairman, national affairs committee 2016
American Fur Merchants' Association, Inc.:
Dreisin, Eugene, cochairman, foreign trade committee 3094
Hessel, B. H., cochairman, foreign trade committee 3096
Sharp, James R., Washington counsel 3094
American Fur Merchants Council, Eugene Dreisin, former president 3159
American Gas Association, Herbert D. Clay, chairman, government re-
lations committee 2315
American Importers Association:
Cutler, Ralph H., Jr., chairman, trade policy committee 933
O'Brien, Gerald, executive vice president 933
Footwear group:
Beispel, Paul 2119
Davis, Jeff 2103
Hemmendinger, Noel, counsel 2103
Organic chemicals group:
Hochschwender, Dr. Karl A., chairman 3508
McCauley, Alfred R., counsel 3508
Stobaugh, Robert B., 3509
Textile and apparel group:
Daniels, Michael P., general counsel 1324
American Iron & Steel Institute:
Roche, John P., president 1753
Stinson, George A., chairman 1753
American Institute for Imported Steel, Inc.:
Graubard, Seymour, counsel 1796
Greenberg, Michael H., associate counsel 1796
American Loudspeaker Manufacturers Association, Herbert Rowe (chair-
man, parts division and distributor products division, Electronic In-
dustries Association) 2881
American Mexican Association:
Blum, William 3200
Bramble, H. ~ 3218
Courtney, Gen. J. Cal, president - 3200
Nathan, Robert R 3202
PAGENO="0008"
VIII
American National Cattlemen's Association, C. W. McMillan, executive Page
vice president 3687
American Petroleum Institute, panel on behalf of:
Dunlop, Robert G., chairman of the board, Sun Oil Co 2239
Ikard, Hon. Frank N., president 2202
Wright, Myron A., chairman of the board, Humble Oil & Refining Co.,
also in behalf of Standard Oil Co. of New Jersey 2210
American Pipe Fittings Association:
Goodridge, Raymond H., secretary-treasurer 1905
Vilsack, Robert M 1905
Wilcox, William F 1908
American Retail Federation:
Ackley, Hon. Gardner 921
Keeney, Eugene, president 921
American Saint Gobain Corp., J. Clifford Knochel, president and chief
executive officer 3976
American Soybean Association, D. Leslie Tindal, president 4222
American Sprocket Chain Manufacturers Association, Edward M. Rhodes,
special consultant 3745
American Textile Manufacturers Institute, panel of:
Dent, Frederick B., chairman, international trade committee 1222
Jackson, Robert C., executive vice president 1217
McCulloch, Donald F., president 1217
Booth, Robert, chairman, Northern Textile Assn 1240
Darman, Morton H., chairman of the board, National Association of
Wool Manufacturers 1243
Robie, Merle C., chairman, executive committee, Cordage Institute~ 1264
Anderson, Hon. John B., a Representative in Congress from the State of
Illinois 290
Anderson, Robert F., executive secretary:
American Butter Institute 4178
National Cheese Institute, Inc 4178
Anderson, Robert W., on behalf of Tanners Council of America, Inc 2023
Anti-Friction Bearing Manufacturers Association, William E. Decaulp,
chairman, foreign trade committee 3740
Apparel Industries Inter-Association Committee:
Ferster, Herbert F., counsel, Clothing Manufacturers Association of
the U.S.A 1517
Korzenik, Sidney S., co~insel 1517
McEvoy, James, research director, National Knitted Outerwear
Association 1517
Appleman, Leonard, immediate past president, Green Olive Trade Asso-
ciation
Archer, John, counsel, Mass Retailing Institute 2671
Arcuri, Andrew, International Union of Dolls, Toys, Playthings, Novelties
and Allied Products of the United States and Canada 2769
Ashley, James M., cochairman, board of trustees, Trade Relations Council
of the United States, Inc 3649
Aspinall, Hon. Wayne N., a Representative in Congress from the State of
Colorado 2397
Association on Japanese Textile Imports, Inc.:
Ishikawa, Samuel, of counsel 1388
Masaoka, Mike M., Washington representative 1388
Atkins, Edward, executive vice president, Volume Footwear Retailers of
America 2078
Atkind, Leon, chairman, Textile Importers Group of the Italy-America
Chamber of Commerce 1649
Baldanzi, George, international president, United Textile Workers of
America 1290
Barnard, Robert C., counsel:
Synthetic Organic Chemical Manufacturers Association 3371
Dry Color Manufacturers Association 3371
Barnes, Delbert, tax counsel, Cummins Engine Co 2471
Bates, Victor, president, Bates Nitewear Co., Inc 15~0
Beispel, Paul, member, footwear group, American Importers Association__ 2119
Bennett, Hon. Charles E., a Representative in Congress from the State of
Florida 3879
PAGENO="0009"
Ix
Bent, Donn N., Meat Importers Association, on be~ialf of John E. Ward, Pate
chairman
Berncolors-Poughkeepsje, Inc., James W. Monks, president 3571
Bevil, Hon. Tom, a Representative in Congress from the `State of
Alabama 1512, 1749
Biaggi, Hon. Mario, a Representative in Congress from the State of New
York 2654
Bicycle Manufacturers Association of America:
Hannon, William M., chairman, Washington affairs committee 3850
Shannon, Thomas, counsel 3850
Biemiller, Andrew J., director, Department of Legislation, American Feder-
ation of Labor, Council of Industrial Organizations 1001
Bissinger, Fred:
American Association of Woolen Importers, Inc. (president) 1490
Synthetic Organic Chemical Manufacturers Association (senior vice
president) 3371
Blake, Peter, acting director, Division of Economic Development, New
Jersey Department of Labor and Industry, on behalf of New Jersey
Economic Development CounciL 2659
Blum, William, American Mexican Association 3200
Boland, Hon. Edward P., a Representative in Congress from the State
of Massachusetts 42841
Boot & Shoe Workers Union, John E. Mara, general president 2066
Booth, Robert, chairman, Northern Textile Association 1240
Bradley, Gail, vice president, League of Women Voters of the United States 979
Bramble, H. P., American Mexican, Association 3218
Brawley, H. W., on behalf of the American Apparel Manufacturers Asso-
ciation 1373
Brazilian-American Chamber of Commerce, Morris Rosoff, president 1686
British-American Chamber of Commerce:
Farquharson, David N. G., executive secretary 1677
Lee, Derek A., president 1677
Pacy, David G., vice president 1677
Bronz, George, on behalf of the Tie Fabric Importers Association 1541
Broun, E. Fontaine, member, exeóutive advisory committee, Man-Made
Fiber Producers Association 1427
Brown, Phillip, on behalf of Rubber Manufacturers Association 2094
Broyhill, Hon. James T., a Representative in Congress from the State of
North Carolina 1501
Brudno, Walter W., counsel, in behalf of Cummins Engine Co. and
Kobe, Inc 2471
Bruno, Vincent J., director, World Trade Department, Commerce &
Industry Association of New York 1208
Bryant, F. Leonard, chairman of the board of directors, Manufacturing
Chemists Association 3490
Buchanan, Hon. John, a Representative in Congress from the State of
Alabama 1812, 1905, 4024~
Burch, Bob, vice chairman, import policy committee, Independent Petro-
leum Association of Amerca, and also president, Rocky Mountain Oil
& Gas Association 2299
Burton, Hon. Laurence J., a Representative in Congress from the State
of Utah 2428
Busby, David, Washington, D.C 2573
Butler, George D., president, Electronic Industries Association 2827
Buzzard, John A., chairman, Import-Export Advisory Committee, National
Confectioners Association 4232
Byrnes, Hon. John W., a Representative in Congress from the State of
Wisconsin and a member of the Committee on Ways and Means, state-
ment with reference to testimony Of Nelson Stitt 1126. 3641
Bywater, William, vice president, International Union of Electrical,
Radio & Machine Workers; also on behalf of International Association
of Machinists & Aerospace Workers and the International Brotherhood
of Electrical Workers 2903
California-Arizona Citrus League, Julian B. Heron, Jr., counsel 4360
PAGENO="0010"
x
Campbell, John, assistant general counsel, United Rubber, Cork, Linoleum Page
& Plastic Workers of America 2137
Campbell, William, chairman, footwear division, Rubber Manufacturers
Association 2094
Cast Iron Soil Pipe Institute:
Hendrickson, Jerome, executive vice president 1813
Hunt, Frederick D., foreign trade consultant 1813
Perry, J. Wiley, Jr., chairman, Import Study Committee 1813
Caterpillar Tractor Co.:
Fender, James, Public Affairs Department 1202
Grant, Virgil V., vice president 1202
C-E Glass, Robert C. Hordis, president 3982
Cement Industry Antidumping Committee:
Hiss, Donald, counsel 4089
Mundt, John C., vice chairman, advisory committee 4089
Ceramic Tile Manufacturers of the United States:
Murchison. David M - 4074
Steele. Robert W 4074
Chamber of Commerce of the United States:
Field, John E 1048
Ostrander, F. Taylor, Jr 1050
Surrey, Walter Sterling, member, international group 1039
Vest, Kay, manager, international group 1039
Chattem Drug & Chemical Co. of Chattanooga, Tenn.:
Colburn, Charles S., engineer 3617
Evans, Ray W., vice president 3591
Vansant, John M., Jr., counsel 3591
Chester, Howard P., executive secretary, Stone, Glass & Clay Coordinating
Committee 4032
Chicago (Ill.) Board of Trade, Henry H. Wilson, president 4323
Christopher, William, on behalf of Manufacturing Chemists Association~ 3506
Christopher, William F., chairman, Society of the Plastics Industry, Inter-
national Committee 3322
Churchill, Robert, member, executive advisory committee, Man-Made Fiber
Producers Association 1427
Citronbaum, Jack, executive vice president, Luggage & Leather Goods Man-
ufacturers Association of America 2158
Clay, Herbert D.: chairman, Government Relations Committee, American
Gas Association; president, National Fuel Gas Co 2315
Clayman, Jacob, administrative director, Industrial Union Department,
AFL-CIO 1776
Cleveland, Hon. James C., a Representative in Congress from the State of
New Hampshire 3345
Clothespin & Veneer Products Ass~ciation,. Myron Solter, counsel 3331
Coerper, Milo G., Washington counsel, German-American Chamber of Com-
merce 1672
Cohen, Samuel Harris, counsel, New York Local No. 1, International
Leather Goods, Plastics & Novelties Workers Union 2143
Colburn, Charles S., engineer, Chattem Drug & Chemical Co. of Chatta-
nooga, Tenn 3617
Coleman, Gerald R., vice president-executive secretary, United Hatters,
Cap & Millinery Workers International Union 1317
Collins, George, assistant to the president, International Union of Electri-
cal, Radio & Machine Workers; also on behalf of the International As-
sociation of Machinists & Aerospace Workers and the International
Brotherhood of Electrical Workers 1776, 2903
Commerce & Industry Association of New York, Vincent J. Bruno, direc-
tor, w-orld trade department 1208
Committee for a National Trade Policy:
Hight, John W., executive director 861
Steinberg, David J., secretary and chief economist 872
Taft, Hon. Charles P., chairman 852
PAGENO="0011"
XI
Committee for Economic Development: Page
Neal, Alfred C., president 914
Roth, Hon. William M., vice chairman, international economic studies,
research and policy committee 914
Conte, Hon. Silvio 0., a Representative in Congress from the State of Mas-
sachusetts 2421
Cooper, Mitchell J., counsel, footwear division, Rubber Manufacturers
Association 2094
Copper & Brass Fabricators Council, Inc.:
Veltfort, Theodore E., managing director 1830
Wardell, Robert J., assistant managing director 1830
Cordage Institute, Merle 0. Robie, chairn~tn, executive committee 1204
Cornett, Hollan, international vice president, Stone & Allied Products
Workers 4055
Cotton, Hon. Norris, a U.S. Senator from the State of New Hampshire~_ 2184
Coughlin, Hon. R. Lawrence, a Representative in Congress from the State
of Pennsylvania 1515, 4073
Council of State Cham!bers of Commerce:
Koch, George S., chairman, Federal finance committee 2439
Rinta, Eugene F., executive director 2439
Courtney, Gen. J. Cal, president, American Mexican Association 3200
Crimmins, Mitchell T., counsel, Tenneco Chemicals, Inc 3565
Culleton, Edward J., president, Green Olive Trade Association 4347
Cümmins Engine Co.:
Barnes, Delbert, tax counsel 2471
Brudno, Walter W., counsel 2471
Curran, Jack, legislative dir~ctor, Laborers' International Union of North
America 4121
Cutler, Ralph H., Jr., chairman, trade policy committee, American Im-
porters Association 933
Cycle Parts and Accessories AssociatiOn, Carrol J. Warrell, chairman,
tariff and customs committee 3858
Damon, E. M. Jr., executive secretary, Mushoom Processors Association_ 3885
Danielian, N. R., president, International Economic Policy Association~ 946
Daniels, Michael P., counsel:
American Association of Woolen Importers, Inc 1490
American Importers Association, textile and apparel group 1324
Darman, Morton H., chairman of the board, National Association of
Wool Manufacturers 1243
Daugherty, Philip, legislative representative, Industrial Union Depart-
ment, AFL-CIO 1776
David Guttman, Inc., David Guttman (executive representative, Miss
Erika, Inc.) 1552
Davies, Richard, consulting economist, Synthetic Organic Chemical Manu-
facturers Association 3476
Davis, Jeff, member, footwear group, American Importers Association~~ 2103
Decaulp, William E., chairman, foreign trade committee, Anti-Friction
Bearing Manufacturers Association 3740
Decker, James, president, Kobe, Iné 2481
Dent, Frederick B., chairman, international trade committee, American
Textile Manufacturers Institute 1222
Dent, Hon. John H., a Representative in Congress from the State of
Pennsylvania 3107
De Santis, Arthur A., executive secretary, Italy-America Chamber of
Commerce 1647
(Greater) Detroit Chamber of Commerce, world affairs committee:
Lyon, Lyman R., chairman-designate 1636
Toro, Carlo's, vice chairman-designate 1636
Dirlam, Dr. Joel B., director, Institute for the Study of International
Aspects of Competition, University of Rhode Island 1840
Discover America Travel Organizations, Inc., Sam N. Mercer, presidenL~ 2581
Distillery, Rectifying, Wine and Allied Workers International Union,
AFL-CIO, Abraham S. Weiss, legislative representative 2801
Donehower, William L., Jr., chairman, executive committee, Rolled Zinc
Manufacturers Association 4112
PAGENO="0012"
XII
Donohue, Hon. Harold D., a Representative in Congress from the State of Page
Massachusetts 2186,4284
Dreisin, Eugene, cochairman, Foreign Trade Committee, American Fur
Merchants' Association, Inc 3094, 3159
Driver, William, president, Manufacturing Chemists Association 3490
Dunlop, Robert G. (chairman of the board, Sun Oil Co.) on behalf of the
American Petroleum Institute 2239
Eagle Shoes of Philadelphia, Inc., Harry A. Kozac (president, Worldwide
Shoes, Inc.) 2162
Eckles, William C., general manager, Pure Milk Products Cooperative____ 4217
Edmondson, Hon. Ed, a Representative in Congress from the State of
Oklahoma - 2403
Egge, George C., Jr., Synthetic Organic Chemical Manufactures Associa-
tion
Electronic Industries Association:
Butler, George D., president 2787
McCauley, Alfred R., special counsel 2876
Price, Jay, director of public affairs 2827
Consumer products division:
Hoffman, Charles N., chairman 2870
Wayman, Jack, staff vice president 2870
Parts and distributor products divisions:
Rowe, Herbert, chairman, world trade committee 2881
Semiconductor division:
Field, John C., economist 2987
Meagher, Edward, chairman 2987
New Delman, Mitchell J., attorney 2987
Emergency Committee for American Trade:
Hazard, Ellison L 749
Kendall, Donald M., chairman 739
McNeil, Robert L., executive vice chairman 836
Townsend, Lynn 750
Empire State Novelty Corp., Ira Weinberg, vice president and general
manager 2779
E. Stanwyck Coil Co., Inc., Edward Stanwyck, president 3016
Evans, Ray W., vice president, Chattem Drug & Chemical Co., of Chatta-
nooga, Tenn 3591
Evans, S. W., member, Umbrella Frame Association of America 2796
Fairchild Camera & Instrument Corp.:
Herzstein, Roberty, attorney 2995
Hinkelman, Thomas, vice president for coporate planning 2995
Fannin, Hon. Paul J., a U.S. Senator from the State of Arizona 4275
Farmers & Manufacturers Beet Sugar Association:
O'Rourke, Dennis, counsel 4243
Reeve, Perc A., executive vice president 4243
Farquharson. David N. G., executive secretary, British-American Chamber
of Commerce 1677
Farrington, James, president, National Association of Scissors & Shears
Manufacturers 2748
Fecteau, George 0., general president, United Shoe Workers of America_. 2061
Feinglass, Abe, international vice president, Amalgamated i\ieat Cutters
& Bu~eher Workmen of North Amer~ca (statement delivered by James
WTishart) 2130
Fender, James, public affairs department, Catepillar Tractor Co 1202
Ferster, Herbert F., counsel, Clothing Manufacturers Association of the
U.S.A. 1517
Field, John E., economist, on behalf of:
Chamber of Commerce of the United States 1048
Electronic Industries Association, semeiconductor division 2987
Fish, Hon. Hamilton, Jr., a Representative in Congress from the State
of New York 3565
Findley, Hon. Paul, a Representative in Congress from the State of Illinois. 3079
Finkel, Leonard E., president, Umbrella Frame Association of America~ 2790
Flanagan, William S., board of directors and executive committee, Ameri-
can Apparel Manufacturers Association 1373
PAGENO="0013"
XIII
Flat glass domestic producers, panel on behalf of:
Hainsfurther, Robert M., vice president and general manager, glass Page
division, PPG Industries, Inc 3986
Hordis, Robrt C., president, C-E Glass 3982
Knochel, J. Clifford, president, chief executive officer, American Saint
Goibain Corp 3976
Stewart, Eugene L., special counsel 3988
Wingerter, Robert G., president, Libby-Owens-Ford Co 3972
Flood, Hon. Daniel J., a Representative in Congress from the State of
Pennsylvania 1961
Florida Citrus Mutual:
Rutledge, Robert W., executive vice president 4305
Underhill, William Amory, cour~sel 43~5
Foner, Henry, on behalf of Fur & Leather Department of the Amalga-
mated Meat Cutters & Butcher Workmen of North America 3157
Friedel, Hon. Samuel N., a Representative in Congress from the State of
Maryland 1508
Fuller, Robert P., member, government affairs committee, National Shoe-
board Conference, Inc 2092
Furrier Joint Council of New York, Charles Hoff, assistant manager~~ 3154
GAF Corporation, chemical division, Alison Webb, director of marketing__ 3568
Gaydos, Hon. Joseph M., a Representative in Congress from the State of
Pennsylvania 3151
GEM's Guernsey Farms, Germantown, Wis., Robert G. Lewis 4212
German-American Chamber of Commerce, Milo G. Coerper, Washington
counsel 1672
Gettys, Hon. Tom S., a Representative in Congress from the State of South
Carolina 1211
Giaimo, Hon. Robert N., a Representative in Congress from the State of
Connecticut 2193
Glass, Irving R. president, Tanners Council of America, Inc 2005
Gleason, Donald H., chairman, international taxation subcommittee, Na-
tional Association of Manufacturers 2438
Golden, David A., tariff and customs counsel, United States Potters
Association 1188
Goldfinger, Nathaniel, director, Department of Research, AFL-CIO 1022
Goldman, Julius, marketing manager, industry sales, Tenneco Colors Divi-
sion, Tenneco Chemicals, Inc 3565
Goldy, Daniel L., vice chairman, committee on commercial policy, United
States Council of the International Chamber of Commerce 1170
Golson, Charles E., on behalf of International Engineering & Construction
Industries Council 2481
Goodman, Richard J. member, international trade committee, National
Grain & Feed Association 3734
Goodridge, Raymond H., secretary-treasurer, American Pipe Fittings
Association 1905
Gordon, Douglas R., assistant executive director, Society of American
Florists 2797
Gordon, Milton, International Union of Dolls, Toys, Playthings, Novel-
ties and Allied Products of the Tinited States and Canada 2768
Gorton, Harry, American Aniline Products, Inc 3575
Graham, Harry L., legislative representative, National Farmers Orga-
nization 987
Graham, James A., chairman, government and international affairs corn-
mi1~tee. Industrial Fn'~tener~ Institvite 3757
Grant, Virgil V., vice president, Caterpillar Tractor Co 1202
Graubard, Seymour, counsel, American Institute for Imported Steel,
Inc 1706
Greenberg, Michael H., associate counsel, American Institute for Im-
ported Steel, Inc 1796
Green Olive Trade Association:
Appleman, Leonard, immediate past president 4347
Culleton, Edward J., president 4347
Nolan, John E., Jr., counsel 4347
Pappas, John, Jr 4347
Schuman, Samuel, past president 4347
PAGENO="0014"
XIV
Griffin, W. L. Hadley, chairman, board of directors, American Footwear Page
Manufacturers Association 1983
Griffin, Hon. Charles H., a Representative in Congress from the State of
i~iississippi 4298
Gubser, Hon. Charles S., a Representative in Congress from the State of
California 4159, 4360
Guttman, David, executive representative, Miss Erika, Inc 1552
Also testifying in behalf of:
David Guttman, Inc 1552
Ricki Knits, Jr 1552
Hagericli, Don A., executive director, Marble Institute of America 4121
Hainsfurther, Robert M., vice president and general manager, glass dlvi-
sion~ PPG Industries, Inc 3986
Halpern, Hon. Seymour, a Representative in Congress from the State of
New York 2190
Hannon, William M., chairman, Washington Affairs Committee, Bicycle
Manufacturers Association of America 3850
Hansen, Hon. Orval, a Representative in Congress from the State of
Idaho 3092
Harr, Karl G., Jr., president, Aerospace Industries Association of Amer-
ica, Inc 3835
Harsha, Hon. William H., a Representative in Congress from the State of
Ohio 2653
Hathaway, Hon. William D., a Representative in Congress from the State
of Maine 1504
Hazard, Ellison L., on behalf of the Emergency Committee for American
Trade
Healy, Patrick B., secretary, National Milk Producers Federation 4181
Healey, William, staff counsel, Machinery & Allied Products Institute 2454
Hemingway, Stuart C., Jr., executive vice president, Stainless Steel Flat-
ware Manufacturers Association 1804
Hemmendinger, Noel, counsel, footwear group, American Importers As-
sociation 2103
Henderson, Dave, executive secretary, National Board of Fur Farm Or-
ganizations 3051
Hendrickson, Jerome, executive vice president, Cast Iron Soil Pipe In-
stitute 1813
Heeron, Julian B., Jr., counsl, California-Arizona Citrus League 4360
Herzs'tein, Robert, attorney, Fairchild Camera & Instrument Corp 2995
Hessel, B. H., chairman, foreign trade committee, American Fur Mer-
chants' Association, Inc 3096
light, John W., executive director, Committee for a National Trade
Policy 861
Higman, W. E., Washington, D.C 2596
Hinkelman, Thomas, vice president for corporate planning, Fairchild Cam-
era & Instrument Corp 2995
Hiss, Donald, counsel, Cement Industry Antidumping Committee 4089
Hobbs, Claude, chairman, committee on foreign trade policy, National
Electrical Manufacturers Association 2934
Hochschw-ender, Dr. Karl A., chairman, American Importers Association,
Organic Chemical Group 3508
Hoff, Charles, assistant manager. Furrier Joint Council of New York 3154
Hoffman, Charles N., chairman, consumer products division, Electronic
Industries Association 2870
Hordis. Robert C., president, C-E Glass 3982
Humble Oil & Refining Co., Myron A. Wright, chairman of the board~ 2210
Hunt, Frederick D.:
Cast Iron Soil Pipe institute, foreign trade consultant 1813
Office Machines International institute, director 3314
Ikard, Hon. Frank N., president, American Petroleum Institute 2202
Imported Hardw-ood Products Association, Inc., James R. Sharp, counseL~ 3195
independent Natural Gas Association of America, Hon. Walter E. Rog-
ers, president 2307
PAGENO="0015"
xv
Independent Petroleum Association of America, panel on behalf of: Page
Jameson, Minor, executive vice president 2299
Burch, Bob, vice chairman, import policy committee, and also presi-
dent, Rocky Mountain Oil & Gas Association~. 2286
Medders, Tom B., .Jr., chairman, import policy committee 2295
Industrial Fasteners Institute:
Graham, James A., chairman, government and international af-
fairs committee 3757
Masterson, Frank, president 3811
Industrial Union Department, AFL-CIO:
Clayman, Jacob, administrative director 1776
Daugherty, Philip, legislative representative 1776
Institute on U.S. Taxation of Foreign Income, Inc., Paul D. Segh-
ers, president 2443
International Association of Machinists & Aerospace Workers:
Bywater, William (vice president, International Union of Electrical
Radio, & Machine Workers) 2903
Collins, George (assistant to the president, International Union of
Electrical, Radio, `& Machine Workers) 2903
International Brotherhood of Electrical Workers:
Bywater, William (vice president, International Union of Electrical,
Radio, & Machine Workers) 2903
Collins, George (assistant to the president, International Union of
Electrical, Radio, & Machine Workers) 2903
International Brotherhood of Operative Potters, Lester Null, president_~_ 4041
International Chemical Workers Union, Frank D. Martino, Washing-
ton director / - 3575
International Economic Policy Association, N. R. Danielian, president 946
International Engineering & Construction Industries Council:
Golson, Charles E ~tsi
Rutherford, H. L 2481
International Ladies' Garment Workers' Union, Lazare Teper, director
of research, presenting statement on behalf of Louis Stulberg, president_ 1269
International Leather Goods, Plastics, & Novelties Workers Union:
Cohen, Samuel Harris, counsel, New York Local No. 1 2143
Weiss, Abraham, legislative representative 2143
International Longshoremen's & Warehousemen's Union, Albert Lannon,
Washington representative 1185
International Trade Club of Chicago, Lawrence C. McQuade, director~_ 2559
International Union of Dolls, Toys, Playthings, Novelties & Allied Products
of the United States and Canada:
Arcuri, Andrew 2769
Gordon, Milton 2768
International Union of Electrical, Radio, & Machine Workers:
Bywater, William, vice president 2903
Collins, George, assistant to the president 2903.
International Union of Radio & Machine Workers of America, George
Collins 1776
Ishikawa, Samuel, of counsel to Mike M. Masaoka, Washington representa-
tive, Association on Japanese Textile Imports, Inc 188
Italy-America Chamber of Commerce:
Atkind, Leon, chairman, Textile Importers Group 1649
De Santis, Arthur A., executive secretavy 1647
Luft, Willard, coehairman, Footwear Importers Group 1647
Jackson, Robert 0., executive vice president, American Textile Manufac-
turers Institute 1217
Jameson, Minor, executive vice president, Independent Petroleum Associa-
tion of America 2286
Jenkins, George 0., Jr., chairman, government affairs committee, National
Shoeboard Conference, Inc 2092
Joelson, Mark, counsel, Pulp & Paper Machinery Association 2489
Johnson, Reuben L., director of legislative services, National Farmers
Union 4237
Keeney, Eugene, president, American~ Retail Federation 921
Keith, Hon. Hastings, a Representative in Congress from the State of
Massachusetts 1980
Kendall, Donald M., chairman, Emergency Committee for American Tracle_ 739
PAGENO="0016"
xv'
Page
Kessler, Bernard, president, Mass Retailing Institute 2673
Knochel, J. Clifford, president, chief executive officer, American Saint
Gobain Corp
Kobe, Inc.:
Brudno, Walter W., counsel 2471
Decker, James, president, finance 2481
Koch, George S., chairman, Federal Finance Committee, Council of State
Chambers of Commerce 2439
Korzenik, Sidney S., counsel, Apparel Industries Inter-Association Corn-
rnitteee 1517
Kozac, Harry A., president, Worldwide Shoes, Inc., also on behalf of
Eagle Shoes of Philadelphia, Inc 2162
Kyros, Hon. Peter N., a Represenative in Congress from the State of
Maine 1982
Laborers' International Union of North America, Jack Curran, legislative
director 4112
Langen, Hon. Odin, a Representative in Congress from the State of
Minnesota 4165
Lannon, Albert, Washingion representative, International Longshoremen's
& Warehousemen's Union 1185
League of Women Voters of the United States, Gail Bradley, vice
president
LeBlond, Daniel W., National Machine Tool Builders Association 2550
Lee, Derek A., president, British-American Chamber of Commerce 1677
Levy, Edward, executive director, National Handbag Association 2160
Lesnick, Edward, director of product planning, Wang Laboratories, Inc____ 3013
Lewis, Robert G.:
Wisconsin Cheese Makers' Association 4212
Geehl's Guernsey Farms, Germanteowil, Wis 4212
Libbey-Owens Ford Co., Robert G. Wingerter, president 3972
Liberty Lobby, Warren S. Richardson, general counsel 1630
Lincoln, Donald 0., trade, legislative and legal consultant, Maine Sardine
Packers Association and Maine Sardine counsel 3892
Lobred, Leonard K.:
National Canners Association, director, international trade division__ 4327
U.S. National Fruit Export Council, secretary-treasurer 4367
Lovre, Hon. Harold 0., Washington counsel, Natjonal Board of Fur Farm
Organizations 3051
Luft, Williard, cochairman, Footwear Importers Group of the Italy-Amer-
ica Chamber of Commerce 1647
Luggage & Leather Goods Manufacturers of America, Jack Citronbaum,
executive vice president 2158
Lynn, Bruce N., president, National Cotton Council of America 1494
Lyon, Lyman R., chairman-designate, world affairs committee, Greater
Detroit Chamber of Commerce 1636
MacArthur, Arthus R., Janesville, Wis 3172
Machinery & Allied Products Institute:
Healey, William, staff counsel 2454
Stewart, Charles W., president 2454
Magdanz, Don F., executive secretary-treasurer, National Livestock
Feeders Association 3704
Mahon, Hon. George H., a Representative in Congress from the State of
Texas 2179
Mahoney, James, member, executive advisory committee, Man-Made Fiber
Producers Association 1427
Maine Sardine Packers Association and Maine Sardine Council:
Lincoln, Donald 0., trade, legislative and legal consultant 3892
Reed, Richard E., executive secretary 3892
Warren, James L., chairman, legislative committee 3892
Man-Made Fiber Producers Association:
Executive advisory committee:
Broun, E. Fontaine 1427
Churchill, Robert 1427
Mahoney, James 1427
Stoll, Dr. Reiner 1427
Swank, Dr. Howard 1427
Ramsey, Claude, chairman of the board 1427
Stewart, Eugene L., counsel 1427
PAGENO="0017"
XVII
Manufacturing Chemists Association: Pam
Bryant, F. Leonard, chairman of the board of directors 3490
Christopher, William 3506
Driver, William, president 3490
Plumb, Robert 3490
Mara, John E., general president, Boot & Shoe Workers Union 2066
Marble Institute of America, Don A. Hagerich, executive director 4121
Marshall, Robert B., member, International Committee, Aerospace Indus-
tries Association of America, Inc 3847
Martin, Hon. Dave, a Representative in Congress from the State of
Nebraska 3678
Martin, Lewe B.:
Miniature Precision Bearing Co., counsel 3345
Mushroom Processors Association, counsel 3885
Stainless Steel Flatware Manufacturers Association, secretary 1804
Martino, Frank D., Washington director, International Chemical Workers
Union 3587
Marzetti, Alex, chairman, government relations committee, Mushroom
Processors Association 3885
Masaoka, Mike M., Washington representative, Association on Japanese
Textile Impoi4ts, Inc 1388
Masterson, Frank, president, Industrial Fasteners Institute 3811
Mass Retailing Institute:
Archer, John, counsel 2671
Kessler, Bernard, president 2673
Peabody, Hon. Endicott 2671
Massachusetts Department of Commerce and Development, Carroll P.
Sheehan, commissioner 2656
May, Ernest M., president, Otto B. May, Inc 3572
McCauley, Alfred R., counsel:
American Importers Association, organic chemicals group 3508
Electronic Industries Association 2876
McClanahan, W. W., executive president, National Coal Policy Con-
ference 2335
McClure, Hon. James A., a Representative in Congress from the State of
Idaho 4290
McCulloch, Donald F., president, American Textile Manufacturers Insti-
tute 1217
McEvoy, James, research director, National Knitted Outerwear Asso-
ciation 1517
McEwen, Hon. Robert C., a Representative in Congress from the State of
New York 1968
McFall, Hon. John J., a Representative in Congress from the State of
California 4160
McKenna, Neal, on behalf of Rubber Manufacturers Association 2094
McLain, Marvin, director, legislative department, American Farm Bureau
Federation 1620
McMillan, C. W., executive vicce president, American National Cattle-
men's Association 3687
McNeill, Roberi L., executive vice chairman, Emergency Committee for
American Trade 836
McQuade, Hon. Lawrence C.. director, International Trade Club of Ghi-
cago 2559
Meagher, Edward, chairman, semiconductor division, Electronics Indus-
tries Association 2987
Meat Importers Association, Donn N. Bent, on behalf of John E. Ward,
chairman 3696
Medders, Tom B., Jr., chairman, import policy committee, Independent
Petroleum Association of America 2295
Mercer. Sam N., president, Discover America Travel Organizations, Inc~ 2581
Meredith, Ellis E., executive vice president, American Apparel Manufac-
turers Association 1373
Metal Masters of Baltimore, Md., H. M. Weiss, president 1910
Minard, Richard A., officer, Miniature Precision Bearing Co 3345
Minchew, Daniel, legislative director, United States~Japan Trade CounciL~ 1066
Miniature Precision Bearing Co.:
Martin, Lewe B., counsel 3345
Minard, Richard A., officer 3345
PAGENO="0018"
XVIII
Mink Hon. Patsy T., a Representative in Congress from the State of Page
Hawaii 2198
Mizell, Hon. Wilmer D., a Representat.ive in Congress from the State of
North Carolina 1513, 1549
Miss Erika, Inc., David Cuttman, executive representative 1552
Mollohan, Hon. Robert H., a Representative in Congress from the State of
West Virginia 4293
Monagan. Hon. John S., a Representative in Congress from the State of
Connecticut 4229
Monks James W., president, Berncolors-Poughkeepsie, Inc 3571
Moorcones, John S., on behalf of the National Restaurant Association___ 3725
Mundt, John C., vice chairman, advisory committee, Cement Industry
Antidumping Committee 4089
Murchison, David C., on behalf of Ceramic Tile Manufacturers of the
United States 4074
Mushroom Processors Association:
Damon, E. M., Jr., executive secretary 3885
Martin, Lewe B., counsel 3555
Marzetti, Alex, chairman, government relations committee 3885
National Association of Secondary Material Industries, Inc., Sidney Silver.
vice president, foreign trade division 3823
National Association of Manufacturers. Donald H. Gleason, chairman,
international taxation subcommittee 2438
National Association of Wool Manufacturers. Morton H. Darman, chair-
man of the board 1243
National Association of Scissors & Shears Manufacturers, James Far-
rington, president 2748
National Board of Fur Farm Organizations:
Henderson, Dave, executive secretary 3051
Lovre, Hon. Harold 0., Washington counsel 3051
Plaisted, Ken, general counsel 3051
Woodley, Albert 3057
National Canners Association, Leonard K. Lobred, director, international
trade division 4327
National Cheese Institute. Inc., Robert F. Anderson, execi~tive secretary~ 4178
National Coal Association, Brice O'Brien, vice president 2318
National Coal Policy Conference. W. W. McClanahan, executive president_ 2335
National Confectioners Association, John A. Buzzard, chairman, import-
export advisory committee 4232
National Cotton Council of America:
Lynn, Bruce N., president 1494
Weilford, Dabney S., economist 1494
National Electrical Manufacturers Association:
Hobbs, Claude, chairman, committee on foreign trade policy 2934
Simpson, John W 2934
National Farmers Organization, Harry L. Graham, legislative repre-
sentative 987
National Farmers LTnion, Reuben L. Johnson. director of legislative
services 4237
National Foreign Trade Council:
Scott, Robert T., vice president 928
Walker, Melville H., executive vice president 928
National Fuel Gas Co., Herbert D. Clay, president 2315
National Grain & Feed Association, Richard J. Goodman, member, inter-
national trade committee 3734
National Handbag Association:
Levy Edward, executive director 2160
Weiss, Steven J.. counsel 2155
National Livestock Feeders Association, Don F. Magdanz, executive secre-
tary-treasurer 3704
National Machine Tool Builders Association:
Henry D. Sharpe, Jr., first vice president 2489
Daniel W. LeBlond 2550
National Milk Producers Federation. Patrick B. Healy, secretary 4181
PAGENO="0019"
XIX
National Restaurant Association: Page
Moorcones, John S 3725
Neville, Robert B 3725
Nunn, Ira H., counsel 3725
National Shoeboard Conference, Inc.:
Fuller, Robert P., member, government affairs committee 2092
Jenkins, George 0., Jr., chairman, government affairs committee_~~ 2092
Nathan, Robert R., American Mexican Association 3202
Nation-Wide Committee on Import-Export Policy, 0. R. Strackbein,
president 883
Neal, Alfred C., president, Committee for Economic Development 914
Nelson, Arthur, president, Revere Stainless Steel Sink Corp 1913
Neville, Robert B., on behalf of the National Restaurant Association__ 3725
New Delman, Mitchell J., attorney, semiconductor division, Electronic
Industries Association 2987
New Jersey Economic Development Council, Peter Blake, acting director,
Division of Economic Development, New Jersey Department of Labor
and Industry 2659
Nolan, John E., counsel, Green Olive Trade Association 4347
North Atlantic Ports Association, Clifford B. O'Hara, chairman, foreign
commerce and Government traffic committee 975
Northern Textile Association, Robert Booth, chairman 1240
Null, Lester, president, International Brotherhood of Operative Potters~ 4041
Nunn, Ira H., counsel, National Restaurant Association 3725
O'Brien, Brice, vice president, National Coal Association 2318
O'Brien, Gerald, executive vice president, American Importers Association O~3
O'Rourke, Dennis, counsel, Farmers and Manufacturers Beet Sugar As-
sociation 4243
O'Hara, Clifford B., appearing in behalf of American Association of Port
Authorities (chairman, committee XI) and North Atlantic Ports As-
sociation (chairman, foreign commerce and Government traffic com-
mittee)
Office Machines International Institute, Frederick P. Hunt, director_~ 3314
Ohio Greenhouse Cooperative Association, Roger Ruetenik, vice president 4371
Olson, Iver M., vice president, American Footwear Manufacturers As-
sociation 1983
Oregon Cattlemen's Association, Fred Phillips, president 3693
Ostrander, F. Taylor, Jr., on behalf of the Chamber of Commerce of the
United States 1050
Otto B. May, Inc., Ernest M. May, president 3572
Pacy, David G., vice president, British-American Chamber of Commerce__ 1677
Palmer, Charles, Southern Dyestuff Co 3575
Pappas, John, Jr., Green Olive Trade Association 4347
Peabody, Hon. Endicott, Mass Retailing Institute 2671'
Perkel, George, research director, Textile Workers Union of America~ 1277
Perry, J. Wiley, Jr., chairman, import study committee, Cast Iron Soil
Pipe Institute 1813
Peterson, Dean A., economic consultant, Volume Footwear Retailers of
America 2082
Philips, A. Lloyd, president, American Aniline Products, Inc 3575
Phillips, Fred, president, Oregon Cattlemen's Association 3693
Piquet, Dr. Howard S., Washington, D.C. 2676
Plaisted, Ken, general counsel, National Board of Fur Farm Organizations 3051
Plumb, Robert, Manufacturing Chemists Association 3490
Pollock, William, general president, Textile Workers Union of America~ 1277
Potofsky, Jaeob S.. pre~iclcut, Amalgamated Clothing Workers of America_ 1267
PPG Industries, Inc., Robert M. Hainsfurther, vice president and general
manager, glass division 3986
Preyer, Hon. Richardson, a Representative in Congress from the State of
North Carolina 1550
Price, Jay, director of public affairs, Electronic Industries Association~ 2827
Priestland, Carl, economic consultant, American Apparel Manufacturers
Association 1373
Pucinski, Hon. Roman C., a Representative in Congress from the State of
Illinois 3647
PAGENO="0020"
xx
Pulp & Paper Machinery Association: Page
Alevra, Peter 2486
Joelson, Mark, counsel 2489
Pure Milk Products Cooperative, William C. Eckles, generki manager 4217
Quillen, Hon. James, a Representative in Congress from the State of Ten-
nessee 1617
Ramsey, Claude, chairman of the board, Man-Made Fiber Producers Asso-
~iation 1427
Reed, Richard E., executive secretary, Maine Sardine Packers Association
and Maine Sardine Counsel 3892
Reeve. Perc A., executive vice president. Farmers and Manufacturers
Beet Sugar Association 4243
Rehm, John B.. Washington, D.C 2576
Reiser, Ralph, international president, United Glass & Ceramic Workers_ 4045
Revere Stainless Steel Sink Corp., Arthur Nelson. president 1913
Rhodes, Edward M., special consultant, American Sprocket Chain Manu-
facturers Association 3745
Richardson, Warren S., general counsel, Liberty Lobby 1630
Ricki Knits, Jr., David Guttrnan (executive representative, Miss Erika,
Inc.) 1552
Rinta, Eugene F., executive director, Council of State Chambers of
Commerce 2439
Rivers, Hon. L. Mendel, a Representative in Congress from the State of
South Carolina 3642
Robie, Merle C., chairman, executive committee, Cordage Institute 1264
Robison, Hon. Howard W., a Representative in Congress from the State
of New York 2188
Roche, John P., president, American Iron & Steel Institute 1753
Rocky Mountain Oil & Gas Association, president, Bob Burch 2299
Rogers, Hon. Paul G., a Representative in Congress from the State of
Florida 4164
Rogers, Hon. Walter E., president, Independent Natural Gas Association of
America 2307
Rolled Zinc Manufacturers Association, William L. Donehower, Jr., chair-
man, executive committee 4112
Rose, Richard C., president, Trade Relations Council of the United States,
Inc 3649
Rosoff, Morris, president, Brazilian-American Chamber of Commerce__ - 1686
Roth, William M., vice chairman, international economic studies, research
and policy committee, Committee for Economic Development 914
Row-an, Richard L., associate professor of industry and associate director,
research unit, Wharton School of Finance and Commerce, University of
Pennsylvania 1561
Rowe, Herbert, chairman, world trade committee, parts division and dis-
tributor products division, Electronic Industries Association (also on
behalf of the American Loudspeaker Manufacturers Association) 2881
Rubber Manufacturers Association:
Brown, Neal 2094
Campbell, William, chairman, footwear division 2094
Cooper, Mitchell, counsel, footwear division~. 2094
McKenna, Neal 2094
Ruetenik, Roger. vice president, Ohio Greenhouse Cooperative Association 4371
Ruth, Hon. Earl B., a Representative in Congress from the State of North
Carolinia 4172
Rutherford, H. L., on behalf of International Engineering & Construction
Industries Council 2481
Rutledge, Robert W., executive vice president, Florida Citrus Mutual 4305
Schenk, Prof. Alan, Wayne State University Law School 2585
Schuman, Samuel, past president. Green Olive Trade Association 4347
SchwengeL Hon. Fred, a Representative in Congress from the State of
Iowa, submitting statement of William L. Huilsiek (vice president, cor-
porate development, Amana Refrigeration, Inc.) 1209
Schwenger, Robert B., Kensington, Md 2726
Scott, Robert T., vice president, National Foreign Trade Council 928
PAGENO="0021"
xx'
Seghers, Paul D., president, Institute on U.S. Taxation of Foreign Income, Page
Inc 2443
Shannon, Thomas F., counsel:
American Footwear Manufacturers Association 2024
Bicycle Manufacturers Association of America 3850
Shapiro, Ralph, counsel, Fur & Leather Department of the Amalgamated
Meat Cutters & Butcher Wo~'kmen of North America 3154
Sharp, James R., counsel:
American Fur Merchants' Association, Inc. 3094
Imported Hardwood Products Association, Inc 3195
Sharpe, Henry D. Jr., first vice president, National Machine Tool Builders
Association 2489
Sheehan, Carroll P., commissioner, Massachusetts Department of Corn-
merce and Development 2656
Sheehan, John J., legislative director, United Steelworkers of America~_ 1823
Sherwin, Dale, assistant director, legislative department, American Farm
Bureau Federation 1620
Sheskey, William, chairman, national affairs committee, American Foot-
wear Manufacturers Association 2016
Shuman, Charles B., president, American Farm Bureau Federation 1620
Silver, Sidney, vice president, foreign trade division, National Association
of Secondary Material Industries, Inc 3823
Simpson, John W., on behalf of the National Electrical Manufacturers As-
sociation 2934
Sindelar, Charles, staff assistant, Zenith Radio Corp 2945
Sisk, Hon. B. F., a Representative in Congress from the State of C;alifornia 4157
Slide Fastener Association, Myron Solter, counsel 3864
Sloane, Jack, president, Standard Cellulose & Novelty Co 2781
Society of American Florists, Douglas R. Gordon, assistant executive di-
rector 2797
Society of the Plastics Industry, International Committee:
Christopher, William F., chairman 3322
Tiernan, Robert R., counsel 3322
Solter, Myron, counsel:
Clothespin & Veneer Produdts Association 3331
Slide Fastener Association 3864
South Carolina, State of, Lt. Gov. John Carl West, on behalf of Gov. Rob-
ert E. McNair 1211
St Germain, Hon. Fernand J., a Representative in Congress from the State
of Rhode Island 1509, 2195
Staggers, Hon. Harley 0., a Representative in Congress from the State of
West Virginia 1976
Stainless Steel Flatware Manufacturers Association:
Allen, Edward A., Jr 1810
Hemingway, Stuart C., Jr., executive vice president 1804
Martin, Lewe B., secretary 1804
Standard Cellulose & Novelty Co., Jack Sloane, president 2781
Standard Oil Co. of New Jersey, i\'Iyron A. Wright (chairman of the board,
Humble Oil & Refining Co.) 2210
Stanwyck, Edmund, president, E. Stanwyck Coil Co., Inc 3016
Steele, Robert W., on behalf of Ceramic Tile Manufacturers of the United
States 4074
Steiger, Hon. William A., a Representative in Congress from the State of
Wisconsin 4300
Steinberg, David J., secretary and chief economist, Committee for a Na-
tional Trade Policy 872
Stewart, Charles W., president, Machinery & Allied Products Institute__ 2454
Stewart, Eugene L., counsel:
American Loudspeaker M~nufacturers Association 2809, 2881
Electronic Industries Association 2809, 2881
Man-Made Fiber Producers Association 1427
Flat Glass Domestic Producers Association 3988
Trade Relations Council of the United States, Inc 3649
U.S. Dyestuff Producers 3575
PAGENO="0022"
XXII
Page
Stinson, George A., chairman, American Iron & Steel Institute 1753
Stitt, Nelson A., director, United States-Japan Trade Council:
Testimony 1066, 1127
Membership list 1131
Registration statement filed with Department of Justice, pursuant
to Foreign Agents Registration Act of 1938 1143
Statement of Congressman John W. Byrnes (Wis.), a Member of the
Committee on Ways and Means, with reference to testimony of Mr.
1128, 3641
Interrogation by Congressman John W. Byrnes (Wis.) of Mr. Stitt~_ 1155
Stobaugh, Robert B., American Importers Association, Organic Chemicals
Group 3509
Stoffel, Albert W., chairman, International Committee-Trade Policy Task
Group, Aerospace Industries Association of America, Inc 3843
Stoll, Dr. Reiner, member, executive advisory committee, Man-Made Fiber
Producers Association 1427
Stone & Allied Products Workers, Hollan Cornett, international vice
president ~405~
Stone, Eugene, III, president, Stone Manufacturing Co 1554
Stone, Glass & Clay Coordinating Committee, panel in behalf of:
Chester, Howard P., executive secretary 4032
Cornett, Hollan, international vice president, Stone & Allied Products
Workers 4055
Null, Lester, president, International Brotherhood of Operative
Potters 4041
Reiser, Ralph, international president, United Glass & Ceramic
Workers
Stone Manufacturing Co., Eugene Stone III, president 1554
Strackenbein, 0. R., president, Nation-Wide Committee on Import-Export
Policy 883
Stratton, Hon. Samuel S., a Representative in Congress from the State
of New York 1965
Sun Oil Co., Robert G. Dunlop, chairman of the board 2239
Surrey, Walter Sterling, member, international committee, Chamber of
Commerce of the United States 1039
Swank, Dr. Howard, member, executive advisory committee, Man-Made
Fiber Producers Association 1427
Synthetic Organic Chemical Manufacturers Association:
Barnard, Robert C., counsel 3371
Bissinger, Fred, senior vice president 3371
Davies, Richard, economist 3476
Egge, George V., Jr 3364
Turchan, Thomas P., president 3364
Taft, Hon. Charles P., chairman, Committee for a National Trade Policy-- 852
Tanners Council of America, Inc.:
Anderson, Robert W 2023
Glass, Irving R., president 2005
Taquey, Charles H., Washington, D.C 2723
Tenneco Chemicals, Inc.:
Crimmins, Michael T., counsel 3565
Goldman, Julius, marketing manager, industry sales, Tenneco color
division 3565
Teper, Lazare, director of research, International Ladies' Garment Work-
ers' Union, AFL-CIO 1269
Textile Workers Union of America:
Perkel, George, research director 1277
Pollock, William, general president 1277
Thomson, Hon. Vernon W., a Representative in Congress from the State of
Wisconsin 3971
Thurmond, Hon. Strom, a ITS. Senator from the State of South Carolina~ 1538
Tie Fabric Importers Association, George Bronz 1541
Tiernan, Robert R., counsel, Society of the Plastics Industry, Interna-
tional Committee 3322
Tindal, D. Leslie, president, American Soybean Association 4222
Toro, Carlos, vice chairman-designate, world affairs committee, Greater
Detroit Chamber of Commerce 1636
PAGENO="0023"
XXIII
Townsend, Lynn, on behalf of the Emergency Committee for American Page
Trade 750
Trade Relations Council of the United States, Inc.:
Ashley, James M., cochairman, board of trustees 3649
Rose, Richard C., president 3649
Stewart, Eugene L., general counsel 3649
Turchan, Thomas P., president, Synthetic Organic Chemical Manufac-
turers Association 3364
Uhler, Berman, Blackman Uhier Chemical Division 3575
Umbrella Frame Association of America:
Evans, S. W., member 2796
Finkel, Leonard E., president 2790
Underhill, William Amory, counsel, Florida Citrus Mutual 4305
United Glass & Ceramic Workers, Ral~li Reiser, international president~. 4045
United Hat, Cap & Millinery Workers International Union, Gerald R.
Coleman, vice president-executive secretary 1317
United Rubber, Cork, Linoleum & Plastic Workers of America, John
Campbell, assistant general counsel 2137
United Shoe Workers of America, George 0. Fecteau, general president~ 2061
United States Council of the International Chamber of Commerce, Daniel
L. Goldy, vice chairman, committee on commercial policy 1170
United States-Japan Trade Council:
Minchew, Daniel, legislative director 1066
Stitt, Nelson A., director;
Testimony 1066, 1127
Membership list 1131
Registration statement filed with Department of Justice, pursuant
to Foreign Agents Act of 1938 1143
Statement of Congressman John W. Byrnes (Wis.) a member of the
Committee on Ways and Means, with reference to testimony of
Mr. stitt 1126, 34341
Interrogation by Congressman Byrnes (Wis.) of Mr. Stitt 1155
United Steelworks of America, John J. Sheehan, legislative director 1823
United Textile Workers of America, George Baldanzi, international
president 1290
U.S. dyestuff producers, panel of:
Gorton, Harry, American Aniline Products, Inc 3575
Palmer, Charles, Southern Dyestuff Co 3575
Phillips, A. Lloyd, president, American Aniline Products, Inc 3575
Stewart, Eugene L., counsel 3575
TJhler, Berman, Blackman, Uhier Chemical Division 3575
U.S. National Fruit Export Oouneil, Leonard K. Lobred, secretary-
treasurer 4367
U.S. Potters Association, David A. Golden, tariff and customs counsel 1188
Vansant, John M., Jr., counsel, Chatten Drug & Chemical Co., of Chatta-
nooga, Tenn 3591
Veitfort, Theodore E., managing director, Copper & Brass Fabricators
Council, Inc 1830
Vest, Kay, manager, international group, Chamber of Commerce of the
United States 1039
Vilsack, Robert M., on behalf of American Pipe Fittings Association 1905
Volume Footwear Retailers of America:
Atkins, Edward, executive vice president 2078
Peterson, Dean A., economic consultant 2082
Weiss, Morton A., president 2074
Walker, Melville H., executive vice president, National Foreign Trade
Council 928
Wang Laboratories, Inc., Edward Lesnick, director of product planning~ 3013
Wardell, Robert J., assistant managing director, Copper & Brass Fabrica-
tors Council, Inc 1830
Warrell, Carrol J., chairman, tariff and customs committee, Cycle Parts
& Accessories Association 3858
Warren, James L., chairman, legislative committee, Maine Sardine Packers
Association and Maine Sardine counsel 3892
Waynmin, staff vice president, consumer products division, Electronic In-
dustries Association 2870
Webb, Alison, director of marketing, chemical division, GAF Corporation__ 356$
PAGENO="0024"
XXIV
Weinberg, Ira, vice president and general manager, Empire State Novelty PaEC
Corp 2779
WTeiss, Abraham, legislative counsel:
Distillery, Rectifying, Wine, & Allied Workers International Union__ 2801
International Leather Goods, Plastics, & Novelties Workers Union____ 2143
Weiss, H. M., president, Metal Masters of Baltimore, Md. 1910
Weiss, Morton B., president, Volume Footwear Retailers of America 2074
Weiss. Steven J., counsel, National Handbag Association 2155
Wellford, Dabney S., economist, National Cotton Council of America 1494
West, Hon. John Carl, Lieutenant Governor, State of South Carolina,
on behalf of Gov. Robert E. McNair 1211
Wilcox, William F., on behalf of American Pipe Fittings Association~~ 1908
Wilson, Henry H., president, Chicago (Ill.) Board of Trade 4323
Wingerter, Robert G., president, Libbey?Owens-Ford Co 3912
Wisconsin Cheese Makers' Associa~on, Robert G. Lewis 4212
Wishart, James, research director, Amalgamated Meat Cutters & Butcher
Workmen of North America 2130
Wold, Hon. John S., a Representative in Congress from the State of
Wyoming 4173
Woodley, Albert, National Board of Fur Farm Organizations 3057
Worldwide Shoes, Inc., Harry A. Kozac, president 2102
Wright, Joseph S., chairman of the board, Zenith Radio Corp 2945
Wright, Myron A. (chairman of the board, Humble Oil & Refining Co.),
on behalf of the American Petroleum Institute 2210
Wyman, Hon. Louis C., a Representative in Congress from the State of
New Hampshire 1971
Zenith Radio Corp:
Sindelar, Charles, staff assistant 2945
Wright, Joseph S., chairman of the board 2045
Zwach, Hon. John M., a Representative in Congress from the State of
Minnesota 3881
MATERIAL SUBMITTED FOR THE RECORD
Br GOVERNMENT WITNEssEs
Commerce, Department of:
Stans, Hon. Maurice H., Secretary:
Cordage industry (United States), information concerning im-
ports and employment status 491
DISC, letter relating to, with enclosure, to Chairman Mills 2334
Escape clause decisions of Tariff Commission, and President's
actions thereon 405
Wool/man-made fiber textiles, foreign import restrictions on, report~ 309
Labor, Department of:
Shultz, Hon. George P., Secretary:
Exports and imports, employment relationships 008
Letter dated June 17, 1970, to Chairman Mills, with attachment
proposing amendment to section 304 of H.R. 14870 594
Written statement concerning "Cabinet Task Force Report on Oil
Import Control" with appendix containing observations of some
criticisms of the task force report which occurred during testi-
mony of June 3, 1970 2340
State, Department of, David M. Abshire, Assistant Secretary for (`rn-
gressional Relations:
Letter dated May 21, 1970, to Chain~an Mills, with regard to wages 579
Letter to Chairman Mills 4212
Trade Negotiations, Office of Special Representative of, Hon. Carl J.
Gilbert, Special Representative:
Benzenoid chemicals, title IV of H.R. 17551 (90th Cong.), statement
pertaining to 000
Border tax ~adjustments 720
Export-import trade breakdown, category by category 127
Response to Synthetic Organic Chemical Manufacturers Association
(SOCMA) questions 719
Staff Papers and Inventory of Industrial Nontariff Barriers 166
PAGENO="0025"
xxv
Treasury, Department of:
Englert, Roy T., Acting General Counsel, letter dated June 16, 1970, Pa50
to Chairman Mills with regard to GATT 528
Nolan, John S., Acting Assistant Secretary for Tax Policy:
Company and Industry Responses to DISC Proposal, comments_ 543
U.S. Income Tax Provisions Affecting Tax Planning for Sales in
Foreign Markets, summary 546
Report entitled "Domestic International Sales Corporation, Techni-
cal Explanation of Treasury Proposal" 511
Rossides, Eugene P., Assistant Secretary for Enforcement and
Operations:
Antiduimping and countervailing duty laws, information regarding
administration of 523
Response to testimony of Cast Iron Soil Pipe Institute, letter
dated July 16, 1970, to John M. Martin, Jr., chief counsel, Com-
mittee on Ways and Means, with enclosures 1822a
Voicker, Paul A., Under Secretary for Monetary Affairs:
Foreign direct taxation laws affecting export activities, provi-
sions in 548
Treasury revenue estimates concerning DISC 524
B~ PUBLIC WITNESSES
Ajinomoto Co. of New York, Inc., H. William Taiika, statement 3621
Alcan Aluminum Corp., Eric A. Trigg, president, statement 3831
Alder, Donald H., president, Maestro Import Industries, Inc., letter, dated
May 13, 1970, to John M. Martin, Jr., chief counsel, Committee on Ways
and Means 3305
Allerhand, Irving W., on behalf of CITC Industries, Inc., statement 2171
Aluminum Association, Monroe Leigh, counsel, international policy com-
mittee, statement 3827
Amalgamated Clothing Workers of America, supplemental statement pre-
ceded by letter of transmittal from Stanley H. Ruttenberg 1271
Amalgamated Meat Cutters and Butcher Workmen (AFL-CIO), Leon B.
Schachter, vice president and director, Washington office, statement__ 3961
Amana Refrigerator, Inc., William L. Hulisiek, vice president, corporate
development, prepared statement submitted by Representative Schwen-
gel of Iowa 1209
American Association of University Women, Mrs. Jean Ross, chairman,
legislative program committee, statement 1746
American Cotton Shippers Association, Neal P. Gillen, vice president and
general manager, letter, dated June 8, 1970, to Chairman Mills 2606
American Cyanamid Co., C. D. Siverd, president and chief executive of-
ficer, statement 3630
American Federation of Labor-Congress of Industrial Organizations, An-
drew J. Biemiller, director, department of legislation:
Policy resolution 1015
Letter to Chairman Mills 2603
American Flint Glass Workers' Union of North America, George M.
Parker, president, statement 4061
American Footwear Manufacturers Association, Iver M. Olson, vice presi-
dent, letter dated June 17, 1970, to Chairman Mills, with enclosures~__ 2036
American Fur Breeder, Harold Scales, editor and publisher, statement__ 3181
American Importers Association:
Machine tool group, Eric R. Bachman, chairman of steering committee,
statement 2556
Textile and apparel group, Michael P. Daniels, counsel:
"Long-Term Textile Outlook: More" (paper) 1333
"Textiles in the Seventies," article from the Chemical and Engi-
neering News 1345
Trade policy committee, Ralph H. Cutler, Jr., chairman, brochure
entitled "Here's What's Wrong With Import Quotas" 938
American Institute of Certified Public Accountants, Division of Federal
Taxation, statement 2002
American Paper Institute, John F. Darrow, vice president, letter, dated
June 2, 1970, to Chairman Mills 260-1
American Petroleum Refiners Association, Walter F~mariss. Jr., president,
statement 2370
PAGENO="0026"
XXVI
Amity Leather Products Co., Leonard E. Benedict, secretary, letter dated Page
May 27, 1970, to Chairman Mills 2175
Apel, Peter C., president, Upholstery & Decorative Fabrics Association of
America, letter dated June 23, 1970, to Chairman Mills 1003
Associated Fur Manufacturers Association, Inc., J. George Greenberg,
executive vice president, statement 3183
Association of Food Distributors, Inc., Harold Bruce, executive vice presi-
dent, statement 4338
Association of Yarn Distributors, Mars J. Bishop, president, letter dated
May 22, 1970, to John M. Martin, Jr., chief counsel, Committee on Ways
and Means 1590
Association of Fur Farm Suppliers, Inc.:
Bear, David A., past president, statement 3179
Graff, Herbert, statement 3179
Atkins. Edward, executive vice president, Volume Footwear Retailers of
America, supplementary statement 2088
Australia, Government of, letter dated June 16, 1970, forwarded by letter
of transmittal from the U.S. Department of State 1579
Auto Air Accessories, Inc., Howard E. Roberts, president, letter, dated
June 9, 1970, to Chairman Mills 2644
Automobile Manufacturers Association, Inc., Thomas C. Mann, president,
letter dated May 20, 1970, to Chairman Mills 1728
B. F. Goodrich Co., Charles M. Jorgeson, general manager, textile division,
statement 1613
Bachrnann, Eric R., chairman of steering committee, American Importers
Association, machine tool group, statement 2556
Baguena, Mariano, executive secretary, Spain-U.S. Chamber of Commerce,
Inc., statement 1736
Baker, Hon. Howard H., Jr., a U.S. Senator from the State of Tennessee,
statement 3619
Ballantyne of Omaha (Nebr.), Inc., J. Robert Hoff, president, statement~ 3947
Barschdorf, Milton P., port director, Greenville (Miss.) Port Commission,
letter, dated June 5, 1970, to Chairman Mills 2635
Bauer, Richard J., chairman of the board, Independent Zinc Alloyers
Association, statement 4120
Baughman, Harry W., Jr., national president, Window Glass Cutters
League of America, statement 4063
Beam's International Division, 0. T. Beam, letter, dated June 8, 1970, to
Chairman Mills 2644
Bear, David A., past president, Association of Fur Farm Suppliers, Inc.,
statement 3179
Beemer, George T., manager, Florida Flower Association, Inc., statement 2800
Benedict, Leonard E., secretary Amity Leather Products Co., letter dated
May 27, 1970. to Chairman Mills 2175
Berard, Jack B., president, Pacific Coast Coffee Association:
Letter, dated May 25, 1970, to Chairman Mills 3964
Letter, dated June 26, 1970, to Chairman Mills, with attachments~ 3964
Berman, A. T., Toby Berman Corp., letter dated May 20, 1970, to John M.
Martin, Jr., chief counsel, Committee on Ways and Means 1568
Berry, Hon. E. Y. a Representative in Congress from the State of South
Dakota, statement 1700
Biemiller, Andrew J., director, department of legislation, American Federa-
tion of Labor-Congress of Industrial Organizations:
Policy resolution 1015
Letter to Chairman Mills 2003
Birkhead Frank. Jr., manager, McAllen (Tex.) Industrial Board,
statement 3293
Bishop, Mars J., president, Association of Yarn Distributors, letter dated
May 22, 1970, to John M. Martin, Jr.. chief counsel, Committee on Ways
and Means 1596
Boecklin, George E.. president. National Coffee Association, letter, dated
May 13. 1970. to Chairman Mills, with attachment 3960
Borsum, Leslie C., sales manager, feed sales division, Kellogg Co.,
statement ~18S
Boss Manufacturing Co., Kurt Schaffer. vice president-administration,
statement 3308
PAGENO="0027"
XXVII
Bourbon Institute, V. Adm. William J. Marshall, U.S.N. (ret.), president, Page
statement 2811
Brennan, Joseph P., director of research, and marketing, United Mine
Workers of America, statement 2366
Briggs, Porter, executive secretary, Catfish Farmers of America, statement 3898
Brock, Hon. W. E., a Representative in Congress from the State of Ten-
nessee, letter, dated June 17, 1970, to Chairman Mills 3619
Brownsville (Texas), Port of, Al Cisneros, general manager and port di-
rector, letter dated June 3, 1970, to Chairman Mills, with enclosure_~ 2389
Bruce, David S., chairman, Petrochem Group, statement 2362
Bruce, Harold, executive vice president, Association of Food Distributors,
Inc., statement 4338
Bruno, Vincent J., director, World Trade Department, Commerce and In-
dustry Association of New York, letter, dated May 21, 1970, to Chair-
man Mills 3292
Builders Harthvare Manufacturers Association, Clyde T. Nissen, execu-
tive director, statement 3812
Burrows, Fred W., executive vice president, International Apple Associa-
tion, Inc., letter, dated June 22, 1970, to Chairman Mills, with enclosure__ 4391
Business Equipment Manufacturers Association, John S. Voorhees, coun-
sel, statement 3237
Butler, George D., president, Electronic Industries Association, position
paper 2834
Byrne, George P., Jr., secretary, United States Wood Screw Service Bu-
reau, letter dated June 5, 1970, to Chairman Mills, with attachments~_. 3815
Bywater, William, vice president, International Union of Electrical,
Radio, & Machine Workers:
Summary and statement given before the Tariff Commission on May 5,
1970 2914
"The Developing Crisis in Electronics and Companion Industries,"
article 2908
California Council for International Trade, G. B. Levine, chairman, legis-
lative committee
Letter dated May 15, 1970, to Chairman Mills, with attachments 3292
Letter dated June 17, 1970, to Chairman Mills, with position paper~_ 2633
California Dried Fig Advisory Board, Ron Klamm, manager, statement~ 4375
California Fig Institute, Ron Klamm, managing director, statement 4375
California State Chamber of Commerce, Ernest J. Loebbecke, president,
letter of transmittal dated April 16, 1970, to Chairman Mills, with
enclosures 1701
Candle Manufacturers Association, H. H. Parker, secretary, letter, dated
May 26, 1970, to John M. Martin, Jr., chief counsel, Committee on Ways
and Means 27S5
Canners League of California, statement 4161
Card Clothing Manufacturers Association, E. A. Snape, Jr., chairn~an,
tariff committee, statement 1589
Carison, Paul, on behalf of the Welded Steel Tube Institute, statement~ 1935
Caskie, Maxwell, vice president, Reynolds Metals Co., letter dated June 26,
1970, to Chairman Mills 3831
Cast Iron Soil Pipe Institute, Wiley J. Perry, Jr., chairman, import study
committee:
Letter dated April 9, 1968, to Secretary of the Treasury Henry H.
Fowler 1816
Letter dated April 17, 1970, to Secretary of the Treasury David M.
Kennedy l81~
Catfish Farmers of America, Porter Briggs, executive secretary, statement 3898
Cement Industry Antidumping Committee, Donald Hiss, counsel:
Letter dated June 16, 1970, to Congressman Betts of Ohio 4111
Letter dated June 16, 1970, to Congressman Conable of New York 4110
Chamber of Commerce of the United States:
Ostrander, F. Taylor, speech delivered to Chamber of Commerce of
Buffalo, N.Y., May 22, 1970 1062
Statham, Robert R., taxation and finance manager, statement 2602
Cheese Importers Association of America, Inc., Martin A. Fromer, counsel,
letter dated June 3, 1970, to Chairman Mills 4221
PAGENO="0028"
XXVIII
Chemco Group, Morse G. Dial, Jr., chairman, and Petrochern Group, David Page
S. Bruce, chairman, statement 2362
Cheney Bros., Hon. Albert P. Morano, letter dated April 13, 1970, to
Chairman Mills 1614
Cherokee Products Co., Jesse G. Moore, letter dated June 1, 1970, forwarded
by Congressman Landrum of Georgia 4339
Chilton, Werner F., president, West Coast Metal Importers Associa-
tion, letter dated June 10, 1970, to Chairman Mills 1920
Christensen, John B., John R~ Christensen Associates, letter dated June 25,
1970. to the Committee on Ways and Means 2783
Chrysler Corp., Brian T. O'Keefe. assistant comptroller, letter dated May
27, 1970, to Chairman Mills 2637
Cisneros, Al, general manager and port director, Port of Brownsville
(Texas), letter dated June 3, 1970, to Chairman Mills, with enclosure__ 2389
CITC Industries, Inc., Irving W. Allerhand, statement 2171
Clayman, Jacob, administrative director, Industrial Union Department,
AFL-CIO, letter dated June 29, 1970, to Chairman Mills, with enclosures_ 1789
Cleveland, Hon. James C., a Representative in Congress from the State
of New Hampshire:
Letter dated June 11, 1970, to Chairman Mills, with attachments____ 3361
Letter dated June 26, 1970, to Chairman Mills, with attachments____ 3363
Cold Spring Granite Co., Kenneth R. Kruchten, director of marketing,
letter dated June 8, 1970, to Chairman Mills, with attachment 4154
Committee for a National Trade Policy, David J. Steinberg, secretary
and chief economist:
"Wanted for U.S. Trade Policy: A Single Baton and a Certain Trum-
pet" (speech before the Newark Rotary Club, June 2, 1970) 879
"U.S. on a Collision Course in Trade Policy," (speech before the Mil-
waukee World Trade Club, October 2, 1969) 874
Committee of Producers of Ferroafloys and Related Products, Lloyd Sym-
ington, counsel, letter dated June 26, 1970, to Chairman Mills, with state-
ment 19~2
Commerce and Industry Association of New York, Vincent J. Bruno,
director, World Trade Department, letter, dated May 21, 1970, to
Chairman Mills 3292
Conner, Doyle. commissioner. Florida Department of Agriculture and Con-
sumer Services, letter dated June 1, 1970. to Chairman Mills 4317
Conte, Hon. Silvio 0., a Representative in Congress from the State of
Massachusetts, statement 3019
Control Data Corp., Hugh P. Donaghue, assistant to the president,
statement 2990
Cook Industries, Inc., Frank A. Jones, Jr.. executive vice president-finance,
letter, dated June 8, 1970, to Chairman Mills 2643
Cooperative League of the USA, Stanley Dreyer, president, letter dated
May 14, 1970, to Chairman Mills 1728
Cordage Institute of the United States, statement 1249
Corn Refiners Association, Inc., Robert C. Liebenow, president, letter,
dated June 9, 1970, to Chairman Mills 4396
Cox. Langford & Brown, counsel, Glaverbel (USA), Inc., letter dated
June 26, 1970, to Chairman Mills 4022
Crompton Co., Inc., Howard Richmond. president, statement 1611
Crystal International Corp., David P. Houlihan, counsel, statement 4005
Cutler. Ralph H.. Jr., chairman, trade policy committee, American
Importers Association, brochure titled "Here's What's Wrong With
Import Quotas" 983
Dana Corp., R. C. McPherson, president, letter dated June 1, 1970, to
Chairman Mills, with statement 2639
Daniels, Michael P., Washington counsel:
American Importers Association, textile apparel group:
"Long-Term Textile Outlook: More" (paper) 1333
"Textiles in the Seventies," article from the Chemical and
Engineering News_ 1345
Swiss Union oi~ Commerce and Industry, statement forwarded by
Swiss Embassy through the Department of State 3622
PAGENO="0029"
XXIX
Page
Danish American Trade Council, Knud Sorensen, president, statement____ 1740
Darrow, John F., vice president, American Paper Institute, letter, dated
June 2, 1970, to Chairman Mills 2604
Davis Equipment, W. W. Hanley, controller, letter, dated June 9, 1970, to
Chairman Mills 2643
David, Joffre C., secretary-treasurer, Florida Fruit & Vegetable Associa-
tion, statement 4340
Deisler, Paul F., Jr., vice president, manufacturing, transportation and
supplies, and marketing, letter, dated June 25, 1970, to Chairman Mills,
with statement 2280
Design Products, Inc., Harry Goodman, president, letter dated May 20,
1970, to John M. Martin, Jr., chief counsel, Committee on Ways and
Means 3823
DeRan, James, general manager, Farmers Production Credit Association,
letter dated June 19, 1970 4401
DeWick, John S., vice president, FMC Corp., letter, dated June 17, 1970,
to Chairman Mills 3634
Dial, Morse G., chairman, Chemco Group, statement 2362
Domestic Manufacturers of Knotted Fish Netting and Fishing Nets,
Howard C. Johnson, statement 1597
Donaghue, Hugh P., assistant to the president, Control Data Corp.,
statement 2990
I)orn, Hon. Wm. Jennings Bryan, a Representative in Congress from the
State of South Carolina, statement 1570
Douglas, Donald W., Jr., corporate vice president for administration,
McDonnell Douglas Corp., statement 3849
Dowland, Robert E., vice president, Mitchum Co., letter, dated June 3,
1970, to Chairman Mills 2645
Dreyer, Stanley, president, Cooperative League of the USA, letter dated
May 14, 1970, to Chairman Mills 1728
E. D. Magnus & Associates, Inc., Frank G. Reinhard, president, letter,
dated May 26, 1970, to Chairman Mills 2644
E. I. du Pont de Nemours & Co., Samuel Lenher, vice president, letter
dated June 3, 1970, to Chairman Mills (w~ith enclosure) 1605
Electronic Industries Association, George D. Butler, president, position
paper 2834
Emergency Committee for American Trade:
Haggerty, Patrick E., statement 752
Townsend, Lynn, article entitled "Digest of Import Duties for Motor
Vehicles Levied by Selected Countries" 760
Evans, C. M., president, Welch Allyn, Inc., Skaneateles Falls, N.Y 3042
Evans, Hon. Daniel J., Governor, State of Washington, letter dated May
27, 1970, to Chairman Mills (with enclosure) 1696
Evaporated Milk Association, Fred J. Greiner, executive vice president,
statement 4221
Exportadora, Inc., of Illinois, W. R. Magnus, president, letter, dated June
22, 1970, to Chairman Mills 2645
Falk, Bernard H., vice president, government and membership services,
National Elecerical Manufacturers Association, letter dated June 16,
1970, to Chairman Mills, with attachments 2941
Famariss, Walter, Jr., president, American Petroleum Refiners Associa-
tion, statement 2370
Farmers Production Credit Association, Jay K. Kohler, president, and
James DeRan, general manager, letter dated June 19, 1970 4400
Farrar, Hon. Frank L., Governor, State of South Dakota, letter dated
June 1, 1970, to Chairman Mills 3730
Field, Richard M., president, Tea Association of the TJnited States of
America, Inc., letter dated June 19, 1970, to Chairman Mills. 4401
Fine & Specialty Wire Manufacturers Association, J. A. Mogle, chairman
foreign trade committee, statement 1954
First Devonshire Corp. (New York, N.Y.), Yale L. Meltzer, assistant direc-
tor of research, statement - 3637
First National Bank of Memphis, William W. Mitchell, president, letter,
dated June 10, 1970, to Chairman Mills 2646
PAGENO="0030"
xxx
Flegenheimer, Ernest, president, Michigan Sugar Co., statement, for- P~e
warded by Congressman James Harvey. of Michigan 2395
Florida Citrus Commission, Edward A. Taylor, executive director, citrus
department, letter dated May 28, 1970, to Chairman Mills 4316
Florida Citrus Mutual, Robert W. Rutledge, executive vice president,
brief in behalf of the Florida citrus grow-ers 4309
Florida Department of Agriculture & Consumer Services, Doyle Conner,
commissioner, letter, dated June 1, 1970, to Chairman Mills 4317
Florida Flow-er Association, Inc., George T. Beemer, manager, state-
ment 2800
Florida Fruit & Vegetable Association, Joifre C. David, secretary-
treasurer, statement 4340
Florida Fresh Citrus Shippers Association, W. G. Strickland, secretary-
general manager, letter dated June 3, 1970, to Robert W. Rutledge, execu-
tive vice president 4316
FMC Corp., John S. DeWick, vice president, letter, dated June 17, 1970,
to Chairman Mills 3634
Form-O-Uth Co.. Calvin Fraser, president, letter, dated June 19, 1970, to
Committee on Ways and Means 3306
Forrow, Brian D., letter dated June 16, 1970, to John M. Martin, Jr., chief
counsel, Committee on Ways and Means 1709
Fraser, Calvin, president, Form-O-Uth Co., letter, dated June 19, 1970, to
Committee on Ways and Means 3306
Fromer, Martin A., counsel, Cheese Importers Association of America, Inc.,
letter, dated June 3, 1970. to Chairman Mills 4221
Fur Dresser's Bureau of America, Arthur M. Stringari, legal counsel,
statement 3185
Furriers Joint Council of New- York. Oscar Ward, assistant manager, letter
dated June 18, 1070. to Chairman Mills, with enclosure 3107
Gasket Materials Producers Institute, Inc., Charles A. Hofmann, president,
letter, dated June 12, 1970. to John M. Martin, Jr., chief counsel, Com-
mittee on Ways and Means 2558
General Electric Co., New York, N.Y., statement 3023
General Time Corp., statement 3298
Gillen, Neal P., vice president and general manager. American Cotton Ship-
pers Association, letter, dated June 8, 1970, to Chairman Mills 2606
Gillon, J. Werner, president, Status Shoe Corp., statement 2169
Glaverbel (USA) Inc., Cox, Langford & Brown, counsel, letter dated June
26, 1970, to Chairman Mills 4022
Goodling, Hon. George A., a Representative in Congress from the State of
Pennsylvania, statement 2165
Goodman, Harry, president, Design Products, Inc., letter dated May 20,
1970, to John M. Martin, Jr., chief counsel, Committee on Ways and
Means 3823
Graff, Herbert, in behalf of Association of Fur Farm Suppliers, Inc., state-
ment 3179
Graham, Harry L., legislative representative, National Farmers Organiza-
tion, supplemental statement entitled. "The United States and the
I.G.A." 994
Greeff Fabrics, Inc., Theodore Greeff, president. letter dated June 24, 1970,
to Chairman Mills 1614
Greeff, Theodore, president, Greeff Fabrics, Inc., letter dated June 24, 1970,
to Chairman Mills 1614
Green Coffee Association of New Orleans, Trion T. Harris, president,
letter dated May 11, 1970, to Chairman Mills 3968
Greenberg, J. George, executive vice president, Associated Fur Manufac-
turers Association, Inc.. statement 3183
Greenville (Miss.) Port Commission. Milton P. Barschdorf, port director,
letter dated June 5, 1970, to Chairman Mills 2635
Greiner, Fred J.. executive vice president. Evaporated Milk Association,
statement 4221
Grospiron, A. F., president, Oil. Chemical and Atomic Workers Interna-
tional Union, statement 3626
Giilf+Westerii Industries, Inc., Victor L. Nutt. Washington counsel, le~t-
ter, dated June 15, 1970. to John M. Martin. Jr., chief counsel, Commit-
tee on Ways and Means 3295
PAGENO="0031"
XXXI
Haggerty, Patrick E., member, Emergency Committee for American Trade, Page
statement 752
Hampton, Robert N., director of marketing and international trade, Na-
tional Council of Farmer Cooperatives, statement 4269
Harris, Trion T., president, Green Coffee Association of New Orlea as, let-
ter dated May 11, 1970, to Ohairman Mills 3968
Harvey, H. A., Jr., president, Harvey Industries, Inc., statement 4072
H. Kohnstamm & Co., Inc., Paul L. Kohnstamm, pres'ident, letter dated
Ma~y 20, 1970, to Chairman Mills _ 3633
Hadley, G. L., president, National Livestock Feeders Association, state-
ment 3704
Hanley, W. W., controller, Davis Equipment, letter dated June 9, 1970,
to Chairman Mills 2643
Hanson, Orin T., manager, agricultural and world trade department,
Greater Minneapolis Chamber of Commerce, statement 3635
Hardwood Plywood Manufacturers Association, statement 3197
Harman, Roy D., Christianburg, Va., statement 3194
Harshaw Chemical Co., J. A. Zelek, vice president-general manager, pig-
ment and dye department, letter dated May 20, 1970, to the Committee
on Ways and Means 3635
Hatfield, Hon. Mark 0., a U.S. Senator from the State of Oregon, letter
dated June 26, 1970, to Chairman Mills, with attachments 3174
Henderson, David W., executive secretary, National Board of Fur Farm
Organizations, statement 3073
Hendricks, H. L., Volco, Inc., letter dated May 16, 1970, forwarded by
Congressman Graham Purcell of Texas 2177
Hills Brothers Coffee, Inc., Reuben W. Hills III, president, telegram dated
May 18, 1970, to Chairman Mills 3968
Hiss, Donald, counsel, Cement Industry Antidumping Committee:
Letter dated June 16, 1970, to Congressman Betts of Ohio 4111
Letter dated June 16, 1970, to Congressman Conable of New York___ 4110
Hoff, J. Robert, president, Ballantyne of Omaha (Nebr.), Inc., statement~ 3047
Hofmann, Charles A., president, Gasket Materials Producers Institute, Inc.,
letter dated June 12, 1970, to John M. Martin, Jr., chief counsel, Com-
mittee on Ways and Means 2558
Holmberg, Donald W., secretary, U.S/Mexico Border Cities Association,
letter dated May 25, 1970, to the Committee on Ways and Means, with
statements 3254
Hommel, E. M., president, 0. Hommel Co., letter daited May 18, 1970, to
John 1\1. Martin, Jr., chief counsel, Committee on Ways and Means 3640
Houlihan, David P., counsel, Crystal International Corp., statement 4005
Hughes, H. B., Hughesco, Inc., letter dated May 20, 1970, forwarded by
Congressman Graham Purcell of Texas 2176
Hugheaco, Inc., H. B. Hughes, letter dated May 20, 1970, forwarded by Con-
gressman Graham Purcell of Texas 2176
Hullsiek, William L., vice president, corporate development, Amana Refrig-
erator, Inc., prepared statement, submitted by Representative Schwen-
gel of Iowa 1209
Hungate, Hon. William L., a Representative in Congress from the State
of Missouri, letter dated June 23, 1970, to Chairman Mills 3731
Illinois, State of, Hon. Richard B. Ogilvie, Governor, statement 1694
Impression Fabrics Group, 3'. A. Zullivan, Jr., chairman, letter dated June
5, 1970, to John M. Martin, Jr., chief counsel, Committee on Ways and
Means 1591
Independent Petroleum Association of America, Robert E. Mead, president,
statement (submitted by Minor Jameson, executive vice president) 2289
Independent Refiners Association of America, statement 2377
Independent Zinc Alloyers Association, Richard J. Bauer, chairman of
the board, statement 4120
Industrial Union Dept., AFL-CIO, Jacob Clayman, administrative director,
letter dated June 29, 1970, to Chairman Mills, with enclosures 1789
Institute on U.S. Taxation of Foreign Income, supplemental statemenL~ 2450
International Apple Association, Inc.. Fred W. Burrows, executive vice
president, letter, dated June 22, 1970, to Chairman Mills, with enclosure 4391
PAGENO="0032"
XXXII
International Ladies' Garment Workers' Union:
Supplemental Statement preceded by letter of transmittal from Page
Stanley H. Ruttenberg 1271
Teper, Lazare, director, research department, letter dated June 8,
1970, to Chairman Mills, with statement 3218
International Molders & Allied Workers Union, Carl Studenroth, vice
president, statement 1933
International Union of Electrical, Radio, & Machine Workers, William
Bywater, vice president:
Summary and statement given before the Tariff Commission on May
12, 1970 2914
"The Developing Crisis in Electronics and Companion Industries,"
article 2908
Italian Embassy, Alberto Rossi, Commercial Minister, letter of transmittal
dated June 12, 1970, wffh memorandum, to Robert M. Beaudry, Country
Director, Department of State, forwarded by Department of State____ 1742
Italy-America Chamber of Commerce, footwear importers group, Gunter
von Conrad, counsel, brief 1064
J. B. Hargrave Naval Architects, Inc., J. B. Hargrave, president, letter
dated May 13, 1970, to John M. Martin, Jr., chief counsel, Committee on
Ways and Means 2646
John R. Christensen Associates, John R. Christensen, letter dated June 25,
1970, to the Committee on Ways and Means 2783
Johnson, Howard C. on behalf of certain domestic manufacturers of
knotted fish netting and fish nets, statement 1597
Jones, Felix C., president, United Cement, Lime & Gypsum Workers Inter-
national Union, statement 4058
Jones, Frank A., Jr., executive vice president-finance, Cook Industries,
Inc.. letter dated June 8. 1970. to Chairman Mills 2643
Jorgeson, Charles M., general manager, B. F. `Goodrich Co., textile division,
statement 1613
Kahn. Max Ti.. on l)ehnlf of woven label rn~nufacturers of the United
States of America, letter dated May 20, 1970, to John M. Martin, Jr.,
chief counsel, Committee on Ways and Means 1603
Keith, Hon. Hastings, a Representative in Congress from the State of Mas-
sachusetts,
Letter, dated June 12, 1970, to Chairman Mills 3899
Statement 2427
Kellogg Co.. Leslie C. Borsum. sales manager. feed sales division, state-
ment 3188
Klamm. Ron. managing director. California Fig Institute; manager, Cali-
fornia Dried Fig Advisory Board. statement 4375
Knowles, Hon. Warren P.. Governor, State of Wisconsin, letter dated
June 4. 1970, to Chairman Mills 3174
Kohler, Jay K., president. Farmers Production Credit Association, letter
dated June 19. 1970 4400
Kohnstamm, Paul L., president, H. Kohnstarnm & Co., Inc., letter da~ed
May 20, 1970, to Chairman Mills 3633
Korea, Republic of, memorandum dated June 9, 1970. forwarded by letter
of transmittal from the IJ.S. Department of State 1580
Kornegay, Horace R.. president. Tobacco Institute. Inc.. statement 2820
Kruchten. Kenneth R.. director of marketing. Cold Spring Granite Co..
letter dated June 8. 1970. to Chairman Mills, with attachment 4154
Kust. Leonard E.. vice president and general counsel. Westinghouse Elec-
tric Corp.. statement 2686
Leaf Tobacco Exporters Association. Inc. Malcolm B. Seawell. executive
secretary, letter dated June 11. 1970. to the Committee on Ways and
Means 2825
Leigh. Monroe. counsel. interaational policy committee. Alumninuni Asso-
ciation. statement 3827
Lenher. Samuel. vice president. E. I. du Pont de Yemours & Co., letter
dated June 3. 1970. to Chairman Mills (with eaclosure) 1605
Lennon, Hon. Alton. a Representative in Congress from the State of North
Carolina, letter dated June 17 1910, to Chairman Mills 1549
PAGENO="0033"
xxxiii:
Levine, G. B., chairman, legislative committee, California Council for In-
ternational Trade: Pam
Letter dated May 15, 1970, to Chairman Mills, with attachment 3292
Letter dated June 17, 1970, tO Chairman Mills, with attachment 2633
Liebenow, Robert C., president, Corn Refiners Association, Inc., letter
dated June 9, 1970, to Chairman Mills 4396
Loebbecke, Ernest J., president California State Chamber of Commerce,
letter of transmittal dated April 16, 1970, to Chairman Mills, with
enclosures 1701
Low, Charles H., executive committee member, National Board of Fur
Farm Organizations, statement 3078
Ludlow Corp., J. C. Mahoney, vice president, letter dated May 20, 1970, to
Chairman Mills 1611
Maestro Import Industries, Inc., Donald H. Adler, president, letter dated
May 13, 1970, to John M. Martin, Jr., chief counsel, Committee on Ways
and Means 3305
l\iagdanz, Don F., executive secretary-treasurer, National Livestock Feed-
ers Association:
"The Truth About Beef Supplies and Beef Prices," document dated
April 8, 1970 3718
"The Truth About Processed Beef Supplies and Prices," sequel to
document of April 8, 1970 3704
Magnus, W. R., president, Exportadora, Inc., of Illinois, letter, dated June
22, 1970, to Chairman Mills 2645
Mahoney, J. C., vice president, Ludlow Corp., letter dated May 20, 1970,
to Chairman Mills 1611
Mahoney, John H., senior vice president, Seaboard World Airlines, letter
dated June 11, 1970, to Chairman Mills 1729
Man-Made Fiber Producers Association, Claude Ramsey, chairman, sup-
plemental memorandum 1477
Mann, Hon. James R., a Representative in Congress from the State of
South Carolina 1577
Mann, Thomas 0., president, Automobile Manufacturers Association, Inc.,
letter dated May 20, 1970, to Chairman Mills 1728
Marks Specialties, Inc., Harry L. Marks, chairman o'f the board, statement_ 2759
Marshall, V. Adm. William J., TJ.S.N. (ret.), president, Bourbon Institute,
statement 2811
Martin, George B., Jr., member, Memphis (Penn.) Regional Export Expan-
sion Council, letter, dated June 3, 1970, to Chairman Mills 2646
Mathias, Hon. Bob, a Representative in Congress from the State of Call
fornia, letter dated June 12, 1970, to Chairman Mills, with enclosures__ 2~U -
Mattutat, F. M., president, R. B. Willson, Inc., letter dated June 15, 1970,
to John M. ~iartin, Jr., chief counsel, Committee on Ways and Means_ 425~
May, Hon. Stephen, mayor, city of Rochester, N.Y., statement 1316
Mazzocchi, Anthony, citizenship-legislative director, Oil, Chemical and
Atomic Workers International Union, AFL-CIO, statement 4151
McAllen. ((Tex.) Industrial Board, Frank Birkhead, Jr., manager,
~batement 3293
McDonnell Douglas Corp., Donald W. Douglas, Jr., corporate vice president
for administration, statement 3849
McIntyre, Hon. Thomas J., a U.S. Senator from the State of New Hamp-
shire, statement 2166
McMillan, Hon. John L., a Representative in Cnngre~s froni the State
South Carolina, statement 364~
McPherson, R. C., president, Dana Corp., letter, dated June 1, 1970, to
Chairman Mills, with attachment 2639
Mead, Robert E., president, Independent Petroleum Association of Amer-
ica, statement (submitted by Minor Jameson, executive vice president) -- 2289
Meat Importers Association, John E. Ward, chairman, statement (sub-
mitted by Donn N. Bent) 3697
Meltzer, Yale L., assistant director of research, First Devonshire Corp.
(New York, N.Y.), statement 3637
Memphis (Tenn.) Regional Export Expansion Council, George B. Martin,
Jr., member, letter, dated June 3, 1970, to Chairman Mills_ 2646
PAGENO="0034"
XXXIV
Mercker, A. E., executive secretary, Vegetable Growers Association of Page
America, statement 4390
Metal Masters of Baltimore, Md., H. M. Weiss, president, extension of
remarks 1919
Michigan Sugar Co., Ernest Flegenheimer, president, statement, forwarded
by Congressman James Harvey of Michigan 2395
Milwaukee Sausage Co., Seattle, Wash., Martin B. Rind, president,
statement 3732
(Greater) Minneapolis Chamber of Commerce, Orin T. Hanson, manager,
agricultural and world trade department, statement 3635
Mitchell, George F., Washington, D.C., letter dated June 13, 1970, to John
M. Martin, Jr., chief counsel, Committee on Ways and Means, with
attachments
Mitchell, William W., president, First National Bank of Memphis, letter,
dated June 10, 1970, to Chairman Mills 2646
Mitchum Co., Robert E. Dowland, vice president, letter, dated June 3, 1970,
to Chairman Mills 2645
Mitsuboshi Cutlery, New York, Inc., H. William Tanaka counsel,
statement 1957
Mogle J. A., chairman, foreign trade committee, Fine & Specialty Wire
Manufacturers' Association, statement 1954
Moore, Jesse G., on behalf of Cherokee Products Co., letter dated June 1,
1970, forwarded by Congressman Landrum of Georgia 4339
Moore, Larry, Suamico, Wis., statement 3192
Morano, Hon. Albert P., on behalf of Cheney Bros., letter dated April 13,
1970, to Chairman Mills 1614
Morss, Elliott R., Taxation With Representation, statement 2607
Morton Frozen Foods Division, ITT Continental Baking Co., George R.
Vail, president, statement 3733
National Association of Export Management Companies, Arthur A. Singer,
president:
Letter dated June 16, 1970, to Chairman Mills 2605
Letter to Chairman Mills 4415
National Association of Glue Manufacturers, Inc., W. R. O'Connor, chair-
man, tariff committee, letter, dated June 9, 1970, to John M. Martin, Jr.,
chief counsel, Committee on Ways and Means 2784
National Board of Fur Farm Organizations:
Henderson, David W., executive secretary statement 3073
Low, Charles H., executive member, statement 3078
National Building Granite Quarries Association, Inc., Kneeland Swen-
son, secretary, letter dated June 5, 1970. to John M. Martin, Jr., chief
counsel, Committee on Ways and Means 4152
National Coal Association. Brice O'Brien. vice president, letter dated June
12, 1970, to Chairman Mills, with enclosures 2327
National Coffee Association, George E. Boecklin, president, letter, dated
May 13, 1970, to Chairman Mills, with attachment 3960
National Council of Farmer Cooperatives. Robert N. Hampton, director of
marketing and international trade, statement 4269
National Council of Jewish Women. Mrs. Leonard H. Weiner, national
president, statement 1744
National Council of Music Importers. Norman R. Sackheim, president, let-
ter dated June 10, 1970, to Chairman Mills, with attachment 3048
National Electrical Manufacturers Association, Bernard H. Falk, vice pres-
ident, government and membership services, letter dated June 16, 1970,
to Chairman Mills, with attachments 2941
National Farmers Organization, Harry L. Graham, legislative represent-
ative, supplemental statement entitled "The TJnited States and the
094
National Federation of Independent Business. Edw-ard Wiinmer. vice pres-
ident, letter of transmittal dated May 20, 1970, with enclosures, to
Chairman Mills 1731
National Foreign Trade Council. Robert T. Scott, supplemental memo-
randum 2601
National Grange, John W. Scott. master, statement 4254
PAGENO="0035"
xxxv
National Livestock Feeders Association, Don F. Magdanz, executive secre-
tary-treasurer:
"The Truth About Beef Supplies and Beef Prices," document dated Page
April 8, 1970 3718
"The Truth About Processed Beef Supplies and Prices," sequel to
document of April 8,1970 3714
H'adley, G. L., president, statement 3704
National Semiconductor Corp., C. E. Sporck, president, statement 3296
National Soybean Processors Association, statement 4227
Nation-Wide Committee on Import-Export Policy, 0. B. Strackbein, pres-
ident:
Trade Balances: F.o.b. Versus C.i.f.,, paper 889
Trade Statistics-A Continuing Distortion, committee paper 892
Ness Industries, Inc., Oscar Pieper, statement 3302
New York Chamber of Commerce, Thomas N. Stainback, executive vice
president, statement 1704
Nichols, Hon. Bill, a Representative in Congress from the State of Ala-
bama, statement 1615
Nissen, Clyde T., executive director, Builders Hardware Manufacturers
Association, statement 3812
Nutt, Victor L., Washington counsel, Gulf + Western Industries, Inc.,
letter, dated June 15, 1970, to John M. Martin, Jr., chief counsel, Commit-
tee on Ways and Means 3295
North American Rockwell Corp., Robert C. Wilson, president, commercial
products group, statement 1608
Nosawa, New York, Inc., II. William Tanaka, counsel, statement 1957
0. Hommel Co., E. M. Hommel, president, letter, dated May 18, 1970, to
John M. Martin, Jr., chief counsel, Committee on Ways and Means 3640
O'Brien, Brice, vice president, National Coal Association, letter dated
June 12, 1970, to Chairman Mills, wIth enclosures 2327
O'Connor, W. R., chairman, tariff committee, National Association of Glue
Manufacturers, Inc., letter, dated June 9, 1970, to John M. Martin, Jr.,
chief counsel, Committee on Ways and Means 2784
Oddy, Charles F., secretary-treasurer, Optical Manufacturers Association,
letter dated May 20, 1970, to John M. Martin, Jr., chief counsel, Com-
mittee on Ways and Means 3041
Oil, Chemical, and Atomic Workers International Union:
Grospiron, A. F., president, statement 3626
Mazzochi, Anthony, citizenship-legislative director, statement 4151
Ogburn, Tom, president, Wilkes (N.C.) Chamber of Commerce, letter of
transmittal dated May 11, 1970, to Chairman Mills, with statement 1710
Ogilvie, Hon. Richard B., Governor, State of Illinois, statement 1694
O'Keefe, Brian T., assistant comptroller, Chrysler Corp., letter, dated
May 27, 1970, to Chairman Mills 2637
Olsen, Hon. Arnold, a Representative in Congress from the State of Mon-
tana, letters, dated May 15 and 22, 1970, with attachments, to Chairman
Mifls 3177, 3178
Olson, Iver M., vice president, American Footwear Manufacturers Associa-
tion, letter dated June 17, 1970, to Chairman Mills, with enclosures 2036
Optical Manufacturers Association, Charles F. Oddy, secretary-treasurer,
letter dated May 20, 1970, to John M. Martin, Jr., chief counsel, Commit-
tee on Ways and Means 3041
Ostrander, F. Taylor, Chamber of Commerce of the United States, speech
delivered to Chamber of Commerce, Buffalo, N.Y., May 2, 1970 1062
Pacific Car & Foundry Co., John S. Voorhees, counsel, statement 3309
Pacific Coast Coffee Association, Jack B. Berard, president:
Letter, dated May 25, 1970, to Chairman Mills 3964
Letter, dated June 26, 1970, to Chairman Mills, with attachments___ 3964
Palmer, John D., president Tobacco Associates, Inc., statement and at-
tachment 2823
Parker, George M., international president, American Flint. Glass Workers'
Union of North America, statement 4061
Parker, H. R., secretary, Candle Manufacturers Association, letter, dated
May 26, 1970, to John M. Martin, Jr., chief counsel, Committee on Ways
and Means 2785
PAGENO="0036"
xxxv'
Patterson, Huberta M. secretary, West Virginia League, West Virginia,
Pennsylvania, Ohio & Indiana Glass Workers' Protective Leagues, Pam
statement 4072
Perry, Wiley J., Jr., chairman, import study group, Cast Iron Soil Pipe
Institute:
Letter dated April 9, 1968, to Secretary of the Treasury Henry H.
Fowler 1816
Letter dated April 17, 1970, to Secretary of the Treasury David M.
Kennedy 1818
Petrochem Group, David S. Bruce, chairman, and Chemco Group, Morse
G. Dial, Jr., chairman, statement 2362
Philadelphia Textile Association, Robert B. Putney, Jr., president, letter
dated May 27, 1970, to Committee on Ways and Means 1603
Philbin, Hon. Philip J., a Representative in Congress from the State of
Massachusetts, letter, dated June 9, 1970, to Chairman Mills 3177
Pieper, Oscar, Ness Industries, Inc., statement 3302
Pin, Clip and Fastener Association, Straight Pin and Safety Pin Divi-
sions, Myron Solter, Counsel, statement 3873
Piquet, Dr. Howard S., Washington, D.C., article entitled, Trends in Inter-
national Trade of the United States 2686
Pressure Products Industries, Robert J. Senn, sales manager, letter, dated
May 22, 1970, to John Martin, Jr., chief counsel, Committee on Ways
and Means 2559
Putney, Robert B., Jr., president, Philadelphia Textile Association, letter
dated May 27, 1970, to Committee on Ways and Means 1603
Quillen, Hon. James H., a Representative in Congress from the State of
Tennessee, letter, dated June 15, 1970, to Chairman Mills 3620
R. B. Willson, Inc., F. H. Mattutat, president, letter dated June 15, 1970,
to John M. Martin, Jr., chief counsel, committee on Ways and Means__ 4252
Ramsey, Claude, chairman, Man-Made Fiber Producers Association, sup-
plernental memorandum 1477
Reading, Pa., city of, Hon. R. H. Yarnell, mayor, resolution re American
selling price 3640
Reese, R. S., chairman pro tern., U.S. Earthenware Dinnerw~re Emer-
gency Committee, statement 4086
Reimann, Bernard, president, Tie Fabrics Importers' Association 1548
Reinhard, Frank G., president, E. D. Magnus & Associates, Inc., letter,
dated May 26, 1970, to Chairman Mills 2644
Reynolds Metals Co., Maxwell Caskie, vice president, letter dated June 26,
1970, to Chairman Mills 3831
Richmond, Howard, president, Crompton Co., Inc., statement.. 1611
Rind, Martin B., president, Milwaukee Sausage Co., Seattle, Wash., state-
ment 3732
Roberts, Howard E., president, Auto Air Accessories, Inc., letter, dated
June 9, 1970, to Chairman Mills 2644
Robison, Hon. Howard W., a Representative in Congress from the State of
New York, statement 2167
Rochester (N.Y.), City of, Hon. Stephen May, mayor, statement 1316
Ross, Mrs. Jean, chairman, legislative program committee, American As-
sociation of University Women, statement 1746
Ross, W. J., comanager, Ross-Wells, statement 3191
Rossi, Alberto, Commercial Minister, Italian Embassy, letter of transmit-
tal dated June 12, 1970, with memorandum, to Robert M. Beaudry, coun-
try director, Department of State, forwarded by Department of State_._ 1742
Rutledge, Robert W., executive vice president, Florida Citrus Mutual, brief
in behalf of the Florida citrus growers 4309
Ruttenberg, Stanley H., president, Stanley H. Ruttenberg & Associates,
Inc., letter of transmittal to Chairman Mills, dated June 16, 1970, for-
warding supplemental statement of Amalgamated Clothing Workers
Union of ArneriOa and the International Ladies Garment Workers
Union 1271
Sackheim, Norman R., president, National Council of Music Importers, let-
ter dated June 10, 1970, to Chairman Mills, with attachment 3048
Saylor, Hon. John P., a Representative in Congress from the State of Penn-
sylvania, statement 1574
PAGENO="0037"
XXXVII
Schachter, Leon B., vice president and director, Washington office, Amal- Page
gamated Meat Cutters and Butcher Workmen (AFL-CIO), statement__ 3961
Schaffer, Kurt, vice president-administration, Boss Manufacturing Co.,
statement 3308
Scales, Harold, editor and publisher, American Fur Breeder, statement~ 3181
Sehutt, Mrs. William E., Clarksville, Va., letter forwarded by Hon. W. C.
"Dan" Daniel 4414
Schiffli Lace & Embroidery Manufacturers Association, I. Leonard Seiler,
executive director, statement 1582
Scott, John W., master, National Grange, statement 4254
Scott, Robert T., National Foreign Trade Council, supplement memoran-
dum 2601
Seaboard World Airlines, John H. Mahoney, senior vice president, letter
dated June 11, 1970, to Chairman Mills 1729
Seawell, Malcolm B., executive secretary, Leaf Tobacco Exporters Associa-
tion, Inc., letter, dated June 11, 1970, to the Committee on Ways and
Means 2825
Seiler, I. Leonard, executive director, Schiffli Lace & Embroidery Manufac-
turers Association, statement 1582
Senn, Robert J., sales manager, Pressure Products Industries, letter, dated
May 22, 1970, to John Martin, Jr., chief counsel, Committee on Ways and
Means 2559
Shapiro Bros. Shoe Co., Inc., Arthur N. Shapiro, letter dated May 22,
1970, forwarded by Congressman William D. Hathaway of Maine 2168
Shell Oil Co., Paul F. Deisler, Jr., vice president, manufacturing, transpor-
tation and supplies, and marketing, letter, dated June 25, 1970, to
Chairman Mills, with statement 2280
Sherwin Williams Chemicals, division of the Sherwin-Williams Co., G. L.
Tickner. eastern sales manager, statement 3632
Shostak, S. Richard, Los Angeles, Calif., article, "United States Textile
Articles Assembled Abroad Should be Excepted from Quotas" 3312
Sikes, Hon. Robert F. L., a Representative in Congress from the State of
Florida. two statements:
H.R. 15052 1568
Textiles 1569
Singer, Arthur A., president, National Association of Export Management
Companies:
Letter dated June 16, 1970, to Chairman Mills 2605
Letter to Chairman Mills 4415
Sisk, Hon. B. F., a Representative in Congress from the State of California,
letter, dated May 25. 1970. to Chairman Mills 4390
Siverd, C. D., president and chief executive officer, American Cyanamid
Co., statement 3630
Smith, Hon. Preston. Governor of the State of Texas, prepared statement
submitted by Congressman George H. Mahon of Texas 2181
Snape, E. A., Jr., chairman, tariff committee, Card Clothing Manufacturers
Association, statement 1589
Solter, Myron, Counsel, Pin, Clip and Fastener Association, Straight Pin
and Safety Pin Divisions, statement 3873
Sorensen, Knud, president, Danish American Trade Council, statemenL~ 1740
South Dakota. State of, Hon. Frank L. Farrar, Governor, letter dated
June 1, 1970, to Chairman Mills 3730
Spain-United States Chamber of Commerce, Inc., Mariano Baguena, execu-
tive secretary, statement 1736
Sporck, C. E., president, National Semiconductor Corp., statement 3296
Sporting Arms and Ammunition 1\Ianufaeturers Instithte. Robert C. Zim-
iner, counsel, statement 2786
Stainback, Thomas N.. executive vice president, New York Chamber of
Commerce, statement 1704
Standard Parts Co. of Houston. A. C. Tabbert, vice president, letter, dated
June 8, 1970, to Chairman Mills 2643
Statliam, Robert R.. taxation and finance manager. Chamber of Commerce
of the United States, statemenL - 2602
Status Shoe Corp., J. Werner Gillon, president, statement 2169
PAGENO="0038"
xxxvm
Steinberg, David J., secretary and chief economist, Committee for a Na-
tional Trade Policy:
Wanted for U.S. Trade Policy: A single Baton and a Certain Trumpet Page
(speech before Newark Rotary Club, June 2, 1970) 879
U.S. on a Collision Course in Trade Policy (speech before the Milwau-
kee World Trade Club, Oct. 2, 1969) 874
Stevens, Robert Warren, associate professor of international business,
Graduate School of Business Administration, Indiana University, state-
ment 1747
Stewart, Eugene L., general counsel, Trade Relations Council of the United
States, letter dated June 19, 1970, to Chairman Mills 3673
Stitt, Nelson A., director, United States-Japan Trade Council:
Testimony 1060, 1127
Membership list 1131
Registration statement filed with Department of Justice, pursuant to
Foreign Agents Registration Act of 1938 1143
Statement of Congressman John W. Byrnes (Wis.), a Member of the
Committee on Ways and Means, with reference to testimony of Mr.
Stitt 1120
Interrogation by Congressman John W. Byrnes (Wis.) of Mr. Stitt~_ 1155
"A Comparison of Trade and Economic Data" (pamphlet) 1118
"How Much Would Textile Quotas Cost the United States" (pam-
phlet) 1085
Letter, dated~May 26, 1970, to Chairman Mills 1110
Invitation to membership 1161
Stokely-Van Camp, Inc., Alfred J. Stokely, president, letter, dated June 15,
1970, to John M. Martin, Jr., chief counsel, Committee on Ways and
Means
Strackbein, 0. B., president, Nation-Wide Committee on Import-Export
Policy:
Trade Balance: F.o.b. Versus C.i.f., paper 889
Trade Statistics-A Continuing Distortion, committee paper 892
Strickland, W. G., secretary-general manager, Florida Fresh Citrus Ship-
pers Association, letter dated June 3, 1970, to Robert W. Rutledge, ex-
ecutive vice president, Florida Citrus Mutual 4316
Stringari, Arthur M., legal counsel, Fur Dresser's Bureau of America,
statement 3185
Struning, William C., (Pan-American Coffee Bureau) New York, N.Y.,
letter, dated May 28, 1970, to Chairman Mills, with attachments 3900
Studenroth, Carl, vice president, International Molders & Allied Workers
Union, statement 1933
Sullivan J. A., Jr., chairman, Impression Fabrics Group, letter dated
June 5, 1970, to John M. Martin, Jr., chief counsel, Committee on Ways
and Means 1591
Swenson, Kneeland, secretary, National Building Granite Quarries As-
sociation, Inc., letter dated June 5, 1970, to John M. Martin, Jr., chief
counsel, Committee on Ways and Means 4152
Swiss Union of Commerce and Industry, Michael P. Daniels, Washington
counsel, statement, forwarded by Swiss Embassy through Department
of State 3622
Symington. Lloyd, counsel, Committee of Producers of Ferroalloys and
Related Products, letter dated June 26, 1970, to Chairman Mills, with
statement 1922
Tabbert, A. C., vice president, Standard Parts Co. of Houston, letter, dated
June 8, 1970, to Chairman Mills 2043
Tanaka, H. William, counsel:
Ajinomoto Co. of New York, Inc.. statement 3621
Mitsuboshi Cutlery, New York, Inc., statement 1957
Nosawa, New York, Inc., statement 1957
Toshiba America, Inc., statement 3035
Taxation With Representation, Elliott R. Morss. statement 2607
Taylor, Edward A., executive director, citrus department, Florida Citrus
Commission, letter dated May 28, 1970, to Chairman Mills 4316
Taylor, Walter, Stafford Springs, Conn., statement 3189
PAGENO="0039"
XXXIX
Tea Association of the United States of America, Inc., Richard M. Field, Pam
president, letter dated June 19, 1970, to Chairman Mills 4401
Teper, Lazare, director, research department, International Ladies' Gar-
ment Workers' Union, letter, dated June 8, 1970, to chairman Mills,
with statement 3218
Texas, State of, Hon. Preston Smith, Governor, prepared statement sub-
mitted by Congressman George H. Mahon of Texas 2181
Thompson, William P., stated clerk, United Presbyterian Church in the
United States of America, statement 1744
Tickner, G. L., eastern sales manager, Sherwin Williams Chemicals, Divi-
sion of the Sherwin-Williams Co., statement 3632
Tie Fabrics Importers' Association, Bernard Reimann, president,
statement 1548
Tobacco Associates, Inc., John D. Palmer, president, statement and
attachment 2823
Tobacco Institute, Inc., Horace R. Kornegay, president, statement 2820
Townsend, Lynn, on behalf of the Emergency Committee for American
Trade, article entitled "Digest of Import Duties for Motor Vehicles
Levied by Selected Countries" 760
Toby Berman Corp., A. T. Berman, letter dated May 20, 1970, to John M.
Martin, Jr., chief counsel, Committee on Ways and Means 1568
Tool & Stainless Steel Industry Committee, statement 1774
Toshiba America, Inc., H. William Tanaka, counsel 3035
Tozzoli, Guy F., secretary General, World Trade Centers Association,
statement 1700
Trade Relations Council of the United States, Eugene L. Stewart, general
counsel, letter dated June 19, 1970, to Chairman Mills 3673
Trigg, Eric A., president, Alcan Aluminum Corp., statement 3831
Union Carbide Corp.,~ F. Perry Wilson, president, letter to Chairman
Mills, with attachment 2646
United Automobile, Aerospace & Agricultural Implement Workers of
America (UAW), Leonard Woodcock, president, statement with attach-
ments 1711
United Cement, Lime & Gypsum Workers International Union, Felix C.
Jones, president, statement_~ 4058
United Mine Workers of America, Joseph P. Brennan, director of research
and marketing, statement 2366
United Presbyterian Church in the United States of America, William P.
Thompson, stated clerk, statement 1744
United States-Japan Trade Council, Nelson A. Stitt, director:
Testimony 1066, 1127
Membership list 1131
Registration statement filed with Department of Justice, pursuant
to Foreign Agents Registration Act of 1938 1143
Statement of Congressman John W. Byrnes (Wis.), a Member of the
Committee on Ways and Means, with reference to testimony of
Mr. Stitt 1126
Interrogation by Congressman John W. Byrnes (Wis.) of Mr. Stitt~ 1155
"A Comparison of Trade and Economic Data" (pamphlet) 1118
"How Much Would Textile Quotas Cost the United States" (pam-
phlet) 1185
Letter, dated May 26, 1970, to Chairman Mills 1110
Invitation to membership 1161
U.S. Wood Screw Service Bureau, George P. Byrne, Jr. secretary, letter
dated June 5, 1970, to Chairman Mills, with attachments 3815
Upholstery & Decorative Fabrics Association of America, Peter C. Apel,
president, letter dated June 23, 1970, to Chairman Mills 1603
U.S. Earthenware Dinnerware Emergency Committee, R. S. Reese, chair-
man pro tem, statement 4066
United States-Mexico Border Cities Association, Donald W. Holmberg,
secretary, letter dated May 25, 1970, to the Committee on Ways and
Means, with statements 3254
Vail, George R., president, Morton Frozen Foods Division, ITT Continental
Baking Co., Inc., statement 3733
`~Tarel Manufacturing Co., Jim Walker, controller, letter to Chairman
Mills 2638
PAGENO="0040"
XL
Vegetable Growers Association of America, A. E. Mercker, executive secre- Page
tary, statement
Volco Inc., H. L. Hendricks, president, letter dated May 16, 1970, for-
warded by Congressman Graham Purcell of Texas 2177
Volun~e Footwear Retailers of America, Edward Atkins, executive vice
president, supplementary statement 2088
Voorhees, John S., counsel:
Business Equipment Manufacturers Association 3237
Pacific Car & Foundry Co., statement 3309
Wralker, Jim, controller, Varel Manufacturing Co., letter to Chairman
Mills 2638
Ward, John E., chairman, Meat Importers Association, statement (sub-
mitted by Donn E. Bent) 3697
Ward, Oscar, assistant-manager, Furriers Joint Council of New York, let-
ter dated June 18, 1970, to Chairman Mills, with enclosure 3167
Washington, State of, Hon. Daniel J. Evans, Governor, letter dated May
27, 1970, to Chairman Mills (with enclosure) 1696
Weiner, Mrs. Leonard H. national president, National Council of Jewish
Women, statement 1744
Weiss, H. M., president, Metal Masters of Baltimore, Md., extension of
remarks 1919
Welch Allyn, Inc., C. M. Evans, president, Skaneateles Falls, New York,
letter 3042
Welded Steel Tube Institute, statement submitted by Paul Carlson 1935
West Coast Metal Importers Association, Werner F. Chilton, president,
letter dated June 10, 1970, to Chairman Mills 1920
`~Vest Virginia, Pennsylvania, Ohio, & Indiana Glass Workers' Protective
Leagues, Huberta M. Patterson, secretary, Wrest `~nirginia League,
statement 4072
Western Oil & Gas Association, statement 2278
Westinghouse Electric Corp., Leonard E. Kust, vice president and general
tax counsel, statement 2636
Wilkes (North Carolina) Chamber of Commerce, Tom Ogburn, president,
letter of transmittal dated May 11, 1970, to Chairman Mills, with
statement 1710
Wilson, F. Perry, president, Union Carbide Corp., letter to Chairman
Mills, with attachment 2646
Wilson, Robert C., president, commercial products group, North American
Rockwell Corp., statement 1608
Wimmer, Edward, vice president, National Federation of Independent
Business, letter of transmittal dated May 20, 1970, with enclosures, to
Chairman Mills 1731
Window Glass Cutters League of America, Harry W. Baughman, inter-
national president 4063
Winters, Elmer C., acting chairman, Wyoming-Nebraska Regional Export
Expansion Council, letter, dated June 9, 1970, to Chairman Mills 2633
Wisconsin, State of. Hon. Warren P. Knowles, Governor, letter dated
June 4, 1970, to Chairman Mills 3174
Woodcock, Leonard, president, United Automobile, Aerospace & Agricul-
tural Workers of America (UAW). statement with attachments 1711
World Trade Centers Association, Guy F. Tozzoli, secretary general,
statement 1700
Woven Label Manufacturers of the United States of America, Max L.
Kahn, letter dated May 20, 1970, to John M. Martin, chief counsel,
Committee on Ways and Means 1603
Wyoming-Western Nebraska Regional Export Expansion Council, Elmer
C. Winters, acting chairman, letter, dated June 9, 1970, to Chairman
i~Iills 2633
Zelek, J. A., vice president-general manager, pigment and dye department,
Harshaw Chemical Co., letter, dated May 20, 1970, to the Committee on
Ways and Means 3635
Zimmer, Robert C., counsel, Sporting Arms and Ammunition Manufac-
turers Institute, statement 2786
PAGENO="0041"
TARIFF AND TRADE PROPOSALS
THURSDAY, rUNE 11, 1970
HOUSE OF REPRESENTATIVES,
COMMITTEE ON WAYS AND MEANS,
Wa~shington,D.C.
The committee met at 10 a.m., pursuant to notice, in the committee
room, Longworth House Office Building, Hon. Al Uliman presiding.
Mr. IJLLMAN. The committee will come to order.
Mr. BYRNES. Mr. Chairman?
Mr. ULLMAN. Mr. Byrnes.
STATEMENT OF HON. JOHN W. BYRNES, A REPRESENTATIVE IN
CONGRESS PROM THE STATE OF WISCONSIN
Mr. BYRNES. Before we proceed with the witnesses, I would like to
make a brief statement and a re4uest of the committee. It arises out
of the testimony before this committee on May 19 by a Mr. Nelson A.
Stitt on beha1f of what was called the United States-Japan Trade
Council, which he purported to represent. He advised the committee
at that time that his organization was, and I quote, "an association of
approximately 800 firms doing business in the United States and in-
terested in promoting healthy trade between the two countries."
Since then information has come to my attention that the United
States-Japan Trade Council, it would appear, is really a front for the
Japanese Embassy and the Japanese Government. The organization
did file a statement, as is required, with the Justice Department and
it showed income to the organization of $171,992 from the Japanese
Government via a circuitous route during the second half of 1969.
The only other income of this~ organization was $2,280 from its
membership dues during that period. It would appear, therefore, that
on a monetary basis, 98 percent of the testimony of the so-called United
States-Japan Trade Council was in behalf of the Japanese Govern-
ment and only 2 percent for the 800 firms.
Under these circumstances, it seems to me that the committee was
intentionally misled as to who Mr. Stilt really was appearing for on
May 19. It appears this was deceptive, and in light of this, I would
ask that Mr. Stitt's testimony on that day be stricken, at least until
this whole matter is thoroughly examined and straightened out.
I think this case also points out the great need for committee wit-
nesses to identify their principals. I think the members of the com-
mittee have a right to know whom and what these witnesses represent.
A failure to make such a disclosure is a disservice not only to the corn-
mittee, but to the American people, as well, because our hearings are
(3641)
46-127 O-70-pt. 13-3
PAGENO="0042"
3642
published as public documents and are open to all for use as primary
information sources.
It seems to me that we must preserve the integrity of these proceed-
ings. Certainly I am not suggesting that the Japanese Government,
if it desires to have somebody represent it before this committee to
express its views, has no right to do so. But as for a witness who comes
here and purports to speak for 800 businesses, and presents himself on
that basis, when in truth and in fact the organization that he appears
for is financed 98 percent by the Japanese Embassy and the Japanese
Government, that is a distortion and is misleading as far as the testi-
mony given to this committee is concerned.
If the Chair desires to do so, it is perfectly all right to hold my mo-
tion in abeyance. But I would request that the testimony given to us
under these circumstances be stricken from the record, or not appear
in the printed record, until we have a chance to examine thoroughly
the information that has been developed.
Mr. ULLMAN. Mr. Byrnes, this is an extremely serious matter. The
committee certainly is appreciative of your digging into this matter.
If the gentleman does not object, I will ask that the matter be held
ii~ abeyance and that the staff and the committee study the matter.
Mr. BYRNES. I would suggest, Mr. Chairman, that Mr. Stitt be in-
vited to appear at some convenient time before the committee if he
desires to do so, to explain this situation and respond also to any further
questions that we may have with regard to this matter and to his
testimony on the 19th.
Mr. ULLMAN. It is the policy of this committee to schedule orga-
nizations incorporated in the United States as witnesses. So, without
objection then, this matter will be held in abeyance and a study made
by the staff and the members of the committee.
[Mr. Nelson Stitt subsequently appeared before the committee at a later time
on this same day, June 11. For these proceedings, see part 4, page 1126, on
May 19, following Mr. Stitts' originally scheduled appearance. These proceedings
have been moved to that portion of the printed hearings in accordance with a
unanimous consent agreement.]
Mr. ULLMAN. Our first witness today is a very distinguished col-
league, the Chairman of the Armed Services Committee, the gentle-
man from South Carolina, my good friend, the Honorable L. Mendel
Rivers.
We are very happy to have you before the committee this morning.
STATEMENT OP HON. L. MENDEL RIVERS, A P~EPRESENTATIVE IN
CONGRESS PROM THE STATE OP SOUTH CAROLINA
Mr. Rivrns. Thank you very much, Mr. Chairman.
As I said to this great committee last year, I know that you know
more about this kind of stuff than I do, but I represent a lot of people,
just like you do, over 600,000, and whenever their economic interests
are involved I am going to holler just like you do when your economic
interests are involved.
Now, Mr. Chairman, I came here this morning primarily in the
interest of our textile industry. The textile industry is the largest
industry in South Carolina. There is not too much of it in my district,
PAGENO="0043"
3643
but, unless our textile industry in South Carolina is healthy, South
Carolina is unhealthy. This industry is vital to the survival of our
economy.
Now, let me start by saying that I have not come here to lambast
any nation in particular. I have just come here to say a word for this
country that you and I belong to.
I consider this, and this is not a good simile but it is as oood a com-
parison as I can make, to be the Pearl Harbor of our texti~Ie industry.
At this time, however, there appears to be no possibility that our sunken
hulks, the textile industry in my own case, being torpedoed by the com-
petition from Japan will ever be refloated unless you do something
about it now.
Now, we have had promises on aid from every administration. The
promises have been so wonderful that we have grown lean on them.
Japan today is engaged in a deadly competition with us. She is, like
England in the 17th century, practicing a new mercantilism that has
the same effect on us that it did at that time. At stake is the very
life of this country as an industrial nation.
What I am saying today applies to textiles. You are the very next on
the list, Mr. Betts, your steel mills in Ohio, as sure `as you are a
foot high.
Now, how long can we gorge ourselves on cheap imports while we
starve our own industries of theirvery substance?
Let me say this: Do not let anybody kid you that these Japanese
goods are not good quality. Take the electronics, take those auto-
mobiles, take these ships, take the steel that is coming in. That is not
second class. They work long hours. They produce good stuff. The only
way you are going to protect your country is by law, law enacted by
this Congress. Don't leave it to the State Department.
I, for one, cannot believe that `all these signs hanging around your
necks and mine don't mean something to us. We are going out of busi-
ness, and fast. The Mills bill is the only thing that is going to save us,
the Mills-Rivers bill, if you please, and it is a good bill. I want to
say this, Mr. Chairman, it is in that order, too.
This `bill applies the law to anybody who has not agreed to limit
his exports to this country. Let us set the law and the quotas. We have
much more at stake than does someone who is on the Federal payroll
down in the State Department who looks up so much he can't see the
ground on which he walks.
Now, our textile and apparel industries are among our oldest, from
the hand looms of the colonial times to the giant mills and the factories
of today.
I worked in a textile mill. I know something about them. They have
automatic looms today; one man can watch 30 or 40 of them. We have
the most automa'ted industry on earth, trying our best to survive.
If anybody knows something about the textile industry, it is Mendel
Rivers, because I worked in them. I don't know what contribution I
made but I worked 11 hours a day. I understand they don't work that
long these days.
The workers in these plants are fine people. They have a fine life to
live. Their wages are good. Our wOrkers in America have the highest
standard of living of any workers on earth, and you know it. Get out
PAGENO="0044"
3644
on the highway any weekend and see how many of our employees are
out with their trailers on the back and motorcycles on the `back of the
trailer headed for the mountains of South Carolina, often with the
trailers carrying boats.
They go out to get recreation starting Friday evening, your Ameri-
can workers. All they want is a chance to survive. I want to save them.
God bless them.
You, Mr. Schneebeli, are the one who can help them survive because
you and I together have to put some law on the books. Do not take the
word of the people downtown. I don't care who the administration is.
Now, the workers in these plants have taken care of us in wartime.
They have worked long hours. Roosevelt called them the arsenal of
democracy. Now it is our turn to take care of them and this kind of
competition. They have kept the faith with this country when other
people have not in other lands.
We have a lot of allies but sometimes I think they are dependents.
They give us lipservice. How many came to our aid in Korea?
How many came to our aid in Vietnam?
Now our industry is all we have left, the free enterprise system, as
I understand it.
Now, we have tried our darndest to solve this thing through inter-
national negotiations time and time again. Mr. Mills is the only Mem-
ber in this room today who has been in this Congress longer than I
have. He has seen the negotiations. He knows what he is doing when he
puts this bill in the hopper. He has seen the. diplomatic course tried.
And it has not worked. We have met with negative replies time and
time again.
Now Japan leads the world in textile exports, while our industry
continues to go down. In South Carolina this year already we have
closed a dozen textile mills. Unless our industry is to go the way of
the passenger pigeon we must take action now; otherwise we might just
as well-listen to this-we may just as well make it mandatory that
our children take a course in Japanese so that they can get a job in
Japan when you and I are gone, so that they can eat. There won't
be any American industry.
Now, I cannot speak for all the States represented by you distin-
guished gentlemen. You know what you have and you know how you
are affected. But I can speak for my country. If we do not act to pre-
serve this industry, many places will suffer depression, and you haven't
seen anything yet. There are members of this committee who know
what happens when an industry or an important installation leaves his
district. I do not need to tell you.
Today it is textiles; tomorrow what is it going to be? Will it be
Jim Burke's shoes? I suspect that he feels his shoe industry disap-
pearing from New England. Ten years from now, every suit you
wear could well be made in Japan. Five years from now, every shirt
might well be a Japanese import.
It may be that you have seen the last American-made towel or
American-made washcloth. Let me show you what I am talking about.
The other day, Mr. Chairman, one of our textile manufacturers
showed me a printed towel he had just gotten out of his mill and put
on the market in New York, just gotten it out. But then in a short
time, the identical thing came from a Japanese mill or some mill in
PAGENO="0045"
3645
Hong Kong, the identical towel, only that the dimensions were just a
little shorter.
Of course, to the unknowing layman public, they thought they were
getting the same thing. It was identical. This is what happens. And it
is quality merchandise.
Now, after the Japanese have successfully put the American tex-
tile industry out of business, they will turn to rugs, building materials;
you name it. Already they are No. 2 in the world in automobiles. Look
on the street and see how many Toyotas and Datsuns you see. And
they are quality, not junk. They have replaced Germany as No. 2 in the
automobile business.
Now, are we going to continue to bury our head in the sand? Let
us do it knowing these things. It may well be in the next few years
the largest single industry in the United States will be gone and the
people on this committee from Michigan had better remember that.
And they may come here pleading to save the automobile industry.
You know who ought to be sitting where I am this morning or
following me? The head of the UAW. Brother, he is next on the list.
Don't let anybody kid you.
Now, we are not asking you to give us preference in my part of the
world. All I am asking you is the simple route to survive for my
people.
Now, I am in the military business. I know what we do in the mili-
tary. We have to have four-ply muslin cotton for our military forces
in Vietnam. I had one textile man go to DOD-and you can't buy this;
they don't make it-he offered to~ put up a mill for the Department
of Defense at no cost. And all the four-ply muslin cloth they make
for the cotton goods these boys wear in jungles is essentially made
by your textile industry.
They are making a contribution to the war effort. This industry is
loaded with patriotism. They should not get the treatment that they
are getting. Don't you think just because it is happening to the textile
industry that it won't happen to the automobile industry and the rest
of the industries in this country.
Now, the wage differential in Japan and these other places is well-
known. As I said, I am proud that we have the highest standard of
living, but it must `be considered that our competitors are able to en-
gage in practices that are prohibited to this nation by law. The mini-
mum wage, the antimonopoly, the~ antitrust laws, and a number of
things of this character that they don't have in their countries. We
are just not matched equally. Then when you give them the right to
come over here and load our markets, our firms can't compete.
I am not using Japan as a whipping boy. I went down to the
White House, I think with the chairman, some time ago, when the
President announced the return of Okinawa to Japan. I got the im-
pression that-I can't quote the President; he quotes himself; he has
enough troubles without my misquoting him; I want to help him-
but I got the impression then that he had some kind of understand-
ing on some of this competition.
But, whether he has or not, my business is in the Congress and so
is your and the greatest business you can have, Mr. Chairman, this
morning, is to address yourselves to the salvation of these basic
industries.
Now, I think Secretary Stans has done a fine jab, Mr. Chairman,
PAGENO="0046"
3646
but I do not think that he can get by some of the deeply entrenched
crowd in other parts .of this Government.
Take the electronics business. If we depend on Japan for electronics,
and they are good, where are you going to get your spare parts in time
of trouble? We only export about three things in this country that
we get currency balance on. Did you know this? One of them is com-
puters, another is airplanes, and the third is agricultural products.
Most of the other stuff we don't make any money on.
We make money on airplanes and, Mr. Pettis, you are a licensed
pilot; you know what I am talking about. When you sell a 707 or 741
to Great Britain, you sell spare parts and they have to come back
and get them. If they want anybody over there you send somebody;
you get the Americans over there; you get the American policy to
these people.
Just like South America. If we sell them our fighters against the
French Mirages~ we send them our technicians and we implement
our diplomacy. It is the same way with Japan. Now, if we depend
on them for so many things, our industry is gone. We'will have to go
there to get them.
Mr. Chairman, I won't take any more of your time. I am just warm-
ing over the coffee you have been drinking up here for a number of
weeks. I am just telling you I know a little something about what I
am talking about.
Yours is the most realistic approach I have seen. I am honored that
you let me be one of the co-authors to be right along with your mag-
nificent train, just to be in your wake helps me where I come from.
I am glad to be in this country.
I know this, Mr. Chairman, if I read you, you are going to do some-
thing about this. I just want to let you know that I come here with
this in mind.
This distinguished committee, I want to thank you. You have been
much kinder to me than I deserve and I want to thank you.
The CHAIRMAN. Mr. Rivers, I want to congratulate you for making
this very fine statement, taking time from your very busy schedule
to share your thoughts with us. We appreciate your doing it very*
much. You have been very helpful to us.
Any questions?
Mr. GILBERT. Mr. Chairman.
The CHAIRMAN. Mr. Gilbert.
Mr. GILBERT. I would like to compliment the distingui~hed chair-
man of the Armed Services Committee for the contribution he has
made here this morning.
You mentioned that the United Auto Workers Union should come
out and support this. You might know some of our great labor leaders
are in support of this legislation.
Mr. RIVERS. Of course, they are.
Mr. GILBERT. And particu'larly in the garment and textile indus-
tries, they are all four-square behind the position that you have )ust
espoused here.
Mr. Rivr~s. You take the garment industry, it came from New
York, look at the contribution they made, look what Dubinsky did
for the working people of this country. We can't see these people sink;
they have a right to be protected in your great city of New York and
PAGENO="0047"
3647
great State of New York. You know what I am talking about. The
automobile industry is next. This is vital legislation.
Mr. GILBERT. It certainly is.
Mr. RIVERS. Japan is going to rule Asia; we can't stop that. We at
least can save this country.
Mr. GILBERT. Thank you.
The CHAIRMAN. Are there any further questions?
If not, we thank you again, Mr. Rivers, for coming to the committee.
Mr. RIVERS. Thank you very much.
The `CHAIRMAN. Our next witness is our colleague from Illinois,
Mr. Pucinski.
STATEMENT OP EON. ROMAN C. PUCINSKI, A REPRESENTATIVE IN
CONGRESS PROM THE STATE OP ILLINOIS
Mr. PUCINSKI. Thank you, Mr. Chairman, for allowing me to ap-
pear before your committee this morning.
I appear before you today to urge favorable action on H.R. 16920,
for I firmly believe that prompt action is imperative with respect to
the import problems of the apparel-textile-shoe industries which are
covered by this proposed legislation.
It is because of this that I felt it my duty to join in co-sponsoring
this bill.
I was guided in my decision-as I earnestly hope you will be in
yours-by several incontrovertible facts.
It is a fact that, with respect to the covered industries, the degree
of penetration of domestic markets by imports from low-wage coun-
tries has been increasing both steadily and substantially. At the outset
of the 1960's, for example, the value of apparel imports amounted to
well under 10 percent of the value of domestic production. The esti-
mate for last year is in excess of 22 percent.
It is a fact that these imports are produced under substandard con-
dit~.ions-but with a technology that generally matches that which is
available to United States producers. As a result, the competitive ad-
vantage that is enjoyed by foreign manufacturers stems mainly from
the pitifully low wages they pay. `,
Average hourly earnings in the apparel industry in the United
States, for instance, were $2.31 in 1969. Except for Canada, where the
corresponding figure was $1.75, in no other country with which we
do any amount of trading did workers in this industry receive as
much as $1 per hour. In Japan, for example, apparel workers averaged
40 cents per hour in 1969, while in Hong Kong the figure was about
25 cents.
This is exactly the kind of situation that Congress felt represented
"an unfair method of competition" and prompted the adoption of
the Fair Labor Standards Act-to prohibit such competition. It is
illogical to give foreign producers an advantage that the act has de-
nied to domestic producers.
It is yet another fact that this unfair competition has been destroy-
ing job and income opportunities for American workers. And the
type of workers. most affected are those who generally have fewer
job options, such as women, workers without advanced skills, and
minorities.
PAGENO="0048"
3648
For example, women hold fewer than 30 percent of the jobs in all
manufacturing combined, but in apparel they comprise 80 percent
of the work force, and in textiles more than 45 percent.
Moreover, about 45 percent of the workers in all manufacturing are
classified as semiskilled, but in textile the figure is 70 percent and in
apparel 80 percent.
With respect to employment of minorities, data from the Equal Em-
ployment Opportunity Commission has disclosed that over 18 percent
of those employed in the apparel industry in the Chicago area are
Negroes and an additional 9 percent have Spanish surnames.
Given these facts, I find it impossible to view with equanimity the
prospect of further job destruction caused by the unfair competition
of imports from low-wage countries. In the last year alone, data pro-
vided by the Illinois Department of Labor disclose how serious the
erosion of jobs has been in the Chicago area.
Between March 1969 and March 1970, employment in manufactur-
ing in the Chicago SMSA declined by about 9,000, while in the non-
durable goods sector it remained stable. However, in apparel, which is
a part of the nondurable sector, employment was off by 1,400-or from
25,700 in March of 1969 to 24,300 in March of 1970.
In textile and shoe manufacturing, which are also part of the non-
durable goods sector but which provide fewer jobs in the Chicago
area than does apparel, employment was also down-from 2,200 to
2,000 in leather footwear, and from 3,300 to 3,000 in textiles.
These are but a few of the facts that clearly establish the adverse im-
pact from imports that guided me in my decision to cosponsor 16920.
I would make one other point.
H.R. 16920 is not a protectionist device. It would, in fact, permit
foreign nations to share in whatever growth this country experiences
in the consumption of products covered by the bill.
H.R. 16920 is an instrument to promote orderly marketing arrange-
ments and, as such, will serve the interests of those concerned with
the need to expand world trade.
The CHAIRMAN. Thank you, Mr. Pucinski, for coming before this
committee and giving us the benefit of your views.
Are there any questions?
If not, again we thank you.
Mr. PucINsKI. Thank you, Mr. Chairman.
(The following statement was received for the record:)
STATEMENT OF HON. Jouw L. MOMILLAN, A REPRESENTATIVE IN CONGRESS FRo~r
THE STATE OF SOUTH CAROLINA
Mr. Chairman and members of the House Ways and Means Committee, I want
to join my colleagues from South Carolina and Chairman Mills in supporting
the textile import quota bill now being considered by your committee. During
the past 10 years I have introduced several bills for this purpose, however, we
have always been persuaded to give the executive department an opportunity
to adjust this problem without legislation. I believe the executive department
has exhausted its efforts to curb textile imports from cheap labor countries and
this leaves the problem squarely on the shoulders of the Members of Congress.
I want to reiterate the words expressed by the South Carolina Lieutenant
Governor and the other Members of the South Carolina congressional delegation
in support of this bill. I will not try to clutter up the hearing record by dupli-
cating these statements as we have a solid front in support of this legislation
which will, in my opinion, save the jobs of thousands of textile workers in
South Carolina alone.
PAGENO="0049"
3649
The CHAIRMAN. Our next witness is Mr. Eugene Stewart.
Please come forward, if you will.
Although we know you quite well, if you will identify yourself for
the record, we will be glad to recOgnize you.
STATEMENT OP EUGENE L. STEWART, GENERAL COUNSEL, TRADE
RELATIONS COUNCIL OP THE UNITED STATES, INC.; ACCOMPA-
NIED BY JAMES M. ASHLEY, COCILAIRMAN, BOARD OP TRUSTEES;
AND RICHARD C. ROSE, PRESIDENT
Mr. STEWART. Thank you, Mr. Chairman.
I am Eugene L. Stewart, general counsel of the Trade Relations
Council.
I am accompanied this morning by James M. Ashley of Libbey-
Owens-Ford, cochairman of the board of trustees of the Council, and
Richard C. Rose of Allegheny-Ludlum Industries, president of the
Trade Relations Council.
In addition, at this table are members of the board of trustees of the
council. The board of trustees has fully considered the statement we
shall present this morning and has approved it.
We would like to proceed, Mr. Chairman.
The CHAIRMAN. We are glad to have you all with us.
Mr. STEWART. Mr. Chairman, I have a prepared statement. I shall
not read it at length. I shall give the highlights of it.
The Trade Relations Council represents manufacturing corpora-
tions and trade associations. We have 72 members. Their names will be
submitted for the record.
(The information referred to follows:)
MEMBERSHIP ROSTER OF THE TRADE RELATIONS COUNCIL
Company Address Official
Acme Shear Co 1380, Bridgeport, Conn. 06609 Henry C. Wheeler, president.
Albany Felt Co Albany. N. Y. 12204 Wdyne F. Fry, senior market analyst.
Allegheny-Ludlum Steel Corp Oliver Building, Pittsburgh, Pa. 15222 Richard C. Rose, secretary.
Alliance Manufacturing Co Alliance, Ohio 44601 John Bentia, president.
Amalgamated Sugar Corp 801 First Security Bank Building, Ogden, A. E. Benning, president.
Utah 84401.
American Fine China Guild P.O. Box 229, Nyack, N.Y Lynne A. Warren, secretary.
American Hardboard Association~. 100 W. Cold Spring Lane, Baltimore, Md. Donald Linville, consultant.
21210.
American Aniline Products, Inc_... Box 3963, Paterson, N.J. 07509 A. L. Phillips, president.
American Olean Tile Co 1000 Cannon Ave., Lansdale, Pa. 19446 William M. North, president.
American Pipe Fittings Associa. 60 East 42d St., New York, N.Y. 10017 Ray H. Goodridge, secretary-treasurer.
tion.
Antifriction Bearing Manufac- do James J. Whitsett, secretary-general
turers Association, manager.
Atkins & Pearce Manufacturing 537 East Pearl St., Cincinnati, Ohio 45202 - Asa I. Atkins, president.
Co.
Banner Mining Co Tucson, Ariz. 85703 A. B. Bowman, vice president.
Bausca & Lomb. Inc Rochester. N.Y. 14605 Joseph W. Taylor. secretary-treasurer.
Bicycle Institute of America 122 East 42d St., New York, N.Y. 10017___ John Auerbach, executive secretary.
Burlington Industries, Inc Burlington House, 1345 Avenue of the - Robert P. Lynn, vice president,
Americas, New York, N.Y. 10019. legal department.
Carlisle Tire & Rubber Division, P.O. Box 99, Carlisle, Pa. 17013 C. J. Warrell, president and general
Carlisle Corp. manager.
Carpenter Technology Corp 101 West Bern St., Reading, Pa. 19603 John Moxon, president.
Cayuga Rock Salt Co Myers, N.Y. 14866 William B. Wilkinson, vice president.
Coats & Clark, Inc 430 Park Ave., New York, N.Y. 10022 W. A. Wailer, secretary.
Columbia Tool Steel Co Lincoln Highway and State St., Chicago Adolph J. Scheid, president.
Heights, III. 60411.
Committee of Tool Steel 120 East 42d St., New York, N.Y. 10017 - - - L. F. Granger.
Producers, American Iron &
Steel Institute.
Copper & Brass Fabricators 225 Park Ave., New York, N.Y V. E. Veltfort, managing director.
Council, Inc.
PAGENO="0050"
3650
MEMBERSHIP ROSTER OF THE TRADE RELATIONS COIJNCIL-Continued
Company Address Official
Crompton & ithowles Corp 93 Grand St., Worcester, Mass. 01610 James Barringer, executive vice
president.
Crompton Co., Inc 1071 Avenue of the Americas, New York, Howard Richmond, president.
N.Y. 10018.
Cycle Parts and Accessories % Troxel Manufacturing Co., Moscow, R. A. Faulhaber, president.
Association. Tenn. 38057.
Day Mines, Inc Day Building, Wallace, Idaho 83873 Henry L. Day, president.
Draper Bros. Co 28 Draper Lane, Canton, Mass. 02021 John H. Draper, Jr., president.
Dundee Mills, Inc Griffin, Ga. 30223 J. M. Cheatham, president.
Ensign-Bickford Co Hopmeadow St. ,Simsbury, Conn. 06070 - - - John E. Ellsworth, president.
Fostoria Glass Co 1200 1st St., Moundsville, W. Va. 2604L~_ David B. DaIzell, president.
Fourco Glass Co P. 0. Box 991, Clarksburg, W. Va. 26302_~ 0. D. under, secretary-treasurer.
Fourdrinier Wire Council 1012 14th St., NW., Washington, D.C. 20005~ John Ferry, secretary-treasurer.
Glass Crafts of America 816 Empire Building, Pittsburgh, Pa. 15222~ J. Raymond Price, executive secretary.
A. F. Gallun & Sons Corp 1818 North Water St., Milwaukee, Wis Edwin A. Gallun, chairman of the board.
The Hall China Co East Liverpool, Ohio 43920 John T. Hall, president.
Hardwood Plywood Manufac- 2310 South Walter Reed Dr., Arlington, Va. Clark E. McDonald, managing director.
turer's Association. 22206.
Harnischfeger Corp 4400 W. National Ave., Milwaukee, Wixc. Walter Harnischfeger Chairman of the
53214. Board.
Hastings & Co., Inc 2314 Market St., Philadelphia, Pa. 19103 - - Henry R. Robb, Jr., president.
Industrial Fasteners Institute 1505 East Ohio Building, Cleveland, Ohio Frank Masterson, president.
44114.
International Silver Co 500 South Broad St., Meriden, Conn. 06450_ Stuart C. Hemingway, executive vice
president.
James R. Kendrick & Co., Inc 419 Park Ave. S., New York, N. Y. 10016~_ Warren R. Kendrick, secretary.
The Lamson & Sessions Co 700 Terminal Tower, Cleveland, Ohio 44113 R. A. Gatz, vice president, cnrporate
secretary.
Latrobe Steel Co P. 0. Box 31, Latrobe, Pa. 15650 Marcus W. Saxman III, president
Homer Laughlin China Co Newell, W. Va. 26050 J. M. Wells, Jr,. executive vice president
and secretary.
Libbey-Owens-Ford Co 811 Madison Ave., Toledo, Ohio 43624 James M. A&l4oy, vice president
Lead Pencil Manufacturer's 60 East 42d St., New York, N.Y. 10017 Carl W. Priesing, executive vice presi-
Association. dent
Ludlow Corporation 145 Rosemary St, Neeham Heights, Mass. J. C. Mahoney, vice president
Magee Carpet Co West 5th St, Bloomsburg, Pa. 17815 James G. Law, president
Marriner & Co 600 Broadway, Lawrence, Mass. 01841 Kenneth W. Marriner, president
Otto B. May, Inc 52 Amsterdam St, Newark, N.J. 07105 Dr. Ernest H. May, president.
Metal Cookware Manufacturers P.O. Box D, Fontana, Wis. 53120 Kenneth H. Johnston secretary.
Association.
Mohasco Industries 57 Lyon St., Amsterdam, N.Y. 12010 William J. Kennedy, secretary.
National Association of Wool 386 Park Ave. S., New York, N.Y. 10016_ - Jack A. Crowder, president
Manufacturers.
National Cherry Growers & 302 North 29th St, Corvallis, Oregon 97330 Ernest H. Wiegand, executive secretary.
Industries Foundation, Inc.
National Footwear Manufacturers 342 Madison Ave., New York, N.Y. 10017~ Mark E. Richardson, president
Association, Inc.
National-Standard Co 8th and Howard St., Niles, Mich. 49120 James A. Mogle, vice president.
Northern Textile Association 211 Congress St., Boston, Mass. 02110 William F. Sullivan, president
Optical Manufacturers Association 30 East 42d St., New York, N.Y. 10017 Charles R. Oddy, secretary-treasurer.
Owens-Illinois, Inc., Consumer P.O. Box 1035, Toledo, Ohio 34601 F. D. Pinotti, vice president
and Technical Products Division.
Phelps Dodge Corp 300 Park Ave., New York, N.Y. 11022 John E. Masten, vice president and
secretary.
PPG Industries: 1 Gateway Center, Pittsburgh, Pa. 15222_. George P. Cheney, Jr., counsel, govern-
ment and public affair.
Republic Steel Corp P.O. Box 6778, Cleveland, Ohio 44101 C. J. Kraven, director of government
relations.
Rockwell Manufacturing Co...... -- 400 North Lexington Ave., Pittsburgh, Pa. Col. Willard F. Rockwell, chairman of
15288. the board.
Rubber Manufacturers 444 Madison Ave., New York, N.Y. 10022.~ C. P. McFadden, chairman, footwear
Association, Inc. division.
Do do William C. Campbell, Industrial Rubber
division.
Schiffli Lace & Embroidery Manu- 513 23d St., Union City, N.J. 07087 I. Leonard Seller, executive director.
facturers Association.
Service Tools Institute 331 Madison Ave., New York, N.Y. 10017_ - George P. Byrne, Jr., secretary.
Singer, Frederick G Chevannes, Greenville, Del. 19807
Sprague Electric Co 87 Marshall St., North Adams, Mass. 01247 Robert C. Sprague, chairman and
chief executive officer.
J. P. Stevens & Co., Inc 1460 Broadway, New York, N.Y. 10036 James R. Franklin, assistant to the
president.
Syracuse China Corp Syracuse, N.Y. 13204 R. C. Cobuorn, vice president.
Teledyne, Inc 1901 Avenue olthe Stars, Los Angeles, Calif. RobertS. Bell, assistantto the president.
90067.
Timken Roller Bearing Co 1835 Deuber Ave. SW., Canton, Ohio 44706 G. L. Deal, vice president, finance.
The Torrington Co 59 Field St., Torrington, Conn. 06790 E. B. Thompson, vice president and
secretary.
United States Potters' Association Box 63, East Liverpool, Ohio Miss Dena E Powell, acting secretary.
Viking Glass Co New Martinsville, W. Va C. T. Swartling, president.
PAGENO="0051"
3651
Mr. STEWART. They cover most sections of American manufacturing
industry. The council has for the past 6 years made a serious effort to
study the facts of our foreign trade policy. We have created `at our own
expense a computer data bank containing all Government statistics
on employment, output and foreign trade of manufacturing industries.
We attempt to combine a study of the facts with an accurate knowl-
edge of how our foreign trade remedies are administered.
We come to you this morning with broad recommendations for re-
form of our Nation's foreign trade procedures, on behalf of the Na-
tion's manufacturing industries generally. We are not pleading the
case of any particular industry but manufacturing industries generally
in the United States. .
The committee has performed a helpful service by printing the testi-
mony of the `administration witnesses and the materials which they
submitted at your request for the record. On behalf of industry, we
thank you for this. Some of the material submitted at your request is
extremely valuable and I shall refer to several portions of it.
I have studied the prepared statements of the administration wit-
nesses and I find it very discouraging that there is such little evidence
in their prepared testimony of some of the basic problems that exist
in our foreign trade policy.
Our trade machinery and policies have been totally ineffective to ad-
vance the interests of our export industries and totally ineffective to
limit the imports which are increasing at a rapid rate.
If you will turn to page 2 of my statement, there is a chart prepared
by Assistant Secretary of Commerce Davis, which shows our U.S.
trade surplus, as it is entitled. This chart, however, needs to be cor-
rected and it is very simple.
It overstates exports by $2 billion a year because it does not exclude
the Government-financed exports and it understates imports by $2
billion a year because it does not take them at the CIF value.
If you would take a pencil and just draw a line where you see the
"4" at the left-hand side, straight across the page, you will then get a
true picture of what our U.S. commercial trade balance is, and it is not
a. surplus; it is a significant deficit.
Originally, the trade agreement legislation was structured to the very
sound idea that by negotiation we would gain access for our exports
to markets abroad by giving comparable access to the exports of other
countries to the U.S. market. It was, to be a reciprocal program. And
it was a reciprocal program prior to Warld War II.
When the GATT was drawn up, and the architects were the people
in our State Department., in 1945 and adopted in 1947, they were con-
cerned with using a massive reduction of tariffs as a form of economic
foreign aid. You all remember the slogans, "Trade not Aid" and "Close
the Dollar Gap" to help the reconstructed industries of Western Europe
and of Japan.
Our trade agreement negotiations under the GATT were essentially
unilateral so far as their results were concerned during the 1950's ana
the late 1940's. In 1956, we did the extraordinary thing, extraordinary
in its generosity, by reducing our tariffs in concessions granted to
Europe for the benefit of Japan.
Our Government granted concessions on our tariffs to Western
PAGENO="0052"
352
Europe in exchange for a promise by Western Europe to open up its
markets to the products of Japan. This promise was not realized. In-
stead, the countries of Western Europe attached reservations to the
admission of Japan to GATT in the middle 1950's and they have
steadily applied that reservation by imposing quotas on imports from
Japan.
In the Kennedy round, the negotiating plan originally was that con-
cessions on U.S. industrial products would be offered in exchange for
concessions by the Common Market particularly on agricultural prod-
ucts from the United States.
The negotiating technique was that each country put on the table not
the articles it was willing to reduce but the articles that it would not
subject to reductions and everything not mentioned would be subject
to a 50 percent cut in duty.
Our negotiators were led down the garden path by this technique.
Our modest exceptions list was on the table. At the end of the negotia-
tions, the Common Market did not grant any significant modifications
in their variable import levy plan on agricultural imports and our
negotiators instead of getting up and walking away from the table
signed the agreement, so that we made very major reductions in our
industrial tariffs and got precious little for the benefits of our agricul-
tural exports.
So far as our industrial products are concerned, the day that the
tariff, the Kennedy round agreement was to go into effect, the Common
Market announced that it would harmonize its border taxes. The result
was that for the major markets for U.S. exports an increase in the
border tax rate erased the benefit of those tariff concessions that were
granted on industrial products that might have helped U.S. exports.
We thus came out of the Kennedy round having used up a great deal
of our currency for bargaining, that. is, our tariff levels, without gain-
ing any significant advantages for our exports but opening wide the
market of the United States for imported products.
The Trade Relations Council in its data bank calculated that in
1966 the products of manufacturing industries represented a net loss
of 160,000 jobs when you count the jobs created by exports and loss
of jobs represented by directly competitive imports.
Up until this time, the Government, itself, has not made such a
study but I am complimenting you, Mr. Chairman, and the committee
on the fact that in the materials that you have printed which you re-
quested from the administration, and I compliment the administra-
tion for making this study, there is an analysis by the Bureau of Labor
Statistics of both the employment content of our exports and our im-
ports for the years 1966 and 1969.
As to manufactures, Mr. Chairman, the Government study shows
that we had a modest net surplus of job's created in 1966, something
in the order of about 79,000 jobs, but in 1969, according to their figures,
we had a 168,000 job deficit. That is to say, the job content of the
directly competitive manufacturedimports was nearly 168,000 greater
than the job content of the exports from this country. A moment's
reflection will tell you that this must be the case.
Even the advocates of free trade identify our export potential in
those sophisticated products made by a.utomated methods which have
PAGENO="0053"
3653
very low labor content whereas, our imports consist of labor-incentive
products which displace more labor per dollar's worth of imports than
we create by our exports.
The Bureau of Labor Statistics that made this study that is in your
committee print used the imports at the foreign value which understate
their value in the American market and their displacement effect on
American jobs by 20 percent.
When that adjustment of 20 percent is made, it will be seen that
the net job displacement in the year 1969 of our foreign trade balance
in manufactures was a half million jobs. And what is the significance
of that, a half million jobs? It is enough to reduce the unemployment
rate in manufacturing industries from the present 5 percent down to
about 3 percent.
And we are experiencing this increase in unemployment at the ex-
pense of countries like Japan whose unemployment rate is less than
1 percent.
In my prepared testimony, I have presented the economic data per-
tinent to a consideration of the ~situation of 10 basic industries. In
order to demonstrate how persuasive is this imbalance in our trade, the
10 industries are steel, textiles, footwear, electronic products, automo-
biles, ceramic tiles, fiat glass, textile machinery, bicycles, and hard-
wood plywood.
Mr. Ohairman, in 1969 those 10 industries experienced a net balance
of trade deficit in their products of $6,200 million. Those industries
in the aggregate through the first quarter of 1970 have sustained an
absolute loss of 303,100 jobs. It is not the case, as administration wit-
nesses represented in their testimony, that the disappearance of our
trade surplus and our trade problems may be attributed to temporary
factors such as inflation, the overheating of the U.S. economy, and
the like. Their efforts to assign our present dilemma to temporary
factors that would go away is inaccurate.
The reality is that we have reduced our tariffs so low and the com-
petitive advantage of countries whose industries have the same tech-
nology, and workers that are as highly motivated as ours, is so great
that this situation will continue to grow worse.
We identify as a result of our study of the situation of American
industries, six i'ssues which I set forth commencing at page 22 of my
statement. At the bottom, first it is clear to us that the selective ex-
change-page 22 at the bottom-the selective exchange of well-defined
market opportunities in the TJnited Sta.tes and foreign countries
which was the essence of Cordell Hull's reciprocal trade agreements
program has not been realized.
Our trade agreement program in fact has been a failure by not
being faithful to that important concept.
Second. Because the trade agreement authority conferred on the
President-and this applies to all the Presidents that have used the au-
thority in the postwar era-was used as a species of foreign economic
aid rather than as a commercial instrument to benefit our industries
in equal measure with the benefit given foreign industries, the U.S.
share of world exports of manufactures has declined, while the foreign
industries' share of U.S. consumption of manufactured articles has
increased, and increased by double in the last 6 years.
PAGENO="0054"
3654
Third. With the currency for bargaining reciprocal trade advantage
on behalf of the United States substantially wasted or dissipated by
the kind of unilateral tariff negotiations we have conducted in the
past and especially in the Kennedy round, we are now in a difficult
position to protect our commercial interests in the seventies because
there is little left in the way of bargaining power. Unless we put all
of our manufactured products on the free list the duty rates are so
low following the Kennedy round that there is not much left to put
on the table as currency for ba.rgaining.
Fourth. The syndrome that the United States has a duty to exercise
leadership by always going first and the syndrome that our export
industries are invincible to competition from like industries around
the world which have dominated the judgment of our trade negotiators
throughout the postwar era is now contrary to the facts of interna-
tional commercial life. The sooner that concept of the use of our
trade agreements authority is outlawed the sooner we will begin to get
down to cases in straightening out our foreign trade position and its
problems.
Fifth. Contrary to the philosophy of the foreign-aid-oriented trade
agreement negotiating experts of the past two decades, many of whom,
Mr. Chairman, are still occupying key positions in the administration's
foreign trade apparatus, the realities of international commercial
life are that the U.S. industry does not possess any signficant
technological advantage translatable into competitive cost advantages
in comparison with its foreign counterparts.
What is the outlook for the seventies? As we see it, the outlook is
that technologically dynamic, large-scale manufacturing enterprises
located in foreign countries, many substantially financed and enriched
by technological know-how by U.S. corporations, will reap the eco-
nomic advantage of the cost bias of the lower standard of living of
foreign countries and dominate world trade in manufactured products.
This dominance will extend to the progressive diminution of U.S.
share of world trade in manufactured products and the continued and
more rapid invasion of the U.S. markets by foreign industries. This
process is already well-advanced and it will certainly continue.
Sixth. There has be,en no coherent and consistent policy for the sup-
port of domestic manufacturing industries in this kind of contest com-
parable to the close liaison and effective support which Japan and the
developed nations of Europe give their industries in competing for
export markets.
The efficient, comprehensive, and realistic way that the Japanese
Government subsidizes research and development and the expansion
of plant capacity, and its limitation of imports of competitive prod-
ucts, is really an example of what a government can do to apply the
forced draft to the expansion of her industries and increase her posi-
tion in world trade.
While Japan and the countries of Europe are subsidizing their in-
dustries, what has our Government done? It has compensated the
measures taken by foreign governments in behalf of the foreign in-
dustries by major reductions in our import duties to make our domestic
market even more available to the products of those industries.
We present our recommendations beginning on page 25. These recom-
PAGENO="0055"
3655
mendations, Mr. Chairman, and members of the committee, we believe
to be politically realistic within the framework of the world of what
is possible. If adopted, we think they will make possible a major turn-
around in these trends that we have talked about, so that American
industries can remain alive.
First, as to the trade agreement negotiating procedure, at the bottom
of page 25. One of the fundamental defects in the past has been that
the people who in fact make the policy decisions as to what will be
negotiated and how it will be negotiated are not the persons who hear
the representatives of domestic industry who come to present their
case. With some limited exceptions, the hearing is conducted by an
interagency panel of middle-level civil servants who are not policy-
makers and who summarize what they hear and that summary may
or may not even be considered by the policymakers.
Therefore, my first recommendation as to the trade agreement nego-
tiating procedure is that those who make policy and those who nego-
tiate the trade agreements also take the trouble direôtly to hear and
listen to domestic interests in advance of the negotiations.
This committee has tried earnestly to bring about that state of af-
fairs. You have failed. Not because your intent was not accurate and
proper but because the executive branch simply has not complied with
your intent.
Secondly, the U.~S. Government must at long last reject the curiously
ambivalent view that it has of domestic industry that forces it to hold
industry representative's at arm's length throughout the course of the
negotiations. We are the only major developed country in the world
that does not have available to its, negotiators accredited to the negoti-
ated team industry advisers who `are present during the course of the
negotiations and that is a reform that is long overdue.
Second, as to the antidumping and countervailing duty remedies.
We refer to these because for the lang pull if realistic efforts were made
to purge our foreign trade of unfair practices, many of the problems
that develop and go unchecked and lead to insistent demands for
quotas and other extreme actions, would never come into being. Neither
the antidumping or countervailing duties remedies work. As presently
administered and as they have been administered in the past 10 or 15
years, they are a snare and a delusion and wholly unsuccessful. They
waste the time and effort that industries devote to the occasional at-
tempts to invoke their provisions.
Apparently on the basis of an informal accommodation made by
our Government with Japan in trade agreement negotiations in the
fifties and in the sixties and implemented by an informal commit-
ment in the Kennedy round, our Nation displays special solicitude for
dumping by Japan. The result is `~ that the people who handle anti-
dumping investigations are insensitive to the actual commercial real-
ities of the problem.
All doubts in dumping investigations are resolved in favor of the
Japanese. Should per chance a finding of dumping slip through this
process, the Treasury Department has almost uniformly in the past
promptly accepted written assurances from the Japanese manufac-
turers not to continue the dumping.
On the basis of those assurances, the dumping investigations have
PAGENO="0056"
3656
been terminated. This practice has exonerated virtually all dumping
by Japanese manufacturers in the past. It has provided no relief for
the future. It is an abominable system. It has been strongly criticized
by domestic industries.
Two weeks ago, on May 27, the Treasury Department published
a revision of its procedures in regard to the discontinuance of dump-
ing investigations. Henceforth, dumping investigations will be con-
cluded on the basis of written assurances from foreign manufacturers
only when the margin of dumping is considered minimal in relation
to the total volume of sales involved.
Very significantly, in announcing the change in the policy, Assistant
Secretary of the Treasury Rossides stated that the past practice, and
I want to quote his exact words, "allowed foreign exporters to under-
cut the prices of their U.S. competition in American markets without
undue concern for the possible consequences under the antidumping
act."
Think about that for a minute, 1~fr. Chairman.
Here is an admission by the Treasury Department that the policy
that they have pursued for the past two decades encouraged dumping
practices by the foreign manufacturers, protected them in the doing
of it and enabled them to undercut the prices of their American com-
petitors in this market. A startling admission but an accurate one.
Domestic industries welcome this change in practice by the Treasury
Department. However, in response to the Kennedy round antidump-
ing code, the Treasury Department has changed the date from which
appraisement of import entires is withheld in a dumping investiga-
tion.
Formerly under the Antidumping Act and the customs regulations
the withholding of appraisment, that is, simply the action in which
they stop to liquidate the import entries so that they have a chance
to impose dumping duties on impoi~ts that have been found to have
been dumped, formerly this withholding applied to all import en-
tries entered during a period commencing 4 months prior to the date
the dumping complaint was filed.
But when the United States signed the antidumping code, the
Treasury changed its regulations and now the withholding of ap-
praisement commences on the date when at the end of an investigation
the Treasury Department publishes a notice of withholding. The na-
ture of that change is that all of the dumping that has transpired prior
to the filing of the complaint and during the period of investigation
until a year or two later when a finding is made, all of that dumping
is exonerated, is not subject and cannot be subject to dumping duties
under this regulation by the Treasury Department.
Furthermore, under the customs practice, when the Bureau of Cus-
toms reaches a tentative conclusion that the merchandise investigated
is being dumped they call in the foreign manufacturer and say in ef-
fect, "See here, we have come to the conclusion that you are dumping
and we are going to publish a notice of withholding."
That gives the foreign manufacturer an opportunity to change his
prices coincident with the date of the notice of withholding so that in
fact none of his imports will be subject to dumping duties.
As a result of the U.S. acceptance of the Kennedy Round Anti-
PAGENO="0057"
3~57
~dumping Code, which was not authorized for negotiation under
the Trade Expansion Act of 1902, and as a result of Treasury's
~ change of its dumping regulations pursuant to the Code, the anti-
~ dumping remedy has been converted into a shield to protect foreign
manufacturers who engage in dumping rather than a sword to strike
down the practice.
In my opinion, the type of change which Treasury made in the
dumping regulations in response to the Kennedy Round Antidump-
ing Code is a clear violation of the intent of title II of Public Law 90-
634 which instructed the Secretary of the Treasury to take the provi-
sions of the code into account, and now I quote directly from the law:
Only insofar as they are consistent with the Antidumping Act, 1921, as ap-
plied by the agency administering the Act.
Mr. Chairman, the Treasury Department had applied the Anti-
dumping Act from 1921 down to 1968 *in one manner. Then they
change it. I believe that is a clear violation of your intent in passing
that particular law.
As for the countervailing duty remedy, the Treasury Department
has not had the fortitude in this or any other administration to ad-
minister the countervailing duties statute since the emergence of the
practice in Europe on a widespread basis of remitting internal taxes
on exports.
Under the decisions of our Supreme Court, the remission of taxes
with respect to good exported is clearly a bounty or grant which
should automatically be checked by the imposition of countervailing
duties. The practice is so widespread that if the Treasury Depart-
ment tried forthrightly to administer the statute in accordance with
its intent, countervailing duties would be imposed on virtually all
manufactured imports from Europe and from Japan.
The unwillingness of Treasury to face up to the scope of this task,
viewed in connection with its mandatory duty under the statute,
should not excuse the Department, which is, after all, concerned with
our balance-of-payments deficit, from now making a beginning to act
more realistically in the administration of that remedy.
Third, as to the escape clause. There comes a time in the flow of
trade stimulated by tariff cuts where, quite apart from unfair prac-
tices such as dumping or subsidizing exports, the injury to the domestic
industry is so manifest that some adjustment should be made in the
tariff in order to smooth out the rate of increase of imports.
So, we have an escape clause and it is incorporated into GATT.
Article XIX of GATT uses language that was patterned after the
escape clause in use in this country, prior to the Trade Expansion Act
of 1962. The administration then in power, that is, in 1962, urged an
amendment of the domestic escape clause which, as you know, imposed
a much more severe test than in the GATT escape clause and by that
very act, by imposing on our industries a much tougher test to meet
than GATT would recognize as permissible, we gave away rights un-
der GATT that we had paid for thrbugh the bargaining that preceded
the negotiation of that document.
We are very good at giving away our rights, Mr. Chairman.
It is a commonplace fact that the 1962 tariff adjustment provisions
will not work. The administration's bill, H.R. 148'TO, seems on its
46-127 0 - 70 - pt. 13 - 4
PAGENO="0058"
36~58
surface to reform those provisions but in actuality the acirninistra-
tion's amendments would create a condition in which the burden of
proof to be met by domestic industries is even heavier than that under
the present impossible escape clause. Allow me to explain.
Under the present statute, a domestic injury must prove as a second
burden of proof that increased imports are the major factor in causing
serious injury. That means that an industry has to attempt to come
up with quantitative proof showing that imports represented 51
percent or more of the causation of injury.
Now, the administration's bill would require that the domestic
industry prove that increased imports have been the primary cause
of serious injury. But, think for a moment. In order to demonstrate
that one of a number of causes is the primary cause you have to be
able to provide some quantitative measurement of all the causes, line
them up in an array of magnitude and demonstrate that imports
are the greatest of all of the identifiable and measured causes.
This is a much more severe and difficult method than the 1962 act
and everyone agrees that that burden of proof is impossible to meet.
A preferred approach is that set forth in title II of your bill, Mr.
Chairman, H.R. 16920, which provides the same standard of economic
morality for industries as it does for labor unions, namely, the burden
of proof to be met for relief is that increased imports have been a
substantial cause of serious injury.
The GATT escape clause is consistent with this so the enactment of
your bill would in no way violate, if one wished to consider that
possibility, the intent and meaning of the GATT escape clause. We
would be back to where we were and what we purchased under the
GATT escape clause. But these are technical matters.
The major flaw in our escape clause lies in another quarter, and it
is this. Congress has provided an expert body, an independent agency,
which, but for the 7-year term of its commissioners, is not
directly subject to guidance by the political philosophy of a particular
administration.
That agency, the Tariff Commission, is therefore for the long term
more likely to be a consistent finder of facts than some brance of the
executive department that must respond to the policy imperatives of
the President in power.
The Tariff Commission, as an expert body, by statute is required
to make a two-part finding in an escape clause case. First, it must find
whether imports are causing serious injury and, if so, it must find the
amount of tariff increase or the imposition of quotas necessary to
remedy the injury. So far, so good.
The vice of the present system is that after that expert body care-
fully conducts an exhaustive investigation, including public hearings,
and makes its finding, the finding goes to the executive branch where
it is virtually ignored. During the public hearing, the domestic indus-
try representatives are subject to cross-examination by anybody who
chooses to enter the case and this usually includes representatives of
at least five foreign countries.
The apparatus for trade policy within the executive branch, how-
ever, is such that every department in its foreign trade policy side
feels absolutely free tc~ consider and find the facts afresh as though
PAGENO="0059"
3659
the Tariff Commission had never given the matter consideration. In
doing so, they conduct ex parte conferences with all of the interested
parties who are anxious to overturn the finding of the Tariff
Commission.
The result is that in those few instances where the Tariff Commission
has found injury from imports the Office of the Special Representative
for Trade Negotiations, fronting for an interdepartmental group,
has recommended to the President that he not do what the Tariff
Commission found to be necessary.
The Commerce Department is believed to be the only member of the
interdepartmental group which in recent years has ever voted to
accept the recommendations of the Tariff Commission.
Now, by comparison, in antidumping proceedings, in those cases
where the Treasury Department makes a finding of dumping and
the case goes to the Tariff Commission and the Commission investigates
and finds injury, that finding is self-executing under the law.
The Trade Relations Council recommends that the findings of the
Tariff Commission in escape clauses also be self-executing and be
implemented automatically by, the Secretary of the Treasury just
as in antidumping cases.
With the reform of the escape clause, there would be some possibility
that adjustments could be made in the level of imports affecting major
industries so that some beneficial effect could be preserved in our trade
interests for domestic empolyment and for our balance of payments.
Such a reform of the escape clause would defuse the insistent demand
on the part of the industries that are hurt for mandatory inport
quotas.
Fourth, as to the role of the Commerce Department in foreign trade
policy. The Commerce Department has an insufficient role in foreign
trade policy at this juncture. Among the Cabinet agencies, it is the most
expert body to weigh and evaluate the force of influences on the
foreign trade of the United States. It has the strongest interest to do
so; yet, it has only one voice out of eight in the legal voting apparatus
of the interdepartmental group presided over by the Special Rep-
resentative for Trade Negotiations. It has no char~ce for its views to
come directly before the President as the advice of his most expert
adviser on industry matters, though technically the Secretary is al-
lowed to register a dissent from interagency decisions that he disagrees
with.
We therefore recommend that there be established a foreign trade
board within the executive branch under the chairmanship of the
Secretary of Commerce with membership for the Secretaries of Agri-
culture, Interior and Labor. These are the Cabinet officers directly
concerned with domestic matters and with the impact of foreign trade
developments on the domestic economy.
Let that foreign trade board articulate and present directly to the
President a recommendation on foreign trade policies. Then let the
Secretary of State and the Office of the Special Representative present
their own views separately to the President. In that way, those Cabinet
officials with the constitutional responsibility for the domestic economy,
namely, Commerce, Labor, Agriculture, and Interior, will have a direct
channel to the President and an authoritative way of being heard,
PAGENO="0060"
3660
In summary, therefore, the Trade Relations Council recommends,
first, enactment of H.R.. 16920 with amendments to title II to accom-
plish the following:
A. Make the findings of the Tariff Commission in escape clause cases
final and self-executing.
B. Establish a Foreign Trade Board within the executive branch
along the lines I have just described.
2. Amendment of the Antidumping Act so that the withholding of
appraisment must extend to imports entered from a date 4 months prior
to the date on which the complaint is filed with the Secretary.
3. Amend the countervailing duties statute to require that the Sec-
retary of the Treasury impose countervailing duties on all imports
which have received the benefit of the remission of value added or
other internal taxes in the country of origin.
Thank you, Mr. Chairman, and members, for your attention.
(The formal statement follows:)
PREPARED STATEMENT OF EUGENE L. STEWART, GENERAL COUNSEL, TRADE RELATIONS
COUNcIL OF THE UNITED STATES, INC.
Mr. Chairman and Members of the Committee: I am Eugene L. Stewart, General
Counsel of the Trade Relations Council of the United States. That is a national
organization broadly representative of our nation's manufacturing industries.
Using the Committee's print of written statements and other material submitted
by Administration witnesses in these public hearings, I have carefully considered
their version of the nature and cause of the current foreign trade dilemma of the
United States. It is discouraging to study the considered testimony of persons
responsible for the operation of our trade policy machinery and to find in their
comments so little recognition of some of the fundamental defects Which have
produced the current debacle in our nation's foreign trade position.
It is, I think, quite clear that our trade balance is a function of both our exports
and our imports. The plain fact of the matter is that our trade machinery and
policies have been totally ineffective to advance our export interests, and they
have permitted unchecked, wild, and rapid increases in our imports that have
produced the abrupt deterioration in our trade balance depicted in the following
chart prepared by Assistant Secretary of Commerce Kenneth Davis.
PAGENO="0061"
Billions
of
Dollars
;~L i~u~ ~J~PUJ~
969
Including exports of P.L. 480, AID, and military sales but excluding military grant-aid.
PAGENO="0062"
3662
Allow me to trace for you the major developments that have placed us in this
position.
The original concept of Cordell Hull's Reciprocal Trade Agreements Act en-
acted in 1934 was that a selective exchange of tariff concessions would be made on
a bilateral basis with nations willing to open their markets for U.S. products in
exchange for a commensurate widening of the U.S. market for their products.
The nations of the Atlantic community, led by the United States, developed the
concept of multilateral trade agreement negotiations under the aegis of a some-
what permanent international body. These efforts culminated in the negotiation
of the General Agreement on Tariffs and Trade in 1947. Under the auspices of
GATT, driven by U.S. leadership, six rounds of tariff negotiations have been
carried out in the post-World War II era.
The United States has had changing concepts about the immediate objectives
to be attained in these trade agreement negotiations. From the late 1940s and
into the decade of the 1950s, the dominant objective was "trade, not aid" and'
"close the dollar gap." U.S. markets were opened wide for the benefit of the
reconstructed industries of Europe and Japan as a form of economic aid.
In the mid-1950s, the dominant purpose of U.S. negotiations was to open the
markets of Europe for the products of Japan. The United States opened wider its
markets for the products of Europe through tariff concessions in exchange for
commitments by European countries to confer trade concessions upon Japan.
The intended concessions from Europe to Japan pros ed to be highly transitory.
European nations reserved the right to impose quotas on imports from Japan to
safeguard European industry and balance of payments under Article XXXV
of GATT.
The decade of the 1960s was opened with the Dillon Round which focused pri-
marily on bargaining with the Common Market. These were the last negotiations
in which the peril point procedure was observed under which the Tariff Commis-
sion identified the extent, if any, to which U.S. tariffs could be reduced in the
negotiations without causing injury to domestic industries. As a result of the
Commission's peril point findings, U.S. concessions were quite selective.
The EEC declined to negotiate on agricultural commodities in the Dillon Round
but gave assurances that the position of U.S. exports would not be detrimentally
changed by the implementation of the common agricultural policy of the Com-
mon Market. These assurances have not been carried out.
The Kennedy Round has been described as a success, the finest example of the
initiative of the United States in liberalizing world trade. Regrettably, instead
of significantly enlarged market opportunities for U.S. exports, we find major
roadblocks:
1. The variable import levies imposed by the EEC on agricultural imports.
2. The harmonization of the value added tax and the related adjustment of
the border taxes imposed by Common Market countries on imports. As stated in
a research report of the National Industrial Conference Board,
"the cost of entry of products moving from the United States to Europe are
generally higher than the comparable cost of the same items shipped to the
United States."
"For shipments `to a common third country, * * * the operation of the
border-tax adjustment of a country with turnover taxes will enhance its `competi-
tive position over that of the United States."
"The practical operation of `the border-tax adjustment serves to increase its
burden for imports."
"The combined effect of the tariff reductions arrived at through the Kennedy
Round negotiations and the adoption by Germany of a value-added tax was a
higher cost of entry for the shipment of American products `to that country than
existed prior to the adoption of these new measures. The higher rate of border
adjustment * * * more than offset the lower duty rates."
3. The retention by Japan of its restrictive nontariff barriers to U.S. exports,
and the development by European nations of a restrictive practice `based upon
standards and product certification procedures for industrial products from which
the United States is excluded.
4. The proliferation of regional and preferential trading bloc areas which
exclude the United States.
In short, notwithstanding twenty years of effort by the United States and the
tremendous price paid by its substantially one-sided tariff concessions in the
PAGENO="0063"
366~
GATT `trading rounds, the world trade apparatus is in greater disarray today
than at any time in our postwar history.
The original concept of the Kennedy Round negotiations included specifically
the Common Market's variable import levies on agricultural products; the viola-
tion of U.S. rights under GATT implicit in the manner in which the border tax
was being administered by Common Market countries in relation to U.S. exports;
the separate violation of U.S. rights under GATT represented `by the use by
Japan and the Common Market of nontariff measures such `as Japan's "adminis-
trative guidance" `systems for controlling t'he allocation of exchange for use in
purchasing im'ported products; the effect on the foreign `trade of the United
States produced by the diversion of Japanese exports resulting from `the Com-
mon Market's quantitative limitations against such exports.
In fact, it was the negotiating plan to grant reductions in our industrial duties
in exchange, at least, for an amelioration of `the variable import levies on agri-
cultural commodities. We filed our exceptions list on `that theory; they were
sparse in comparison with other countries' exceptions. The E. E. C. refused to
make concessions on its variable agricultural levies; instead of walking away
from `the agreement, `by `direction our negotiators signed it.
The result is that the U.S. market was opened wider to imports of manufactured
products from Japan and Europe, while U.S. agricultural interests were penalized
by `the failure to improve access for exports of `agricultural products subject
to `the Common Market's variable import levies system. We are confronted with
the situation in which we have less favorable access to the principal markets
for our goods than prior to the Kennedy Round, while our competitors have
greatly increased access for their products `to the United States market. This
has contributed to an average annual rate of increase of imports of 15 percent,
compared with exports of only 6 percent.
The significance of this position is underscored by the major change in `the
competitive position of United States `products in .the U.S. and export markets
which h'as resulted from `the great progress made by our foreign competitors in
"ca;tching up" with our technology while retaining from the point of view of mar-
ket costs the economic advantage of `the lower wages inherent in their lower
standards of living.
Against this background, it is difficult to place faith in the assumption which
underlies the position of advocates of a "free trade" foreign economic policy for
the United States. That assumption is `that the increased exports of the capital-
intensive, technologically oriented export industries of the United States will
create more jobs for American workers than are lost un'der the impact of increased
imports of labor-intensive products.
The `Trade Relations Council's `study released last year is responsive `to that
point. At the time that report went to press, our data hank included reasonably
complete data for 313 industries These accounted in 1966 for 64% of total em-
ployment in `all U.S. manufacturing industries. They `supplied 85% of the value
of~hipments of manufactured goods in 1966. Products like or competitive with the
output of `these 313 industries accounted for 99% of tota'l U.S. import's of manu-
factured goods in 1966, and of 85% of U.S. exports.
Within this group of 313 in'dustries, there were 128 which experienced a
balance of trade deficit in 1967. These accounted for 25% of total employment in
all manufacturing industries in 1966, and for 29% of the value of sipments. Most
significantly, however, imports of articles `like or competitive with the output
of these 128 industries accounted for 65% of total imports of manufactured prod-
ucts in that year, while the exports of these industries accounted for only 12% of
total U.S. exports of manufactures.
The balance of trade deficit of these industries in 1966 was equivalent, at the
value of shipments per worker in these 128 industries, to a net loss of 367,552
jobs. Since the 128 industries preponderantly have comparatively `high labor-
intensive ratios, it may also be said that the lost job opportunities represented
lost employment opportunities for comparatively unskilled workers who, in
manufacturing, are chiefly employed by such industries.
The effect of foreign trade in the product categories of `these 128 industries on
the U.S. balance of payments was even more `dramatic. Taking imports and
exports at the values reported by the Department of Commerce, we had a
foreign trade deficit of $9 billion in 1967in these products.
In contrast, there is a separate group of 185 industries for which foreign trade
has had `the opposite effect. This group accounted in 1966 for 39% of the total
PAGENO="0064"
364
employment in all manufacturing industries, and for 56% of the value of ship-
ments. Imports of products like or competitive with the output of these industries
accounted for only 34% of total imports of manufactured articles in 1967,
whereas these industries supplied 73% of total U.S. exports of manufactures
in that year.
Foreign trade in the product categories of these industries resulted in a for-
eign trade surplus of $10.4 billion in 1967. Because the 185 industries are, in
general, less labor intensive than the separate group of 128 industries previously
described, the job equivalent of the foreign trade surplus in the product cate-
gories of the 185 industries was equivalent in 1966 to 201,532 jobs, considerably
smaller than *the job loss represented by the foreign trade deficit of the 128
industries.
`Since that report was published, employment and output data for that year
1967 have become available, as well as foreign trade data for the years 1968
and 1969. Our data `bank will `be updated with these additional statistics. As
is well-known, imports of manufactures continued to increase more rapidly
than exports during the years 1967 through 1969. These trends will increase the
job loss in labor-intensive industries and erase the balance of trade surplus in
favor of the capital-intensive manufacturing industries. We expect to release our
updated study in the near ftture.
I have selected a group of basic manufacturing industries adversely affected
by foreign trade developments in recent years and have updated the employment,
output, and foreign trade data for these industries. These cases illustrate the
basic fact that the United States favorable balance of trade in manufactured
products, which exceeded $5 billion as the decade of the 1960s opened, has
been sharply eroded by an average annual rate of growth of imports of manu-
factures nearly twice that of our exports. Some of our basic manufacturing
industries are suffering such a serious degree of import penetration that rising
unemployment and financial instalibility for many firms in these industries are
the consequences.
U.S. imports of `manufactures are growing at an average annual rate of 15%
nearly two and one-half times that of the growth of manufactured products in
the Nation's GNP at 6%. The import penetration of manufactured products
has doubled during the decade of the 1960s.
When U.S. imports are valued in accordance with the practice of virtually
all other developed countries, on their c.i.f. value, it will `be seen that the
value of imports in 1969 exceeded that of U.S. exports by $551 million. When
U.S. exports under the Foreign Assistance Act and Public Law 480' are sub-
tracted from our export statistics, the commercial trade deficit becomes $2.2
billion. `So far as U.S. manufactures are concerned, therefore, `the rising tide of
foreign trade `has not lifted all of the `boats. Those of the U.S. have been
left behind.
The dominant characteristic of U.'S. foreign economic policy as shown by this
experience is that it is underbalanced and operates unfairly on U.'S. manufactur-
ing industries by exposing them disproportionately to rising import competition
while retarding them disproportionately in their access to world markets.
Allow me to illustrate the effect of this inequity by sketching briefly the situa-
tion of selected `basic U.S. manufacturing industries.
THE STEEL INDUSTRY
U.S. imports of steel rose to 13.62 million tons in 1969, a 71% increase from
the period 1964-1965. Total growth of imports `averaged 18% per year, exceeding
the average rise in imports of all manufactures. In 1969. we had an unfavorable
balance of trade in steel of $843.5 million.
For the steel industry, the average ad valorem equivalent of the post-Kennedy
Round U.S. tariff is 6.9%, compared to 7.2% for the EEC and 9.6% for
Japan.
U.S. exports entering the EEC are subject to a `border tax. W'hen the double
effect of the imposition of the duty rate to the c.i.f. value and the imposition
of the border tax to the c.i.f. duty-paid value of U.S. exports is taken into
account, the ad valorem equivalent of these aggregate `border fees is found to
be 19.4%, in comparison with the total entry fees on German steel coming into
the United States of 6.9%.
In 1969, U.S. imports of steel accounted for 13.3% of U.S. consumption, up
PAGENO="0065"
3665
from 8.5% in the base period, 1964-1965. Under the impact of the import rise,
employment in the steel industry declined from an average of 657.3 thousand
workers in 1965, to 643.4 thousand in 1069, and to 636.1 thousand workers in
March 1970.
THE TEXTILE INDUSTRY
U.S. imports of textile articles rose to 3.6 billion equivalent square yards in
1969, a 102% increase from the period 1964-1965. Total growth of imports
averaged 26% per year, far exceeding the average rise in imports of all manu-
factures. In 1969, the United States had an unfavorable trade balance in textile
articles of $1.3 billion.
The average ad valorem equivalent of the post-Kennedy Round U.S. tariff on
textile products is 18.8%, compared to 10.6% for the EEC and 11.4% for Japan.
When the double effect of the application of the duty rate to the c.i.f. value and
of the application of the border tax to the cA.f. duty-paid value of U.S. exports
into the Common Market is taken into account, the ad valorem equivalent of
these aggregate border fees is found to be 23.3%.
There is little point in making a similar calculation in respect to Japan be-
cause U.S. textile products are virtually excluded from importation into that
country.
Imports in 1969 accounted for 10.6% of domestic consumption of textile ar-
ticles, compared with 7.1% for the first years of the application of the Inter-
national Cotton Textile Arrangements. Under the impact of the heightened import
rise, employment in textile mills and apparel plants declined from 2,419 thou-
sand workers in March 1969 to 2,371 thousand workers in March 1970.
THE FOOTWEAR INDUSTRY
The U.S. imports of footwear rose to 283.5 million pairs in 1969, a 72% in-
crease from the period 1964-1965. Total growth of imports averaged 18% per
year, exceeding the growth rate for imports of all manufacturers. In 1969, we
had an unfavorable balance of trade in footwear of $480.6 million.
The average ad valorem equivalent of the post-Kennedy Round U.S. tariff on
footwear is 11.1%, compared to 8.4% for the EEC and 10% for Japan. Exports
to Japan are impracticable for the reason previously stated. When the com-
bined effect of the use of the c.i.f. value and the imposition of border taxes to
the c.i.f. duty-paid value of U.S. exports to the EEC is taken into account, the
ad valorem equivalent of the EEC border charges is found to be 20.2%.
In 1969, U.S. imports of footwear accounted for 28% of U.S. consumption, up
from 16.9% in the base period. Under the impact of the import rise, employment
in the footwear industry declined from an average of 260.5 thousand workers
during the base period to 252.5 thousand workers in 1969, and to 243.8 thousand
in March 1970.
President Nixon has indicated he intends to pursue a preferential tariff sys-
tem for the benefit of less-developed countries. The U.S. position paper in that
matter indicated that the United States was prepared to enter into a system of
tariff preferences for developing countries which would set preferential duties
at zero but exclude from that preferential system textiles, shoes, petroleum, and
petroleum products.
THE CONSUMER ELECTRONIC PRODUCTS AND COMPONENTS INDUSTRIES
U.S. imports of radios rove to 38.1 million sets in 1969, a 128.4% increase
from the period 1964-1965. U.S. imports of TV receiving sets increased to 4.0
million sets in 1969, a 358% increase. In 1969, 49% of the radios and 77% of
the TV sets imported into the United States were received from Japan. The
value of imports of electronic components increased by 216% in 1969, compared
with 1964-1965.
The increase in imports of radio sets averaged 32% per year, of TV sets 89%
per year, of components 54% per year-all vastly in excess of the average rise
in imports of all manufacturers. In 1969, we had an unfavorable balance of
trade in radio and TV receiving sets and in electronic components of $741
million.
The average ad valorem equivalent of the post-Kennedy Round U.S. tariff is
7.6%, compared to 14% for the EEC and 12.4% for Japan, before any adjust-
ment is made in the foreign rates for the fact that they are applied to the
PAGENO="0066"
3666
c.i.f. value and that U.S. exports to the EEC are subject to the border tax, and
to Japan, to a commodity tax.
In 1969, U.S. imports of radios accounted for 73% of U.S. consumption, up
from 44% in the base period. U.S. imports of TV sets in 1969 accounted for
31% of U.S. consumption, up from 8% in the base period.
Under the impact of the import rise, employment in the industry producing
radio and television receiving sets fell from an average of 161.7 thousand
workers in 1966 to 153.2 thousand workers in 1969. Further, as the import rise
has intensified steadily through 1969, employment dropped in January 1970 to
137.7 thousand workers, compared with the peak January employment in recent
years of 175.2 thousand workers in January 1967. This intensification of the
recent trend in imports has also affected employment in the components industry.
In contrast to the consideration shown by the Executive Branch to the steel,
textile, and footwear industries, the electronic products industry has not been the
recipient of similar consideration. Its application for a partial withdrawal of
past tariff concessions so as to restore the tariff level to 25% ad valorem in
connection with the "open season" permitting such action in the latter half of
1969 under the provisions of Artic~e XXVIII of GATT, was rejected by the
Special Representative for Trade Negotiations.
Antidumping complaints covering TV receiving sets and the major classes of
electronic components were filed in late 1967 and early 1968. In each of the~e
cases, one or more of the Japanese manufacturers have been found at the staff
level of the Bureau of Customs to have dumped electronic products exported
to the United States. The Bureau of Customs accepted written assurances from
the Japanese manufacturers that dumping would not be practiced in the future.
Should these assurances be validated by the Treasury Department, and they have
in two cases-resistors and transformers, the Japanese manufacturers will have
been exonerated from long-continued dumping practices and relieved of the ob-
ligation to pay antidumping duties.
The Treasury Department seems not to understand the realities of the
Japanese marketing strategy for the U.S. market. This strategy encompasses the
following facts:
(a) Japan uses its financial resources to support expanded production on an
incremental pricing basis with the objective of buying increased shares of the
export market;
(b) This use of Japan's financial resources accepts low export prices, even
below cost, as a justification for enhancing future profit margins as increased
export market penetration supports ever-larger economies of scale in manu-
facture; and
(C) Japan's debt-levered pricing for exports constitutes "dumping" which is
exonerated by Treasury Department practices.
The gross inequity of U.S. tariff rates compared with those of Japan and the
EEC and the total ineffectiveness of existing U.S. tariffs to regulate the rate of
increase of imports of consumer electronic products and components have caused
the majority of the principal U.S. producers of these products to shift their pro-
duction overseas to low-wage nations in an effort to compete with Japan.
These offshore operations have been facilitated by the duty-free treatment
accorded "American goods returned" in the form of products assembled abroad
from U.S. manufactured components. At the request of labor unions who strangely
feel that the tariff policy for "American goods returned" rather than the basic
tariff inequity which I have described is chiefly accountable for the transfer
of production and jobs to foreign shores, the President has requested the Tariff
Commission to investigate the effect of the operation of this policy. The ranking
members of the Committee on Ways and Means have introduced legislation to
repeal these tariff provisions.
THE AUTOMOBILE INDUSTRY
U.S. imports of automobiles rose to 1,847 thousand automobiles in 1989. a 237%
increase from the period 1964-1965. Total growth of imports averaged 59% per
year, far exceeding the average rise in imports of all manufactures. In 1969, we
had an unfavorable balance of trade in automobiles of $2.4 billion.
As a result of trade agreement negotiations, the average ad valorem equivalent
of the post-Kennedy Round U.S. tariff on automobiles is 3%, compared with
11% for the EEC and 17.5% and 30% (depending on wheel base) for Japan.
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Under the 1965 United States-Canadian Automotive Products Agreement, motor
vehicles and parts move across the Canadian border free of duty. Imports from
Canada are expected to stabilize at about 700,000 units per year. The principal
growth in imports will come from Europe and Japan.
U.S. exports of automobiles to the EEC are further inhibited by the effect of
the unfair road taxes as well as the application of the tariff rate to the c.i.f.
value and of the addition of a border tax based upon the c.i.f. duty-paid value.
Access for U.S. automobiles to Japan is effectively denied not only by the high
tariffs but also by the imposition of a commodity tax, the application of the
tariff rates to the c.i.f. value, and the strict control of the use of foreign exchange
through the administrative guidance system.
In 1969, U.S. imports of automobiles accounted for 13% of U.S. consumption,
up from 6% in the base period. As domestically produced new car sales declined
in the latter half of 1969, influenced by the antiinflation program of the Ad-
ministration, automobile Imports continued to rise, contributing in major part
to the loss of 150,000 jobs in the transportation equipment industry in February
1970.
THE CERAMIC TILE INDUSTRY
Ceramic tile Is one of the comparatively rare industrial products to be spared
reductions in duty in the Kennedy Round. The ad valorem equivalent of the
U.S. tariff on ceramic tile is 23.5%, In comparison with an average rate of 8%
in the EEC and 5% in Japan. Notwithstanding this, U.S. imports continue to
rise. U.S. imports increased to 168.6 million square feet in 1969, a 24% rise from
the period 1964-1965.
In 1969, the United States had an unfavorable balance of trade of $38.1 million
in ceramic tile. In that year, imports accounted for 34.3% of U.S. consumption,
up from 30.7% in the base period.
In the structural clay products Industry, of which the ceramic tile industry
is a part, employment fell from an average of 69.5 thousand workers in 1964-
1965 to 64.6 thousand workers in 1969. By April 1970, employment bad declined
to 59.8 thousand workers.
THE INDUSTRY PRODUCING FLAT GLASS
U.S. imports of flat glass rose to 554.7 million square feet in 1969, a 19%
increase from the perIod 1964-1965.
Glass manufacturing is labor intensive. Tariff concessions granted by the
United States have reduced the average ad valorem equivalent of U.S. import
duties on flat glass to 7%, compared with 5.6% in the EEC and rates ranging
from 5% to 18% in Japan. Due to the c.i.f. basis for application of the foreign
rates, and the addition of border taxes, the effective ad valorein equivalent of
the EEC Import charges is 20% of the f.o.b. origin value of U.S. exports, com-
pared with the 7% fob. origin border imposts levied by the U.S. on European
glass.
In 1969, the United States had an unfavorable balance of trade of $60 million
in flat glass products. Imports in that year accounted for 23.3% of domestic
consumption. In the sheet glass sector, U.S. imports in 169 accounted for 28.1%
of domestic consumption, up from 24.4% in the base period.
Under the impact of the import rise, employment in the domestic industries
producing flat glass dropped in 1969 to 26.8 thousand, down from an average of
31.6 thousand workers for the base period. By March 1970, employment had
fallen to 24.1 thousand.
President Kennedy recognized that the U.S. tariff was too low. Following an
escape clause finding of serious injury by the Tariff Commission in 1961, the
President increased the tariff in 1962. In January 1967, President Johnson re-
duced the level of the escape clause rates. In December 1969, the Tariff Commis-
sion `issued a report in which three Commissioners found that the industry was
being seriously injured `and found, further, that the tariff should be restored to
`the pre-trade agreement level wthich is equivalent to 29.5% ad valorem. The
President rejected `their finding that an increase in'the tariff is required.
What `the Executive Branch of the Government `was willing `to do `by way of
forbearance for the ceramic `tile industry in maintaining an effective level of
duties in excess `of 20%, and what it has vigorously sought to do on behalf of the
steel, textile, and footwear `industries `through the negstiation of `restraints on
imports, It declined to do on behalf of the sheet glass industry.
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THE TEXTILE MACHINERY INDUSTRY
U.S. imports rose to $152.8 million in 1969, a 251% increase from the period
1964-1965. Total growth of imports averaged 63% per year, far in excess of the
average rise in import's of all manufactures. In 1969, we had an unfavorable
balance of `trade in textile machinery of $29 million.
The average ad valorem equivalent of the post-Kennedy Round U.S. tariff on
`textile machinery is 7.3%, compared with 5.2% for `the EEC and 7.5% for Japan.
When the EEC `tariff is adjusted `to a c.i.f. value basis and the weight of the
border tax is added, the average ad valorem equivalent of the `import charges
imposed on textile machinery exported from the United States to `the EEC is
found to be 16.3%.
In 1969, U.S. imports of textile machinery, on a value basis, accounted for
21.4% of U.S. consumption, up from 7.6% in `the `base period. Under the impact
of the import rise, employment in the textile machinery industry declined from
an `average of 44.2 `thousand workers in 1965 `to 41.7 thousand workers in 1969.
By March 1970, employment had declined to 38.7 thousand workers.
THE BICYCLE INDUSTRY
By 1969, the import volume `had increased `to 2.0 million bicycles, up nearly
100% from the period 1964-1965. Total growth of imports averaged nearly 25%
per year. In 1969, `the United States h'ad an unfavorable balance of `trade in
bicycles of $36.5 million.
The average ad valorem equivalent of the post-Kennedy Round U.S. `tariff on
bicycles is 10.3%, compared `to 17% for the EEC and 10% for Japan. U.S. exports
of bicycles `to Europe are subject to import charges averaging 30.9% ad valorem
when `the c.i.f. basis and `the `border tax are taken into account.
In 1969, U.S. imports of bicycles accounted for 27.7% of U.S. consumption, up
from 19.1% in `the ba'se period.
THE HARDWOOD PLYWOOD INDUSTRY
U.S. imports of hardwood plywood increased to 4.3 billion square feet in 1969,
a 110% `increase from the `period 1964-1965. Total growth of imports averaged
28% per year. In 1969, we had an unfavorable ba'lance of trade in hardwood
plywood of $245.9 million.
The average ad valorem equivalent of `the post-Kennedy `Round U.S. `tariff on
`hardwood plywood is 12.9%, compared with 13% for the EEC and 15% for Japan.,
The ad valorem equivalent of import charges applicable `to U.S. exports `of `hard-
wood plywood into `the EEC is 29.2% of the fob. origin value compared with the
U.S. tariff of 12.9%.
In 1969, U.S. imports of hardwood plywood accounted for 72.2% of U.S. con-
sumption, up from 53.4% in the base period. Under `the impact of the very high
`and rising level of import's, employment in the veneer and plywood industry, of
which `the `hardwood `plywood industry is a part, declined from 75.5 thousand
workers in 1965 to 73.6 thousand in 1969. From 75.3 `thousand workers in Decem-
ber 1968, employmerft dropped to 70.7 thousand workers in December 1969 an'd
t'o 68.5 `thousan'd workers in March 1970.
The a'bove indu'stries have been selected for discussion to illustrate `the `dilemma
of U.S. manufacturing industries wthich find that `their domestic market h'as been
opened up for unlimited access to foreign competitors while `the markets of those
competitors `have been substantially denied to U.S. exports.
The foreign economic policy issues which `have been exposed by `the discu'ssion
`a'nd analysis presen'ted in this statement are as follows:
1. The `selective exchange of well-defined m'arket opportunities in the U.S.
and foreign countries, which was the essence of Oordell Hull's reciprocal
`trade agreements proposal, has not been realized.
2. Because the trade `agreement authority conferred upon the President
was used as a species of foreign economic `aid rather `than as a commercial
instrument to benefi't American industries pan passu with foreign industries,
`the U.S. `share of world exports of manufactures has `declined, while foreign
industries' share of U.S. consumption `of manufactured `articles has increased.
3. With the currency for `bargainin,g reciprocal trade advantage on behalf
of the United States substantially dissipated by the essentially unilateral
na'ture of past tariff negotiations, the United States is in a very difficult
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3669
position to advance its own commercial interests in the 1970s because it
has little in `the way of bargaining power left `to use for such purposes.
4. The U.S. leadership/invincibility of U.S. export industries syndrome
that has dominated the judgment of U.S. negotiators throughout the postwar
era is contrary to the facts of international commercial life with which we
are faced today.
5. Contrary to the philosophy of foreign aid-oriented trade agreement
negotiating experts of the past two decades, the realities of international
commercial life are that U.S. industry does not possess any significant
technological advantage translatable into competitive cost advantages in
comparison with its foreign counterparts. The outlook for the 1970s is that
technologically dynamic, large-scale manufacturing enterprises in foreign
countries, substantially financed and enriched by technological know-how
by U.S. companies, will reap the economic advantage of the cost bias of
the lower standard of living of foreign countries and dominate world trade
in manufactured products. This dominance will extend to the progressive
diminution of the U.S. share of world trade in manufactured products,
and the continued and more rapid invasion of the U.S. market by foreign
industries. This process is already well advanced.
6. There has been no coherent and consistent policy for the support of
domestic manufacturing industries in this type of a contest comparable to
the close liaison and effective support which Japan and the developed
nations of Burope give their industries in competing for export markets.
The aggregate expression of the above-described issues in foreign economic
policy is that of a serious and pervading imbalance in our foreign economic
policy concepts and administration which obscures or ignores the valid interests
of domestic manufacturing enterprises and their employees.
RECOMMENDATIONS
My recommendation is that our foreign economic policy be significantly re-
structured with the objective of securing a balanced consideration of domestic
with foreign economic interests suitable for advancement in a strong and sus-
tained way of t'he general welfare of the people of the United States.
This advancement necessarily includes the creation of an economic climate
for the strengthened operation of a broad diversity of U.S. manufacturing enter-
prises within the United States; the protection and advancement of the inter-
ests of American workingmen, allowing them reasonable opportuni'ties for the
gainful utilization of the `broad range of native aptitudes and skills which
are characteristic of the American ~vorkingmen; and a due regard for the
continued fostering of the economic well-being of local manufacturing establish-
ments throughout the United States.
To accomplish these objectives, I make the following specific recommendations:
First, as to the trade agreement negotiating procedure. One of the fundamental
defects in the past has been that the people who in fact make the policy decisions
as to what will be negotiated and bow it will be negotiated are not the persons
who hear the representatives of domestic industry who come to present their
case. With some limited exceptions, the hearing is conducted by an interagency
panel of middle level civil servants who are not policymakers, and who sum-
marize what they hear-and that summary may or may not be considered by
the policymakers. Therefore, my first recommendation as to the trade agreement
negotiating procedure is that those who make policy and negotiate the decisions
also take the trouble directly to hear domestic interests in advance of the
negotiations.
Secondly, the United States Government must at long last reject the curiously
ambivalent view it has of domestic indUstry that forces it to hold industry
representatives at arm's length throughout the course of the negotiations. We
are the only developed country in the world that does not have available to its
negotiators accredited industry `advisers during `the course of the negotiations,
and this is a reform that is long overdue.
Second, as to the antidumping and countervailing duty remedies. Had these
remedies been utilized as intended by the Congress, they might have prevented
the abrupt shift in our `balance of trade in 1967, 1968, and 1969. The antidumping
and countervailing duty remedies are a snare and a delusion and wholly un-
successful. They waste the time and effort that industries devote to the occasional
attempts to invoke their provisions.
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.3670
Apparently on the basis of an informal accommodation made by our Govern-
ment with J~apan in trade agreement negotiations in the 1950s and In the 1960s,
and implemented by an informal commitment in the Kennedy Round, our nation
displays special solicitude for dumping by Japan. The result is that the people
who handle antidumping investigations are insensitive to the actual commercial
realities of the problem. All doubts in dumping investigations are resolved in
favor of the Japanese. Should perchance a finding of dumping slip through
this process, the Treasury Department has almost uniformly in the past
promptly accepted written assurances from the Japanese manufacturers not
to continue the dumping. On the basis of those assurances, the dumping in-
vestigations have been terminated.
This practice has exonerated virtually all dumping by Japanese manufacturers
in the past. It has provided no relief for the future. It is an abominable system.
It has been strongly crticized by domestic industries.
Two weeks ago, on May 27, the Treasury Department published a revision
of its procedures in regard to the discontinuance of antidumping investigations.
Henceforth, dumping investigations will be concluded on the basis of written
assurances from the foreign manufacturers only when the margin of dumping
is considered minimal in relation to the total volume of sales involved. In an-
nouncing the change in Treasury's antidumping policy in accepting price as-
surances, Assistant Secretary of the Treasury Rossides stated that the past
practice "allowed foreign exporters to undercut the prices of their tJ.S. com-
petition in American markets without undue concern for the possible con-
sequences under the Antidumping Act."
Domestic industries welcome this change in practice by the Treasury Depart-
ment. However, in response to the Kennedy Round antidumping code, the
Treasury Department changed the date from which appraisement of import
entries is withheld in a dumping investigation. Under the Antidumping Act,
1921, and the Customs Regulations issued thereunder, the withholding of
appraisement applied to import entries commencing on a date four months
prior to the date on which the dumping complaint was filed. Currently, the
withholding of appraisement applies to import entries on and after the date
the notice is published. On the average, the difference of more than a year in time
is involved in this change in practice.
The foreign manufacturers involved in dumping investigations are notified
by the Bureau of Customs prior to the publication of the notice of withholding.
This gives them an opportunity to change their prices at the time the notice
of withholding of appraisement is published.
The significance of this practice under the Kennedy Round antidumping code
is that a foreign manufacturer in reality will never be subject to the penalty
of dumping duties for the imports which come into the United States at dumping
prices. If and when the foreign manufacturer is caught in the act of dumping,
the shifting of the effective date of the withholding of appraisement exonerates
the foreign manufacturer from all dumping penalties up to the date of the notice.
The manufacturer obviously will change his price as of the date of the notice
of withholding.
As a result of the U.S. acceptance of the Kennedy R~ound antidumping code,
and Treasury's change in its dumping regulations pursuant to the code, the
antidumping remedy has been converted into a shield to protect foreign manu-
facturers who engage in dumping, rather than a sword to strike down the
practice. In my opinion, the type of change which Treasury made in the dump-
ing regulations in response to the Kennedy Round antidumping code is a viola-
tion of the intent of Title II of Public Law 90-634 which instructed the Secre-
tary of the Treasury to take the prc visions of the code into account "only
insofar as they are consistent with the Antidumping Act, 1921, as applied by
the agency administering the Act."
Prior to the code, Treasury, the agency administering the Act, applied the
provisions of the Antidumping Act so as to withhold appraisement from a date
commencing four months prior to the filing of the complaint. Now it has changed
that practice to the detriment of domestic industry. This is the type of change
which it was forbidden to make by the Congress.
As for the countervailing duty remedy, the Treasury Department has not had
the fortitude to administer the countervailing duty statue since the emergence
of practices in Europe on a widespread basis of remitting internal taxes on
imports. Under the decisions of our Supreme Court, the remission of tax is
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clearly a bounty or grant which should automatically be checked by the imposi-
tion of countervailing duties. The practice is so widespread that if the Treasury
Department tried forthrightly to administer the statute in accordance with its
intent, countervailing duties would be imposed on virtually all manufactured
imports from Europe and from Japan.
The unwillingness to face up to the dimensions of the abuse of our foreign
trade rights under GATT and other agreements, and the mandatory duty
which rests upon the Treasury Department, should not excuse that Depart-
ment, which is primarily concerned with our balance of payments deficit,
from now beginning to act more realistically in the administration of that
remedy.
Third, as to the escape clause. The escape clause is incorporated into GATT.
Article XIX of GATT uses language patterned after the escape clause in use
in this country prior to the Trade Expansion Act of 1962. The Administration
then in power urged an amendment of our domestic escape clause, which imposed
a much more severe test than that in the GATT escape clause, and by that very
act, freely gave away rights which we hold under GATT, which we bargained
for at the time GATT was negotiated.
It is a commonplace fact that the 1962 tariff adjustment provisions will not
work. The Administration's bill now before the Congress, H.R. 14870, which
on its surface seems to reform those provisions, would create a condition in
which the burden of proof to be carried by domestic industries is even heavier
than that under the present impossible escape clause.
Under the present statute, a domestic industry must prove, as the second burden
of proof, that increased imports are the major factor in causing it serious injury.
This means that an industry must attempt to come up with quantitative proof
showing that imports represented 51% or more of the causation.
The Administration's bill would require that the domestic industry prove that
increased imports are the principal cause of serious injury. Now, in order to
demonstrate that one of a number of causes is the principal cause, you must be
able to provide some quantitative measurement of all the causes, line them up
in an array of some magnitude, quantitatively, and demonstrate that increased
imports constitute the largest, quantitatively, of all of the various causes. This
would so increase the burden of proof in escape clause cases that the condition
of domestic industries suffering from import injury would be worse after the
amendment of the escape clause than at present.
A preferred approach is that set forth in Title II of your bill, Mr. Chairman,
H.R. 16920, which provides the same standard of economic morality for indus-
tries as it does for labor unions; namely, the burden of proof to be met for relief
is that increased imports have been a substa'i~tial ca~&se of serious injury. The
GATT escape clause only requires proof that the increased imports have caused,
in whole or part, the serious injury-it need not be the major cause, nor even be
the principal cause.
But these are technical matt~rs. The major flaw in the escape clause is this:
Congress has provided an expert body, an independent agency, which, but for
the seven-year terms of its commissioners, is not directly subject to guidance
by the political philosophy of the Administration in power. It is, therefore, for
the long term more likely to be a consistent finder of facts than some branch of
the Executive Department that must respond to the policy imperatives of the
President.
The Tariff Commission, as an expert body, by statute makes findings to deter-
mine whether increased imports have caused or threaten serious injury and,
under the statute, aso makes a finding as to the amount of tariff increase or
imposition of quotas required to correct the injury.
The vice of the present system is that after that expert body carefully con-
ducts an exhaustive investigation, including public hearings, and makes its find-
ing, the finding goes to the Executive Branch where it is virtually ignored.
During the public hearings, the domestié industry representatives are subjected
to cross examination by anybody that chooses to enter the case, and this usually
includes representatives of at least five foreign countries.
The apparatus for trade policy within the Executive Branch is such that
every Department, in its foreign trade policy side, feels absolutely free to con-
sider and find the facts afresh, as though the Tariff Commission had never given
the matter consideration. In doing so, they conduct ex parte conferences with all
of the interested parties who are anxious to overturn the finding of the Tariff
Commission.
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The result is that, in those few instances where the Tariff Commission has
found injury from imports, the Office of the Special Representative for Trade
Negotiations, fronting for an interdepartmental group, has recommended that
the President not do what the Tariff Commission recommended. The Commerce
Department is believed to be the only member of the interdepartmental group
which has ever voted to accept the recommendations of the Tariff Commission,
when it has found injury.
In antidumping proceedings, in those instances where the Treasury Depart-
ment makes a finding of dumping and the case goes to the Tariff Commission,
and the Commission finds injury, that finding is sejf-executing under the law. The
Trade Relations Council recommends that the findings of the Tariff Commission
in escape clause cases also be self-executing, and be implemented automatically by
the Secretary of the Treasury, just as in antidumping cases.
With the reform of the escape clause, there would be some possibility that ad-
justments could be made in the level of imports affecting major industries, so
that some beneficial effect could be preserved in our trade interests for domestic
employment and for our balance of payments.
Fourth, as to the role of the Commerce Department in foreign trade policy.
The Commerce Department has an insufficient role in foreign trade policy at this
juncture. Among the Cabinet agencies, it is the most expert body to weigh and
evaluate the force of influences in the foreign trade of the United States. It has
the strongest interest to do so; yet, it has only one voice out of eight in the legal
voting apparatus of the interdepartmental group, and it has no chance for its
views to come before the President as the advice of his most expert Cabinet
adviser on industry matters.
Therefore, we recommend that there be established a Foreign Trade Board
within the Executive Branch under the chairmanship of the Secretary of
Commerce, with membership for the Secretaries of Agriculture, Interior, and
Labor. These are the Cabinet officers directly concerned with domestic matters,
ani with the impact of foreign trade developments on the domestic economy.
Let that Foreign Trade Board articulate and present directly to the President a
recommendation on foreign trade policies. Then let the Secretary of State arid the
Office of the Special Representative present their own views separately to the
President. In that way those Cabinet officials with a Constitutional responsi-
bility for every segment of our domestic economy will have a direct channel to
the President and an authoritative way of being heard.
SUMMARY OF RECOMMENDATIONS
In summary, therefore, the Trade Relations Council recommends:
1. Enactment of HR. 16920 with amendments to Title II to accomplish the
following:
(a) Make the findings of the Tariff Commission in escape clause cases
final and self-executing.
(b) Establish a Foreign Trade Board within the Executive Branch
under the chairmanship of the Secretary of Commerce with membership
for the Secretaries of Labor. Interior, and Agriculture, with jurisdiction
to advise the President directly on foreign trade matters reserved by
statute for the decision of the President.
2. Amendment of the Antidumping Act so that the withholding of appraise-
mnent extends to imports entered from a date four months prior to the date
upon which the antidumping complaint is filed with the Secretary of the
Treasury.
3. Amendment of the countervailing duty statute to require that the Secre-
tary of the Treasury impose countervailing duties on all imports which have
received the benefit of the remission of value added and other internal taxes
in the country of origin.
The CHAIRMAN. Thank you, Mr. Stewart., for your very fine state-
ment and your excellent delivery of it.
WTe appreciate very much your bringiug these views to the commit-
tee. I know they will be helpful to us.
Are there any questions?
Mr. Sehneebeli?
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3673
Mr. SCHNEEBELI. Mr. Stewart, I think we all agree you have given
us a very hard-hitting statement. It certainly seems to be supported
by the facts and very good logic. It was an excellent presentation but
that is what we have come to expect of you. You have done such a
good job up to this point and you continue to do a good job.
I am very happy you gave us some specific ideas because we get a
lol of generalizations. Your specific recommendations seemed to be
very sound and we appreciate very much your coming to the com-
mittee. It was a very fine statement.
Mr. STEWART. Thank you, Mr. Schneebeli.
Mr. SCHNEEBELI. Thank you, Mr. Chairman.
The CHAIRMAN. Are there any further questions?
If not, again we thank you, Mr. Stewart.
Mr. STEWART. Thank you, sir.
The CHAIRMAN. We appreciate you gentleman accompanying him
to the table.
(The following was received for the record:)
LINCOLN & STEWART,
Washington, D.C., June 19, 1970.
Hon. WILBuR D. MILLS,
Chairman, Ways and Means Committee,
House of Representatives, Washington, D.C.
DEAR MR. Mrr~~s: In my testimony before your Committee on foreign trade
legislation on behalf of the Trade Relations Council of the United States, I pre-
sented recommendations which included the "amendment of the countervailing
duty statute to require that the Secretary of the Treasury impose countervail-
ing duties on all imports which have received the benefit of the remission of
value added and other internal taxes in the country of origin." In support of that
recommendation, in my testimony I stated that, "Under the decisions of our
Supreme Court, the remission of tax is clearly a bounty or grant which should
automatically be checked by the imposition of countervailing duties."
It may be helpful to you and the Committee to have a citution to the Supreme
Court cases which I had in mind in making the above statement. You will ap-
preciate that the key terms in the countervailing duty statute, Section 303 of
the Tariff Act of 1930, are those emphasized in the following quotation from the
statute:
"Whenever any country 0 * shall pay or bestow, directly or indirectly, any
bounty or grant upon the manufacture or uroduction or export of any article or
merchandise 0 * 0, then upon the importation of any such article or merchandise
into the United States, * whether such article or merchandise is imported
in the same condition as when exported * * or has been changed in condition
by remanufacture or otherwise, there shall be levied and paid, in all such
cases * * an additional duty equal to the net amount of such bounty or grant,
however the same be paid or bestowed." [Emphasis added] (19 U.S.C. 1303)
Before discussing the Court cases, a brief treatment of the legislative history
of the countervailing duty statute is in order.
A. THE TARIFF ACTS OF 1890 AND 1894
Countervailing duties were first imposed by the Tariff Act of 1890. They were
limited to imports of sugar from countries paying a bounty on exports. It is evi-
dent from the legislative history, and the considerable history of the payment
of export bounties on sugar, widely practiced in the latter part of the 19th Cen-
tury and the early part of the 20th Century, that the provisions of the Tariff
Act of 1890 were specifically limited to the imposition of a specific additional
duty on sugar exported to the United States where a cash bounty on the expor-
tation had been paid directly by the government concerned to the exporter of
the sugar. See Congressional Record, Sept. 27, 1890, p. 10576, and Sept. 30, 1890,
p. 10712.
This specific countervailing duty on sugar was carried forward into the Tariff
Act of 1894. The legislative history of that Act makes it abundantly clear that
46-127 0-70-pt. 13-5
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the object of the duty was sugar "imported from countries that pay an export
bounty on their sugar." [Congressional Record, July 19, 1894, p. 7711]
B. THE TAIUFF ATP OF 1897
In the Tariff Act of 1897, for the first time the counterv~ii1ing duty provision
was made general, though it is evident that the legislators continued to have the
export bounties paid by foreign countries on sugar primarily, if not exclusively,
in mind. [Congressional Record, July 2, 1897, pp. 2203, 2225; see generally pp.
2203-2226]
The legislative history of the 1897 Act shows that the bounties paid by foreign
governments on sugar exported to the United States were definite; liquidated
amounts per pound. [Ibid., pp. 2203-5; 2220-1]
The fact that the sole concern of the Congress was the export bounties paid
on sugar imported into the United States is important. Knowing that Congress
bad in mind the direct payment by foreign countries of a specified sum per pound
of sugar exported to the United States, we can more readily construe the words
which Congress used in the 1897 Act,
"pay or bestow, directly or indirectly, any bounty or grant upon the exports
of ~ny article or merchandise."
These words were carried forward into the Tariff Act of 1930 virtually
unchanged.
"Pay * * * any bounty e * C upon the exportation" meant to the Congress
which chose those words the payme.nt at the time of exportation of a sum cer-
tain on each unit of the merchandise exported. Further evidence of the dominant
role which the sugar export bounties played in the formation of the Congressional
purpose in 1897 is offered by the fact that during the debate prominent attention
was given to the agreement reached by the United States and other countries in
the International Sugar Conference of 1888 that the export sugar bounties paid
by foreign countries could be countervailed by the United States. [Ibid., p. 2218]
The practical necessity for the departure trom the specific countervailing duty
of one-tenh of one cent per pound provided in the Acts of 1890 and 1894 was the
action of Germany in 1890 of increasing its export bounty on sugar by 100 per-
cent. [Ibid., p. 2218] Germany's action was quickly followed by other European
producers in establishing or increasing their export bounties on sugar. [Ibid.,
p. 2221] The effect of the bounties paid on exports of sugar was a reduction in
the prices charged for sugar in international trade. The purpose of the bounty
was to enable the bounty-paying countries to dispose of their surplus sugar out-
put in the world market at prices considerably below their home market prices.
[Ibid., pp. 2222-3]
The advocates of the 1897 Act understood that the payment of a specified
sum per unit of product exported enabled that product to be sold to the United
States at an unfair advantage over domestically produced sugar. They intended
that the countervailing duty provision prevent this from occurring. Thus, Senator
Caffery of Louisiana stated during the debate:
"* * * ~ say, therefore, that in the keen competition of the world in the matter
of sugar production an export bounty of 38 cents a hundred given by one country
to give it superior advantages over another will enable it to destroy the products
of its rival in the same line, and that is the ground upon which I put my
action." [Congressional Record, July 2, 1897, p. 2224]
The legislators also understood that the unfair advantage conferred by the
payment of a bounty on exports resulted from the lowering of the foreign pro-
ducer's cost of production by his receipt of the bounty payment. Senator Chandler
of New Hampshire spoke to this point in his strong advocacy of the counter-
vailing duty provision:
"It is manifest that if protection is to be accomplished by imposing duties in
the United States upon foreign products that shall equalize conditions of pro-
duction to the home producers of any article of merchandise, and a particular
duty is imposed for that purpose, or as one of the objects of imposing it. and in
any foreign country an caport bounty shall be paid upon~ that article, then the
cost to the foreign producer as against the honie producer is reduced just so
much, and the equalizing of conditions has failed. (Emphasis added)
"Apply the principle in this case. Manifestly if there is an export bounty upon
German sugar. then the producer of German sugar has an advantage over every
producer of sugar in every other country who wants to send it to the United
States." (Congressional Record, July 2, 1897, p. 2224)
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Even the opponents of the countervailing duty provision conceded that it was
directed against the specific bounty payments made by foreign governments to
their exporters of sugar. Senator Lindsay of Kentucky, an advocate of a tariff
for revenue but not for protection, declared:
"It is protection pure and simple, and it is resorted to for no other purpose,
and can be explained upon no other hypothesis, than that it is to protect the
American sugar industry against the unfair competition of the foreign sugar
raisers who receive a bounty of 28 or 38 cents a hundred upon the exported
sugars." (Congressional Record, July 2, 1897, p. 2225)
C. SUMMARY OF THE 1897 5TATUTE
The legislative history of the basic countervailing duty provision of law, as
adopted in 1897, shows that Congress had a specific. and definite understanding
of the type of conduct they wished to reach by the language chosen. They had
the following conditions in mind:
(1) The "article or merchandise" was sugar;
(2) The bounty or grant consisted of the payment of a definite sum of
money per unit of product exported [28 to 38 cents per hundred pounds of
sugar];
(3) This payment was made to the exporter at the time of the
exportation;
(4) This payment was in fact received by the exporter and thereby
lowered his cost of production on the merchandise exported;
(5) As a result, the exporter was able to lower and did lower the price
of the merchandise for export, giving him an unfair competitive advantage
over U.S. producers,
D. THE TARIFF ACTS OF 1913, 1922, AND 1930
The countervailing duty provision of the 1897 Act was carried forward virtually
unchanged into the Tariff Act of 1913. [H. Rept. 5, 63d Cong., 1913, pp. XLI,
LII There was very little debate on the provision, and the remarks made in-
dicated that it was still intended by the Congress as a remedy against bounties
paid on exports of sugar to the United States. By 1913, Russia had replaced
Germany as the worst offender. [Congressional Record, May 7, 1913, p. 1336]
The provision was carried forward into the 1922 Tariff Act with minor amend-
ments making it applicable to bounties or grants on manufacture or production,.
as well as on exports. This was not deemed to be a change in substance. Bounties
paid by private persons and organizations were made subject to the Act.
[Congressional Record, April 24, 1922, p. 5874]
The Tariff Act of 1930 carried forward the countervailing duty provision with
the main substance of the 1897 Act still intact. An amendment was added au-
thorizing the Secretary of the Treasury to estimate the net amount of the bounty
or grant. [H. Rept. 7, 71st Cong., 1929, p. 159]
Since the main structure and language of the 1897 statute are contained in
Section 303 of the Tariff Act of 1930, the meaning given to the words used by
the Congress in 1897 remain a vital part of the interpretive tools of the present
statute.
During the debate on the 1930 Tariff Act in the Senate, an exchange took
place which throws some additional light on the understanding of that Congress
of the meaning of the term "bounty or grant." During the consideration of the
specific duty provided in the tariff schedules for maple sugar and maple syrup,
Senator Harrison offered an amendment which would have lowered the rates.
His contention was that the rates in the bill before the Senate had been in-
creased in the Committee of the Whole on the ground that Canada imposed a
bounty on the production of maple sugar and maple syrup. Senator Harrison
took the position that no such bounty existed in fact; therefore, he wanted the
rates of du.ty reduced. (Congressional Record, March 14, 1930, p. 5271)
Senator Smoot. in charge of the bill for the Committee, acknowledged that
there was not a direct bounty, "but what amounts to a bounty." (Ibid., p. 5271)
Senator Dale, also a member of the Finance Committee, interposed to state:
When the bill was under consideration, dealers in maple products did
state before the committee that there were inducements made by the Cana-
dian Government under which the producers of sugar were greatly helped.
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That is what they call a bounty. * * This letter is from the Canadian
legation, and goes on further to state:
"It is desired to point out that the activities and cooperation extended
to the maple-sugar industry by the provincial authorities of the Province
of Quebec is solely for the purpose of improving the quality of the products
of that industry, particularly with a view to the production of grades
lighter in color."
Of course we concede that, but it has the same effect. They state in that
very letter that the Government is helping the producers, and they give the
reasons for the help; but that reason does not change the fact. It has the
same effects as a bounty. (Emphasis added)
(Senator Dale referred to documents in the Committee's possession estab-
lishing that the Province of Quebec had given loans and bonuses to producers.)
They may not be bounties, but they are loans and bonuses, and this is
exactly what the officials of Canada say they are doing. Taken with our low
duty, that is largely the reason why the importations of maple sugar have so
greatly increased and why the production on this side of the line has de-
creased." (Congressional Record, March 14, 1930, p. 5273) (Emphasis
added).
Senator La Follette then suggested that if it were to be assumed that the
governmental grants and loans made to the Canadian maple sugar producers
were a bonus or bounty, the countervailing duty provision of the bill (present
Section 303) would be relevant. He promptly stated his opinion, however, that
the moneys expanded to improve the quality of the Canadian products were not
a bounty or grant. Subsequently, Senator Fess stated:
I also recall what the chairman of the committee stated. He used the word
"bounty," but if there is assistance afforded under a different name than
bounty, of course the result would be the same. I take it for granted, how-
ever, that there is no bounty granted, according to the technical meaning
of the word. (Emphasis added)
"Mr. HARRISON. Absolutely not.
"Mr. PESS. I think that is correct."
(Congressional Record, March 14, 1930, p. 5274)
Thereafter, the Senate retained the high rates of duty which the Committee
had premised upon the fact of the payments made to Canadian producers by
the Province of Quebec. In view of the reference to the countervailing duty pro-
vision of the bill during the debate, and the colloquy, above quoted, indicating
the opinion of those playing a leading role in the debate that the bonuses and
loans did not satisfy the technisal meaning of the countervailing duties statute,
this legislative action shows that not every payment of moneys to foreign pro-
ducers by their government can be considered the payment of a bounty which is
subject to countervailing duties. And this is true even though the bonus payment
program may, as in the case of maple sugar and syrup, stimulate increased
exports to the United States.
This insight into the understanding of the 1930 Congress of the term bounty
or grant paid upon e~vperts is instructive in the Committee's consideration of the
efficacy of the countervailing duty statute. It shows that something more than
the payment of moneys by the government to foreign manufacturers is required
to bring the action within the provisions of the countervailing duty statute, even
though such payments are accompanied by increased exports to the United
States.
JUDICIAL INTERPRETATION OF THE LAW
Against this background of legislative history, let us consider now the judicial
interpretation of the countervailing duty statute.
"Bounties" exist for many purposes. Those paid upon exports are but one of
the many uses of bounty payments by governments to achieve public purposes.
The Supreme Court defined the term, subsequent to its use in the Tariff Act of
1897, as follows:
Bounties granted by a government are never pure donations, but are al-
lowed either in consideration of services rendered or to be rendered, objects
of public interest to be obtained, production or manufacture to be stimu-
lated, or moral obligations to be recognized. Smith v. Allen, 173 U.S. 389,
402.
Establishing the fact that a bounty has been paid does not, therefore, dispose
of the issue presented in a countervailing duty case. It would be necessary to
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go beyond the mere finding that a bounty has been paid and to determine for
what purpose the bounty is paid.
The countervailing duty statute requires that the bounty be paid or conferred
upon production or ewportation. The specific meaning given those words by the
statute is that the bounty is upon the production or exportation of an article
when it is paid to the producer who exports it, under circumstances where the
amount of the bounty is measured by the number of units exported.
The Supreme Court construed the countervailing duty provision of the 1897
Tariff Act in Downs v. United States, 187 U.S. 49G; At issue was Russia's export
bounties on sugar. The Court discussed the general meaning of the word "boun-
ties," apart from its statutory context. It found that "bounties" may be:
Direct, as "where a certain amount is paid upon the production or exportation
of particular articles" [e.g., U.S. sugar bounties and customs drawback]; or.
Indirect, as `~by the remission of taxes upon the exportation of `articles which
are subjected to a tax when sold or consumed in the country of their produc-
tion" [e.g., the U.S. remission of internal revenue taxes on distilled spirits which
are exported]. [187 U.S. at 502]
In the Downs case, the Court found that the Russian exporter of sugar ob-
tained a certificate from the government upon exportation of sugar, solely be-
cause of the exportation. These export certificates had monetary value in the
markets of Russia. That monetary reward was held by the Court to be a bounty
requiring the imposition of countervailing duties.
In Nicholas & Co. v. United States, 249 U.S. 34, the Supreme Court had occa-
sion to construe the countervailing duties section in the 1913 Tariff Act. Whiskey
and gin imported from Great Britain with the benefit of a monetary allowance
paid on each gallon of exported spirits were involved. The Court stressed that
the essential requirement of the countervailing duty statute was a conferring
of something by a country npoa the enportation of an article or merchandise.
The Court laid down the rule that `two things must be considered in determining
the applicability of the countervailing duty statute:
1. The fact that the grant is made at the time of exportation and only
upon exportation, * * *
2. The event, that the spirits may be sold cheaper in `the United States
than in the United Kingdom, and necessarily there may be that aid to their
competitive power. (Emphasis added) (249 U.S. at 39)
The Court held that the monetary allowance granted at the time of exporta-
tion on each gallon of spirits exported vas the payment of a bounty upon ex-
portation which, under the statute, was subject to countervailing duties. It
stated:
We have the fact of spirits able to be sold cheaper in the United States
`than in the place of their production, and this is the result of an act of gov-
ernment because of the destination of the spirits being a foreign market. For
that situation [the statute] was intended to provide. (249 U.S. at 39, 40)
The several decisions of the U.S. Court of Customs and Patent Appeals constru-
ing the countervailing duty statutes add'~ nothing of substance to the principles
developed by the Supreme Court in the cases discussed above. An actionable
bounty under the countervailing duty statute must be capable of ascertainment
in relation to the number of units comprising the particular exportations deemed
to be subject to the Act. See Franklin Sugar Refining Co. v. United States, 1 Ct.
Cust. App. 242, and United States v. Franklin Sugar Refining Co., 2 Ct. Cust. App.
110. Those cases involved the bounty paid by Germany of 2.5 and 2.4 Marks per 100
kilograms of sugar exported. The issue was whether the bounty (and, hence, the
countervailing duty) should be computed `on the basis of the export weight, or
on the weight found at the time of importation (sugar being subject to some
shrinkage in transit). The court found the latter to be the correct weight.
In Nicholas ~ Co. v. United States, 7 Ct. Oust. App. 97, aff'd, 249 U.S. 34, the
court declared that the "plain, explicit, and unequivocal purpose" of the counter-
vailing duty statute [there, the 1913 Act] is as follows:
Whenever a foreign power or depen'dency or any political subdivision of a
government shall give any aid or advantage to ecvporters of goods imported
into this country therefrom whereby they may be sold for less in competition
with our domestic goods, to that extent by this paragraph the duties fixed in
the schedule of the act are increased. It was a result Congress was seeking to
equalize regardless of whatever name or in whatever manner or form or for
whatever purpose it was done. (Emphasis added, except for "result") (7
C.C.P.A. at 106)
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This forceful construction of the statute emphasizes two bask prerequisites
for the application of countervailing duties. These prerequisites are as follows:
(1) the `said or advantage to exporters' and (2) the requirement that the exported
goods may be sold for less in competition with U.S. goods as a result of the
conferring of the "aid or advantage to exporters" by the challenged government
policy.
The court has followed its Nicholas cC Co. decision in later cases construing
the countervailing duties provision in the Tariff Act of 1930. F. W. Woolworth
Co. v. United States, 28 C.C.P.A. (Customs) 239, 249; Robert E. Miller ci Co.,
Inc. v. United States, 34 C.C.P.A. (Customs) 101, 105. Export prices below home
market prices are not necessarily the result of the conferral of a bounty or grant,
if a difference in quality in the product sold in the two markets contributes to the
difference in price. Energetic Worsted Corp. v. United States, 53 C.C.P.A. (Cus-
toms) 36, 45, CAD. 874.
The court's decisions in Nicholas, Woolworth, and Miller, supra, establish that
the changes in language which have occurred in the statute since 1897 have not
changed Its meaning. Therefore, the Supreme Court decisions discussed above
continue to be the authoritative construction of the statute.
SUMMARY OF JUDICIAL INTERPRIFIATION OF THE LAW
Under the settled judicial construction of the countervailing duty provision,
the conditions which must be found to exist as a prerequisite to the assessment
of countervailing duties exist in regard to the remission of Internal taxes by
foreign countries (for example, the countries of the European Economic Com-
munity) on exports to the U.S.:
(1) The benefit extended by the foreign government in the form of remission
of Internal taxes is uniformly conferred on exporters;
(2) The payment of the benefit is made at the time of exportation or solely
because of the exportation; and
(3) The benefit conferred in the form of a remission of internal taxes enables
the exporters to sell products to the United States below the price at which such
articles are available in the country of origin.
CONCLUSION
The practice of foreign countries, including the countries of the European
Economic Community, in remitting internal taxes on exports destined to the
United States is clearly equivalent to the payment or bestowal of a bounty or
grant directly or indirectly upon the exportation of articles for importation into
the United States. Consequently, within the letter and intent of the judicial inter-
pretation of the countervailing duty statute, countervailing duties may validly
be imposed on such imports.
Respectfully submitted,
EUGENE L. STEWART,
General Counsel, Trade Relations
Council of the United States.
The CHAIRMAN. Our colleague from Nebraska, the Honorable Dave
Martin, will be the next witness before the committee today. We are
glad to have you with us; you may proceed with you statement.
STATEMENT OP HON. DAVE MARTIN, A REPRESENTATIVE IN
CONGRESS PROM THE STATE OP NEBRASKA
Mr. MARTIN. Mr. Chairman and members of the committee, I thank
you for the opportunity to appear before you today on the subject of
amending the law relating to limitations on meat imports, as proposed
in H.R.. 6516, which I introduced and sponsor in this Congress.
I urge the swift approval of this legislation in the interest of pro-
tecting the American livestock producer, individually and collectively,
and to preserve this industry as `a completely independent segment of
our American economy.
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As members of the committee know, from information compiled by
the Department of Agriculture, imports of beef have `a definite rela-
tionship to the price of cattle in the United States. American cattle-
men are the last free and completely independent segment of our
American economy. They do not want Government controls, nor do
they want price supports. And yet, if current trends of imports of
beef into the United States `are continued in fu'ture years, it is almost
a certainty that Government programs will be initiated to regulate the
production of meat in the United States, `and provide `another costly
price support `and subsidy program.
I feel `strongly that the American cattlemen `are entitled to protec-
tion from foreign imports by our Government. Not only are they en-
titled to this, but they need such protection now if they are to succeed
in the years ahead. We know that the American livestock producers are
capable of producing the meat that is needed and th'at will be needed
for consumption in the United States in the years ahead. But, if they
are continually made to compete with va'st foreign imports of meats,
they cannot be expected to `be `able to continue to produce. Where they
now have the capacity `to expand as consumption expands, to meet the
test of supply and demand, they will not be `able to do so if they are
gradually priced out of business by foreign imports.
Mr. Chairman, imagine if you will, the possibilities of the long-
range effect the'se stepped-up imports of beef might `have on the United
States. As American cattlemen have to fight the price wars of cheaper
produced foreign meat imports, more and more will go out of business.
As more `and more go `out of business, and `as U.S. production of meat
decreases, foreign imports will inôrease-at least they will have to in-
crea'se to meet the need. And, `as more and more imports come in, more
and more American producers will be priced out of the market.
But, `then what is to happen? Can we sit `here today and say th'at
foreign countries `currently importing meat into the United States will
be able to `supply the total market we now have, `at reasonable prices?
`Will `the foreign countries be able; for instance, to supply beef to the
United States `at `a rate of more than 23 billion pounds this year, `and
25 billion pounds by 1972, `and 30 to 35 billion pounds by 1980? Can we
honestly `believe that these foreign countries `alone can `supply `such
meat to the United `States, while `at the same time their own consump-
tions and demands are increasing? And, if so, at what price will this
meat, certain to be in mu'ch more `demand by 1980, be selling for in
the United States?
Mr. Chairman, I pose these questions which now hardly seem rele-
vant, because they are very real questions we should consider before
we continue to give licensure to foreign imports of meat that threaten
this very important industry in the United States. It is time that we
give first consideration to American industry and to the American
taxpayers rather than consideration~of our image in the eyes of foreign
countries, particularly when this well-meaning intention of ours may
well have a boomerang effect on our country `by result of our inability
to provide our own food after having been the most productive nation
in the world in meat.
T well realize that we now have enacted into law, limitation on meat
imports into the United States. It is this very law with which we are
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now concerned and with which the legislation I have introduced and
support is concerned. The legislation is necessary because of the con-
text of the present legislation, and the high imports it now allows that
threaten our American cattle industry as I have discussed.
By virtue of the exclusion of certain types of meat, certain classifi-
cations, and by the formulas we have devised for setting new and
higher annual import allowances, the current legislation does not in
fact have the concern of the American livestock producer at heart.
WTith this in mind, Mr. Chairman, I would like to present statistics
showing the huge increases of meat imports, particularly beef and
veal, in recent months and years, making comparisons, and reflecting
consumption changes and comparisons.
I have provided tables `here based on information of the Depart-
nient of Agriculture, to provide easy reference to increase and figures
discussed. In examining the vast increases in imports, I will cover
six areas: (1) meat imports presently subject to quota restrictions:
(2) comparisons of 1970 quota meat imports for the first 4 months of
this year; (3) imports of prepared and preserved and other meats not
presently subject to meat quota restrictions; (4) total import figures,
1965 through 1969, including quota, nonquota and Canadian imports;
(5) TJ.S. beef consumption and percentages of foreign imports; and
(6) imports from Canada as they relate to increasing activities by
importing countries to bypass US. quota agreements and restrictions.
Mr. Chairman, it is plain to see from table I how much imports of
meats subject to quota restrictions have increased over the years. But,
what the chart does not show, is that 1969 imnorts of meat subject to
import quota restrictions came close to triggering quotas.
(The table referred to follows:)
TABLE I -TOTAL IMPORTS, QUOTA RESTRICTION MEATS, 1959-63 AVERAGE TO 1969 (INCLUDING ANNUAL
INCREASES, TOTAL INCREASES, AND PERCENTAGE INCREASES)
[In million pounds product weightJ
Increase
over
Percent
1969
increase
over
Percent
Total
Annual
Percent
increase
each
increase
Year imports
increase
increase
average
1969 1,084. 1 83. 1 8. 30 361.9 50. 11
1968 1,001.0 106.1 11.86 278.8 38.60 83.1 8.30
1967 894.9 71. 5 8.68 172. 7 23.91 189.2 21. 14
0966 823. 4 209. 2 34. 06 101. 2 14. 01 260. 7 31. 66
1965 614.2 -125.7 -16.99 -108.0 -14.95 449.9 76.51
1964 739. 9 17. 7 2. 45 17. 7 2. 45 344. 2 46. 52
1959-63 average 722.2 361.9 50.11
Note: Average annual increase since 1959-63 average, 8.06%; Average annual increase since 1965, 15.73%; Average
annual increase since 1966, 9.61%
Mr. MARTIN. The base quota for 1969 was 988 million pounds product
weight, and the 110 percent adjusted base for triggering quotas was
1,086.8 million pounds. The Department of Agriculture, from its first
through its fourth and final quarterly estimate in 1969, had estimated
total imports for the year at 1,035 million pounds. This estimate was
51.8 million pounds below the amount-maximum-that would have
triggered quotas.
However, the total of meats subject to quotas restrictions actually
imported for the year, by year's end had reached 1,084.1 million
pounds-just 2.7 million pounds below the quota trigger maximum
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of 1,086.8 million pounds allowed for the year, and nearly 50 million
pounds more than the USDA estimates for the year.
Mr. Chairman, from table II, which compares quota meat imports
for the first 4 months of 1970 with the first 4 months of 1969, it is
obvious that imports of meats into the United States in 1970 could
reach as much as 20 percent more than in 1969, and than is presently
allowed under import meat quota restrictions. The situation would,
of course, require the imposition of quotas by the Secretary of Agricul-
ture and the Federal Government, on importing nations.
(The table referred to follows:)
TABLE Il-U.S. IMPORTS OF MEAT SUBJECT TO MEAT IMPORT LAW,1 JANUARY-APRIL 1969-70
WITH COMPARISONS
Comntry of origin
April
January-April
Percentchange
from 1969
1969
(1,000
pounds)
1970
(1,000
pounds)
1969
(1,000
pounds)
1970
(1,000
pounds)
April
(percent)
January-
April
(percent)
Australia
New Zealand
Mexico
Canada
Costa Rica
Ireland
Nicaragua
Guatemala
Honduras
Panama
Dominican Republic
Haiti
39, 753
26, 361
4, 957
3, 268
2,564
5, 355
3, 168
1,823
1,223
184
943
73
39, 982
13, 693
8, 816
7, 420
5,009
4, 176
3, 574
2,757
1,467
830
690
193
138, 172
71, 263
25, 325
13, 177
13,049
16, 056
15, 522
9,220
7,768
1,794
4, 734
482
202, 680
65, 038
37, 249
25, 237
19,699
27, 137
17, 377
12,030
11,844
3, 506
2, 712
419
+. 6
-48. 1
+77. 8
+127. 0
+95.4
-22. 0
+12.8
+51.2
+20.0
+351.1
-26.8
+164.4
+46.7
-8.7
+47. 1
+91. 5
+51.0
+69.0
+12. 0
+30.5
+52.5
+95.4
-42.7
-13.1
United Kingdom
332
103
1,864
965
-69.0
-48.2
Total -
90,004
88,710
318,426
425,893
-1.4
+33.7
1 Fresh, frozen and chilled beef, veal, mutton and goat meat. Excludes canned beef and other prepared or preserved
beef products.
Mr. MARTIN. The Agriculture Department has reported quota re-
stricted meat imports of 425.9 million pounds product weight for the
first 4 months of 1970, which includes the two normally low import
months of January and February. The adjusted base quota for the
year-the amount which would trigger quotas-is 1.099 billion pounds,
and the Department of Agriculture estimates for-the year are 1.062 bil-
lion pounds. It is also to be noted that during the first 4 months of 1969,
we were experiencing dock strikes on the Atlantic and gulf coasts,
which no doubt kept imports down at that time. Otherwise, we should
probably have had to trigger quotas by year's end.
Mr. Chairman, what table II shows, is that with 425.9 million
pounds of quota meat imports for the first 4 months-the first one-
third-of 1970, we have already reached 39.3 percent of the total 1969
imports, 38.8 percent of the 1970 adjusted quota that would trigger
restrictions, and 40.1 percent of the Department of Agriculture esti-
mate for the year.
At this rate, if the final two-thirds of the year were to have about
the same amount of imports-assuming no imposition of quotas-
total imports in 1970 would reach 1,277.7 million pounds of import
quotas meats. That would be 193.6 million pounds, or 17.9 percent
above the actual total 1969 imports; 178.7 million pounds, or 16.3 per-
cent above the 1970 adjusted quota; and 215.7 million pounds, or 20,3
percent above the 1970 estimates.
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Turning our attention now to imports of prepared and preserved
meats, and canned and others from Canada, which are outside the
quota restrictions, from table III we can see that these nonquota
imports have risen nearly 60 percent in the last 5 years-from 115.5
million pounds in 1965, to 184.3 million pounds product weight
in 1969. That is an average annual increase of 13.3 percent.
(The table referred to follows:)
TABLE III.-NONQUOTA MEAT IMPORTS (BEEF AND VEAL, CANNED, PREPARED, PRESERVED, AND FROM CANADA)
[In 1,000 pounds product weight]
Year
Annual Percent Increase Percent
Amount increase u change from 1965 change
1965
1966
1967
1968
1969
115,464
128,433 12,969 +11.23 12,969 11.23
137, 266 8, 833 +6. 88 21, 802 18. 88
187,655 50,389 +36.71 72,191 62.52
184,309 -3,346 -1.76 68,845 59.62
1 Average annual increase since 1965 equal
s 13.26 percent.
Mr. MA1rnN. I would just comment here that the slight decrease of
3.3 million pounds in 1969 from 1968, is probably accounted for in most
part by those same dock strikes during the first half of last year.
These imports will, without a doubt, be substantially larger this
year. Already for the first 4 months of this year, they totaled 61,478,000
pounds compared to 49,235,000 for the first 4 months of 1969.
Mr. Chairman, in the table III figures, we are looking at meat
imports that are virtually unrestricted-dependent solely on demand
and consumption, and without any form of restriction for import by
the United States.
Table number IV combines quota restriction meats and nonquota
meats, to give the totals of meat imports into the United States for
the years 1965 through 1969. With regard to quota meats, it is sig-
nificant to note that except for the rather large increase in imports
from 1965 to 1966, mutton and goat meat imports have remained about
the same in recent years, at least without any large increases. How-
ever, with beef and veal, this is not the case, and increases have ranged
from less than 10 percent to more than 30 percent, annually. Compar-
in~ all imports during this period, quota and nonquota-which is
primarily all beef and veal-increases have ranged from less than
10 percent to more than 25 percent. From 1965 to 1969, total beef
and veal imports have increased by 73.6 percent, with an average
annual increase of 15 percent.
(The table referred to follows:)
TABLE IV.-TOTAL MEAT IMPORTS-QUOTA (ALL TYPES), NONQUOTA (INCLUDING FRESH, FROZEN AND CHILLED
FROM CANADA, AND ALL OTHER BEEF AND VEAL, CANNED, PREPARED, PRESERVED), 1965 TO 1969
[In million pounds, product weight]
QUOTA RESTRICTED MEATS
Year
Total
Mutton and
goat
Beef
Veal
Beeffveal
total
Annual
increase
Percent
increase
1969
1968
1967
1, 084. 1
1,001.0
894.9
54.2
62.0
54.3
1, 004.2
920.8
826.3
25.7
18.3
14.2
1, 029. 9
939.0
840.6
90.9
98.4
77.7
9. 7
11.7
10.2
1966
823. 4
60. 5
740. 9
22. 0
762.9
179. 0
30.7
1965
614. 2
30. 3
565. 1
18.9
583. 9
PAGENO="0083"
Total
Year Nonquota beef/veal
Annual
increase
Percent
increase
Increase
fr9m 1965
Percent
increase
1969 184.3 1,214.2 87.5 7.8 514.8 73.6
1968 187.7 1,126,7 148.8 15.2 427.3 61.1
1967 137. 3 977. 9 86. 6 9. 7 278. 5 39. 8
1966 128.4 891.3 191.9 27.4 191.9 27.4
1965 115.5 699.4
Note: Average annual increase of beef and veal imports equals 15 percent.
Mr. MARTIN. Again, we know that these imports, quota, nonquota,
and total, are going to continue to increase under the existing situations.
Mr. Chairman, in all of the: previous discussion and use of table
concerning U.S. meat imports, we have been dealing with the subject
of imports specifically as they are compared from one year to the next,
and in terms of import increases. This has suited our purpose in view-
ing the changes in imports into the United States, without any direct
relation to the total meat situation within the United States.
I believe, however, that comparisons and analysis should not stop
with single import figures. If we are to have a true perspective of the
relation of imports to domestic meat figures, consumption and related
criteria, we need to make still a further comparison. This I have done
in table V.
For this comparison, to get this true perspective of the effect of
meat imports on the entire U.S. meat situation, I have compared
imports with U.S. beef consumption, and shown how much of the
beef consumption in the United States these imports represent.
Again, I have used U.S. Department of Agriculture figures. For
1965 and 1969 comparisons, the Agriculture Department uses popula-
tion figures for the civilian population of the 50 States. And, since
total and average consumption figures are maintained by carcass
weight, the imports for these years are also presented in carcass
weight figures. Furthermore, by using carcass weight figures, the Agri-
culture Department is able to separate total mutton and goal meat
imports from beef and veal, with which we are concerned in terms of
beef consumption in the United States.
(Table V follows:)
TABLE V-U.S. BEEF CONSUMPTION: 1965-69, AND PERCENT OF FOREIGN IMPORTS
IMPORTS: MILLION POUNDS CARCASS WEIGHT
Mutton
Quota Non- and Percent
Year meats quota Total goat increase
Beef
and Percent
veal increase
1965 842.2 159.3 1,001.5 59.9
1969 1, 502. 7 246. 3 1, 749. 0 108. 4 81. 0
941.6
1, 640. 6 74. 1
U.S. BEEF CONSUMPTION
Total, billion pounds
carcass weight
Pounds per person,
carcass weight
Year With veal Without veal
With veal Without veal
1965 20. 054 19. 056
1969 22. 786 22. 107
104, 5 99. 3
114.1 110.7
3683
NONQUOTA MEATS, AND TOTALS
PAGENO="0084"
3684
BEEF IMPORT PERCENTAGE OF U.S. B
EEF CONSUMPTION
Percent increase
of U.S.
Year
With veal
Without veal
consumption
(with veal)
1965
1969
4.7
7.2
4.9
7.4 53.2
Note: Percentages in the without veal" column above include figures with veal imports; where these are not main-
tained or recorded by U.S.D.A. separately from boot in nonquota import figures.
Mutton and goat consumption figures are not included because they are not of primary or direct concern to beef and veal
imports for consumption, and because consumption figures for mutton and goat are not maintained by U.S.D.A.
Mr. MARTIN. You will note in table V, that beef and veal imports
into the United States have increased by 74.2 percent carcass weight,
from 1965 to 1969. And, from the beef import percentage of beef con-
sumption listing, you will note that beef and veal imports into the
United States in 1965 made up 4.7 percent of the consumption of beef
and veal in the United States that year. In 1969, imports made up 7.2
percent of this consumption-and, that is an increase of 53.2 percent
of import meat in total U.S. beef a.lld veal consumption.
From earlier discussion, it becomes quite clear in these figures, that
foreign meat imports may indeed one day take over the bulk of meat
production for the United States. Imports are continuing, their re-
spective percentages of U.S. consumption are jumping by leaps and
bounds, and we have nothing to make us believe that this activity will
be curtailed, by existing laws pertaining to imports.
Mr. Chairman, the final table, No. VI, shows meat import figures
for the United States from Canada., for the years 1965 through 1969,
and for the first 4 months of 1970. I have included this table, with
figures from this one country, because this country is singular among
meat-importing nations. As you know, the United States does not have
voluntary import restriction agreements with Canada. As such, that
country does not have a quota restriction on the amount of meats it can
import into the United States. Now, this discussion is not concerned
with the merits of having or not ha.ving such an agreement with
Canada, except that because of this situation at present., another most
serious problem `has deve'oped concerning meat imports into the
United States.
That, Mr. Chairman, is in the so-called bootlegging of meat imports
into the United States-the third-country shipments, the direct im-
portation of meats into the United States by quota restricted nations
that ship these meats to the United Staets, through Canada, and thereby
bypass their respective quota agreement restrictions. In such cases,
where these meats are not identified by country of origin, they are
statistically recorded for the purpose of total meat imports, as being
shipments technically from Canada. And, they are consequently re-
flected in the nonquota restricted imports, which include imports from
Canada of fresh, chilled, and frozen meats, along with the nonquota
types of canned, prepared, and preserved meats.
PAGENO="0085"
3685
(Table VI follows:)
TABLE VI.-U.S. MEAT IMPORTS FROM CANADA
[In million of pounds, product weight[
Year
lotal
Mutton and goat
Beef and veal
1965
71.705
0.302'
71.403
1966
57.439
.239
57.200
1967
26. 699
.040
26. 659
1968
46. 698
46.698
1969
44.491
.503
43.988
1st 4 months, 1970
25. 598
.068
25. 530
Note: These imports are included in the nonquota imports of beef and veal, prepared, preserved meats in table IV of
this statement, as recorded by USDA.
Mr. MARTIN. You will note in table VI, that imports from Canada
fluctuate greatly from one year to the next. Generally, with this single
importing country with which the United States does not have volun-
tary restriction agreements, imports are considerably down from 19~5,
in the later years of the decade of'the 1960's.
However, the upturn in imports reflected from 1968, with a near
same amount in 1969, included 18, million pounds of meats from other
countries that shipped through Canada thereby bypassing restrictions
in quota agreements with those countries, according to the USDA.
This has far-ranging impact when we view the imports for the first
4 months-one-third-of 1970. USDA reports, as recently as this
month, that these shipments have' been coming into the United States
at a rate of 1 million pounds per week in 1970. This means that 17 to
18 million pounds of such bootleg meats have come into the United
States through Canada during the first 4 months of 1970, and some 22
million pounds by the end of May. In the Canadian import figures, the
17 to 18 million pounds from other countries would indicate that of the
25.6 million pounds listed from Canada, only 7 to 8 million actually
represent imports of Canadian meat.
It is important to note here, that the 25.6 million pounds from Can-
ada already in the first 4 months of this, represents 57.5 percent of the
total imports from that country for the entire year of 1969. At this
rate, if these import shipments continue to come into the United States,
by the end of 1970 they will represent an increase of 172.6 percent over
1969-or 76.8 million pounds.
Mr. Chairman, in summary, the high allowances for quota-restricted
imports, plus the nonquota imports that include these bootleg `ship-
ments, pose a positive threat to the American cattleman. These have
been rapidly increasing and appear~ to be going to continue to increase
at such rates. They directly affect domestic meat prices. The USDA
estimates of last year were nearly 50 million pounds too low for the
actual imports for the year. In the most realistic comparison, im-
ports are representing a vastly increasing percentage of U.S. beef
consumption.
What does all this mean? It means, Mr. `Ohairman, and members of
the committee, that our present import laws are too loose, are weak,
and are inadequate to perform the function for which they were in-
tended. And, the solution lies in strengthening the law, in eliminating
PAGENO="0086"
3686
the alternatives for importation that can and have in fact resulted in
the ineffectiveness of the import restrictive portions of the law. And,
it means that these imports must be combined by classifications as
much as possible for maximum implementation of the law. At the
same time, in view of the Agriculture Department's large margins of
error in estimating imports, and in view of the high import restric-
tion allowances at present, it means that we must eliminate from the
law, the provision for adjustments of the base quota import allowances.
Lastly, the law must be changed to prohibit such open evasion of our
import laws as is occurring in the bootleg shipments of meat imports
into the United States.
Mr. Chairman, it is with these needs in mind that I have sponsored
legislation to amend the law on limitation of meat imports, and that I
urge swift aproval of this by the committee for enactment by the Con-
gressofH.R. 6516.
The legislation would accomplish three things: (1) It provides for
the inclusion of beef and veal, canned, prepared and preserved meats
(except sausages), in the meat import limitations subject to quota re-
strictions. Where this formerly included only cattle and goats and
sheep (except lambs) from importing countries with which the United
States has had voluntary restriction agreements, it would by this legis-
lation include all imports, whether fresh, frozen, chilled, canned, pre-
served2 or otherwise prepared, of beef and veal, mutton and goat. The
result is one category of major meats for consumption, excluding only
lambs and such specialty items as sausage, for import control purposes.
(2) The legislation removes the provision for adjustment by 110
percent of the aggregate quantity (base quota) allowed for the year,
for total allowable imports before triggering the quotas. The amount
of imports allowed within the base quota unadjusted is already very
high, and by eliminating this 10 percent adjustment factor, the law
can be most specifically applied as to amount of imports allowed for
1 year, thereby reducing the amount of difference with which the
USDA has to consider in its estimates.
Mr. Chairman, it is significant here, that if the two previous pro-
visions had been in effect in the law in 1969, foreign meat imports into
the United States would have been reduced by 280.4 million pounds
product weight. The 1969 base quota for imports subject to quota re-
strictions was 988 million pounds, and the adjusted base at 110 percent
was 1.086.8 million pounds. But if the 110 percent adjustment had not
applied, and if nonquota meats had been included in quota restrictions,
there would have been 280.4 million pounds less of meat allowed, almost
entirely beef and veal, before quotas would have been triggered last
year.
As it was, what we had instead, was virtually the reverse. By the
context of our law in this important field at present, we allowed the
importation of 280.4 million pounds of meat above and beyond the
quota limits for which this legislation was intended in the first place.
There can be little doubt that the reduction in imports this year would
be much more, where already we have seen higher quota imports for
the first 4 months, higher nonquota meat imports, and heavy bootleg
shipments.
And, with regard to these bootleg shipments, they would be brought
PAGENO="0087"
3687
under control in my proposed legislation, where nonquota and pre-
pared and preserved meats would be included in quota restrictions.
(3) The final change proposed in this legislation is for repel of the
provisions in the present law that would allow suspension of annual
quantities (fixed quotas). This is an exception provided for within the
present law, although it has never been applied. I view this as a po-
tential danger to the American livestock industry, should it be im-
properly or hastily invoked, and as it serves no direct purpose with
regard to regulation of imports as to a schedule of fixed amounts, it is
further unnecessary to the present law. At such time as any real na-
tional emergency would exist by way of shortages of meat, the Con-
gress can surely be expected to act to bring relief. But, this would be
after appropriate deliberation in direct relation to the seriousness of
the situation and the real danger, as opposed to the blanket authority
now in the law that does not provide for any interpretation of the
seriousness of meat shortages, or indeed, even the proof that there is
real danger.
M~. Chairman and members of the commitee, I have taken a con-
siderable amount of your time on this subject, but it is time that has
been required to deal with such a serious matter. The present law is
haphazard in its administration, it is ineffective in import controls as
witnessed by bootleg shipments into the United States, and it poses
a very real threat to the American cattlemen who represent the last
free segment of American agriculture, from regulation and subsidy.
Unless we want to see the day when American tax dollars are poured
into regulatory agencies and for price support and subsidy of meat pro-
duction in the United States, we will have to take such legal actions
as this proposed legislation and make every effort possible to protect
our Nation's cattle industry.
I ask that the committee give its approval to this legislation, and
urge that Congress enact it as soon as possible.
The CHAIRMAN. Are there any questions of Mr. Martin ~ If not, we
thank you for your appearance tOday.
Our next witness is Mr. McMillan.
Mr. ULLMAN. Mr. Chairman, I would like to welcome before the
committee a very distinguished citizen of my home county in Baker,
Oreg., who, like his dad before him, is not only an outstanding cattle-
man but an outstanding leader in, the community. I certainly want to
welcome him before the committee.
I commend you to all these members of the committee.
Mr. PHILLIPS Thank you, Mr. Uliman.
The CHAIRMAN. Mr. McMillan, you have been before the committee
many times in the past but we would like you to again identify your-
self for the record.
STATEMENT OF C. W. MoMILLAN, EXECUTIVE VICE PRESIDENT,
AMERICAN NATIONAL CATTLEMEN'S ASSOCIATION; ACCOMPA-
NIED BY FRED PHILLIPS, PRESIDENT, OREGON CATTLEMEN'S
ASSOCIATION
Mr. MOMILLAN. Thank you.
I am C. W. McMillan, the executive vice president of the American
National Cattlemen's Association.
PAGENO="0088"
3688
Mr. Ullman has already introduced Mr. Fred Phillips from Oregon
who currently is the president of the Oregon Cattlemen's Association
and who will augment my comments later on.
The American National Cattlemen's Association sincerely appre-
ciates this opportunity to augment testimony presented on June 24,
1968, to the Ways and Means Committee.
The matter of meat imports into the United States continues to be
a problem of deep concern to the domestic beef cattle industry. Al-
though we feel that Public Law 88-482 is serving its purpose now, as
was the case in our testimony in 1968 embracing the amendments then
introduced by Chairman Mills, we still feel the need for strengthening
amendments as those contained in H.R. 17540, introduced by Congress-
man IJilman, and numerous other related bills.
The testimony presented in 1968 still is valid. We stand solidly
behind it, but there have been some new developments since that time
which we wish to present to you now.
Beef imports of the type covered under Public Law 88-482 have
continued to grow. They have increased at an average rate of 9 per-
cent annually since the law was pass~l. Table I outlines the annual
quantities of all beef imports since 1958.
QUARTERLY QUOTAS WOULD HELP STABILITY
In 1068, 1969, and expected for 1970, imports of fresh, chilled, and
frozen beef, veal, mutton, and goat meat under the law have exceeded
the quota. by means of voluntary agreements entered into by the ex-
porting nations. We know that in 1968 and 1969 there was severe hard-
ship placed on cattle producers in the major exporting countries late
in the year because of a cutback in exports imposed by those nations
during the latter months of those years. Adoption of amendments
which would establish quarterly quotas, as we discussed in our 1968
testimony, would alleviate this problem and would be of great stabiliz-
ing influence to the domestic beef cattle industry as well as for our
fellow beef cattle producers in foreign nations.
CANNED, COOKED, AND CURED BEEF
Paralleling the increases in imports of fresh, chilled, and frozen
beef and veal has been a. sha.rp increase in the importation of canned,
cooked, and cured beef. It has inc.reased at an average rate of 15.4
percent annually since 1964. Table I shows this increase. This product
originates principally from South America and must meet stringent
conditions which assure that it contains no live virus of foot-and-
mouth disease. It must be cooked to an internal temperature suffi-
ciently high to kill the foot-and-mouth virus.
New techniques have been developed in canning and cooking, or
cooking and then freezing or canning the product, so that today we
are informed such firms as the Campbell Soup Co. are using nearly all
imported beef in their soups and TV dinners. Although we have con-
tended consistently that the so-called manufacturing-type beef is coin-
petitive with all qualit.ies of our domestically produced beef, this use
of cooked beef in such as T\T dinners make it even mome competitive
with the domestic product, causing loss of demand for the so-called
U.S. produced "table" or "block" beef.
PAGENO="0089"
3689
HIGH PROPORTION OF GUTS
The growth of franchise steak and roast beef houses has been phe-
nomenal in recent years. We are informed that many of these establish-
ments are also using practically all imported beef. Coupled with this
has been the growth in imports of "cuts". We have reason to believe
it has grown to such proportions that they make up at least 40 percent
of all fresh, chilled, and frozen beef imports into the United States.
Until recently, advocates of more beef imports have led us to believe
that all of the beef coming into the United States was of manufactur-
ing quality and found its way only into grinding. Obviously, if 40
percent of fresh, chilled, and frozen imports are "cuts," they do not
find their way into grinding and may have the effect of creating an
artificial "shortage" of grinding meat to go into such products as
hamburgers and frankfurters.
Added to this very large amount of fresh, chilled, and frozen beef
cuts are the improved technologies of importing such cooked and
frozen items as beef rounds from countries such as Argentina. This
principally is used in roast beef sandwiches. This product is competi-
tive with domestically produced beef of all qualities and does not find
its way into the usage of "blending" with trimmings from our fed
beef animals in the United States. The matter compounds itself, not
only creating an artificial "shortage," but causing hamburger prices
to be higher than they might be otherwise.
This becomes quite important to U.S. taxpayers because duties ar~
not collected at the rate which should be assessed to this type of prod-
uct. Most fresh, chilled, and frozen beef carries a 3-cent per pound
duty. In reality, most cuts should carry a 10 percent ad valorem duty.
Importers for their own financial gain prefer the 3-cent rate. They
profit two ways-lower import duty and higher per pound sales-so
the consumer loses twice.
We are delighted that the U.S. Department of Agriculture and the
Tariff Commission are embarking upon a joint study to develop figures
as to the proportion of "cuts" of beef coming into the United States
in fresh, chilled, or frozen form.
We are confident this study also, will show need for changes in the
Meat Import Act of 1964 to close the ever-widening "loopholes" as
those cited above. We feel this could be accomplished easily by the
adoption of the amendments in 1-1.R. 17450 which would add more
TSUS numbers to the law.
COLD STORAGE STOCKS OF FROZEN BEEF
There has been a great deal of discussion recently about a "shortage"
of manufacturing type beef in the United States. This is mentioned in
the preceding paragraphs with respect to the proportion of cuts arriv-
ing in the United States. In 1970, we had an interesting phenomenon
develop. Generally, in the months of January-April, there is a large
drawdown of stocks from cold storage. These stocks of frozen beef are
generally of manufacturing quality. Table II shows the cold storage
stocks as of the end of each month for the years 1968, 1969, and 1970.
Note particularly that as of April 30, 1970, there were nearly 95 million
more pounds of beef in cold storage than April 30, 1969, and it was 121
million pounds more in February 1970 than in February 1969.
We contend there was not that much more domestically produced
46-127 0-70--pt. 13-6
PAGENO="0090"
3690
beef available to build up those stocks but that with the sharp rise of
imports during the same period of time, there was a deliberate effort
on the part of importers to manipulate the manufacturing type beef
market. We also maintain that there is no shortage when you are
building up stocks and particularly show such a substantial increase
quantities in storage between the two years.
ADEQUATE SUPPLIES DOMESTICALLY
In contrast to what many people say, there are ample quantities of
manufacturing or grinding type beef available in the United States.
In recent years, we have increased domestic production of beef con-
stantly. Table III shows the increase in cows, the increase in tonnage
produced, and the increase in per capita consumption of beef. This
growth is nothing short of phenomenal. Every time you increase do-
mestic production it means that there also is more beef available for
manufacturing purposes. It makes no difference whether it is from
fed beef animals or nonfed beef animals.
We often are reminded that dairy cow population is declining in the
United States. This we admit, but the buildup of beef cows has more
than replaced the decline of dairy type cows.
Table IV shows the dramatic shift in cow mix that has taken
place principally since World War II. About two-thirds of all our
cows are beef type-just the opposite of what it was in 1947.
The beef type cows are just as salvagable for manufacturing type
beef as are dairy cows. They are just as lean and provide just as much
product for use in grinding. As a matter of fact, we calculate that
today there is about 8.5 billion pounds of beef available from domestic
sources for manufacturing purposes. This compares to about 7.5 bil-
lion pounds in 1964, and represents approximately a 13.5-percent in-
crease in available manufacturing beef supplies since 1964 from domes-
tic sources alone. This is in addition to the 9 percent average annual
increase of fresh, chilled, and frozen beef imports since 1964.
There is and will continue to be an increase in manufacturing type
beef available from domestic sources which can he augmented by im-
ports in reasonable quantities from foreign nations, so that the con-
suming public will have ample supplies for hamburgers, hot dogs,
et cetera.
The American National Cattlemen's Association advocates a con-
tinuing gradual domestic growth of production of beef. We think
this can be achieved through a delicate balance of supply and de-
mand and through the gradual buildup of beef cow numbers over a
sustained period of time. If anything happens which would adversely
change the beef cattle business economically or psychologically, do-
mestic production will not come at an increased rate for the consumers
to benefit.
U.S. CATTLEMEN DEDICATED TO SUPPLY U.S. CONSUMERS
The domestic beef cattle industry dedicates itself to supply the
U.S. consumers with a continued increase in the supplies of all quali-
ties of beef at reasonable prices. But, they will only do so as long as
the economic incentive is there for them to accomplish this end. If
more imports are permitted entry into the United States than those
covered by Public Law 88-482, much of the incentive will be lost and
PAGENO="0091"
3691
it will be the consumers of the United States who will suffer in the long
run.
EXPORT MARKET FOR BEEF
We direct our closing comments to the development of an export
market for U.S. produced beef. Frankly, this has been fraught with
frus~trations principally because of the protectionist attitude of the
countries that potentially might even be modest importers of our high
quality beef. We are not talking about large quantities. We realize
that the export marketS for our high quality beef is "thin" with the
principal outlets probably only in the better hotels and restaurants.
We do find it quite disturbing that countries such as Japan, wiuch
seems to want to ship unlimited quantities of other commodities and
manufactured goods to the United States, will not permit a greater
quantity of U.S. beef into their nation. If we are to have consistency
in trade, it seems to us there should be some consideration given to
this. This same thing is true with the protectionist policies of the
European Common Market countries.
Even the two largest beef exporting countries to the United States
do not permit U.S. beef into their countries because of the fear of blue
tongue disease. We fully appreciate the fear of the people of New
Zealand and Australia and we do not wish to be the cause of any blue
tongue gaining entry to their nation's sheep herds. However, we feel
the tests and other precautionarymeasures that can be taken to detect
blue tongue virus in animals are adequate to protect this dread sheep
disease from infecting their flocks.
SUMMARY
In summary, if we are going to have trade, it has to be a two-way
street. We are strongly of the opinion that as trade has affected the
U.S. beef cattlemen, it has been a one-way street, except for the ex-
ports of hides, tallow, and variety meats which in dollar volume fall
far below the value of beef imports. We are hopeful that ether nations
of the world will assess this in the proper perspective and rather than
only asking for more and more beef to be shipped to the United States,
they will view the matter on the basis of the opportunity for their
citizens to sink their teeth into some of the high quality, wholesome
beef produced in the United States.
Thank you.
(The tables accompanying the statement follow:)
TABLE i-U.S. IMPORTS OF BEEF
[Product weight-In millions of pounds]
Under
Outside
Year Total quote
quota
195R 619.2 333.0 286.2
1959 722.3 524.5 197.8
1960 512.6 413.8 98.8
1961 689.2 569.0 120.2
1962 970.9 860.0 110.9
1963 1,121.6 985.3 136.3
1964 800.4 705.6 94.8
1965 701.0 583.8 117.2
1966 893.3 762.9 130.4
1967 979.0 840.6 138.4
1968 1,128.0 939.0 189.0
1969 1,216.2 1,029.9 186.3
Source: U.S. Department of Agriculture, Foreign Agricultural Service.
PAGENO="0092"
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PAGENO="0093"
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TABLE V-U.S. COW NUMBERS
un thousandsj
Year
Dairy cows
Beef cows
Year
Dairy cows
Beef cows
1941
1942
1943
1944
1945
1946
1947
1948
1949
1950
1951
1952
1953
1954
1955
25,453
26,313
27,138
27,704
27, 770
26,521
25,842
24,615
23,862
23,853
23,568
23, 060
23,549
23, 896
23,462
11,366
12,578
13,980
15,521
16, 456
16,408
16,488
16,010
15,919
16,743
18,526
20, 863
23,291
25, 050
25,659
1956
1957
1958
1959
1960
1961
1962
1963
1964
1965
1966
1967
1968
1969
22,912
22,325
21,265
20,132
19, 527
19,271
18,963
18,379
17,647
16,981
15,987
15, 198
14,644
13, 875
25,371
24,534
24,165
25,112
26, 344
27,327
28,691
30,589
32,794
34,238
34,433
34, 685
35,405
37, 433
Source: U.S. Department of Argiculture, annual livestock inventory.
Mr. PHILLIPS. This import and export situation, in our opinion, is
a two-way street. We should be able to participate at least to a small
degree, not a large degree, in the export market for beef.
We have been told and it has been demonstrated, I participated in
a trade mission a little over a year ago, and I have heard reports from
food fairs around the world that the American beef is received most
enthusiastically by the people. Therefore, we would like to participate
in a small degree in the exportation of choice and prithe cuts of beef.
The objections that are raised before us-not raised before the beef
importing people-is that, for example, in shipping to Japan there is
a quota. I think the present Japanese quota now is something like
22,000 metric tons.
Another Japanese restriction is that there is a 25 percent ad valorem
duty on meat. The same situation, but not the same figures, exist in the
exportation of our meats to the Common Market countries.
So, I think we should all try to help remove these restrictions in the
exportation of our beef to the foreign countries.
That concludes my statement, Mr. Chairman.
Mr. IJLLMAN. Thank you.
Does that conclude your statement, Mr. McMillan?
Mr. MCMILLAN. Yes, sir.
Mr. ULLMAN. We appreciate very much your statement.
As you well know, this committee was involved in this whole prob-
lem a number of years ago and out of it came the Meat Import Act of
1964. We have been quite interested, in the progress of that act. You
have not dealt in much detail with the Import Act.
Would you say on the whole it has been a stabilizing influence on
the meat industry?
Mr. MOMILLAN. Yes, Mr. Chairman; by all means, it has.
May I say also we did not dwell upon the present law in our state-
ment inasmuch as we thought you were more interested in our `aug-
menting the statement we presented in 1968. We were interested more
in new materials, etc.
The law that you and other members of the committee were very
helpful in enacting in 1964 has been a stabilizing influence. We think,
PAGENO="0094"
3694
however, that loopholes being closed would provide even a more sta-
bilizing influence.
We also feel that the reasonable protection that the law does afford
assists in providing the opportunity for increasing domestic beef sup-
plies which, of course, would be beneficial to the consumer and the
overall economy of the United States.
Mr. ULLMAN. Would you enumerate one, two, three, the recom-
mended changes that are included in the bill that I have introduced?
Mr. MCMILLAN. Yes, sir.
The changes do this: Quarterly quotas which we have discussed in
our statement today would be a part of the law.
Another amendment would be the inclusion of canned, cooked, and
cured which would help close the loopholes that do exist.
A new base period for the stability of quotas would be determined.
Instead of the present 1959 through 1963 levels, the changes would
include the base years of 1958 through 1962.
Another change would be the inclusion of offshore purchases. This
only occurs in those instances where in combat zones there is the oppor-
tunity for the purchase of beef or any other meats by the Defense
Department from foreign countries.
1\Te are only asking that since it is a part of the "Buy American"
Act, purchases would be included in the total of imports into the
United States.
The final amendment would make the trigger point and quota
synonymous.
Mr. ULLMAN. You are in the cattle business, Fred. What is the situ-
ation in the cattle market today on various categories of beef?
Mr. PHILLIPS. The live cattle market is not a rising market. It is
sort of stabilized at the present time. It is what we might class right
now as a rather "soft" market.
Mr. ULLMAN. It is not certainly at the peaks that we have seen it at
times in the past.
Mr. PHILLIPS. That is right. It is not accelerating in price at all like
it did in reference to a year ago.
Mr. ULLMAN. What is the significance, Mr. McMillan, of the in-
creased cold storage supplies of imported foreign chilled and frozen
beef?
Mr. MCMILLAN. Of course, it is difficult to find out just exactly who
does have this product in storage. But the significance we attach to
the increase in frozen beef in storage is the fact that domestic supplies
were not that much greater this year than they were a year ago.
The significance is that there was a sharp increase in imports coin-
cidental with the months where we do have increased cold storage
stocks this year versus a year ago. Therefore, we are of the opinion
that most of the increase-maybe all of the increase-was the imported
product being put into storage to hold off the markct, perhaps to
artificafly raised the market for lean boneless beef, and make it look
as though there was a so-called shortage of the beef in the United
States.
Mr. ULLMAN. Frozen beef does come under the voluntary quota
arrangement of the Meat Import Act?
Mr. MCMILLAN. Yes, sir.
Mr. ULLMAN. Have we come close to triggering quotas under that
program?
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3695
Mr. MCMILLAN. Yes. As a matter of fact, the final figures for 1969
came within about 10 million pounds of triggering the quotas m 1969.
This is in the face of the voluntary agreements that were worked out.
In 1970, the voluntary agreement with the principal exporting
countries is at a point approximately 6 percent above the quota levels,
or, putting it a different way, approximately 4 percent under the
trigger point. This is getting to be a pretty fine line when you are deal-
ing with those small percentages.
Mr. ULLMAN. But it does show that the program does work.
Mr. MCMILLAN. Yes, sir.
Mr. ULLMAN. Because when they approach the triggering device,
then they restrict their exports of beef.
Mr. MCMILLAN. That is true, Mr. Chairman.
Significantly, the law that we do have on the books is providing
the vehicle by which these voluntary agreements could be reached.
It occurred to me the other amendment in your bill is one which
would make the trigger point and the quota synonymous.
Mr. ULLMAN. Thank you.
Mr. Schne~beli.
Mr. SOHNEEBELI. Mr. McMillan, in discussing the growth of imports
of the choice cuts, the better type of beef, you said we have reason to
believe that it has grown to such proportions that they make up 40
percent of all our beef imports in the United States.
Do you have any figures to substantiate the fact that 40 percent of
our imports are in the choice area?
Mr. MCMILLAN. No, Mr. Schneebeli.
First of all, I think it should be made clear that even though this
product might be cuts, it would not be comparable to our choice
quality beef.
Mr. SCHNEEBELI. I think the inference was that the growth of choice
cuts being imported were impinging on our better market.
Mr. MCMILLAN. They are more directly competitive; that is correct.
Mr. SCHNEEBELI. With our better grade of beef; is that what you
mean here?
Mr. MCMILLAN. Yes.
Mr. SCHNEEBELI. Do you have any figures to indicate that 40 percent
of our imports are in the better type of beef?
Mr. MCMILLAN. No; we do not. This is the purpose of the. joint
study by the Agricultural Department and the Tariff Commission, tO
determine what the makeup is Of the imports coming in, what
proportion actually are cuts.
Mr. SCHNEEBELI. I should think they almost could get that from
the price of beef coming in, could they not? This would not seem to be
so difficult to determine.
Mr. MOMILLAN. Apparently it is and they are having a little, more
difficult than they anticipated in determining within a degree of
accuracy.
Mr. SCHNEEBELI. You were talking about changing the base period
from 1959-63 to 1958-62. I presume this would result in a reduction
of your quota.
Mr. MCMTLLAN. Approximately a 10-percent reduction.
Mr. COLLTER. Where does most of this come from? Canada and
South America?
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3696
Mr. M0MILLAN. Of the fresh, chilled and frozen?
Mr. COLLIER. The better grade of cuts.
Mr. MOMILLAN. Perhaps the higher proportion of cuts would origi-
nate from countries such as Canada, Ireland, Central American coun-
tries and New Zealand. Australia would be more dominant in terms
of manufacturing or grinding quality beef.
Australia, however, in this context, accounts for approximately 50
percent of the fresh, chilled and frozen beef imports into the United
States.
Mr. COLLIER. Then it would be that Latin America and Canada
would be the prime exporters?
Mr. MCMILLAN. On a proportionate basis, I would say you are
probably correct.
But we are hopeful that the joint study by the Tariff Commission
and the U.S. Department of Agriculture reveal in more finite terms,
not only the mix but also the origin of it.
Mr. COLLIER. Thank you.
The CHAIi~IAx. Any further questions?
If not, again we thank you, Mr. McMillan, for coming, and also Mr.
Phillips, for accompanying Mr. Mc.Millan.
The Chair desires to break into the schedule of witnesses momen-
tarily and call to the witness table Mr. Nelson Stitt.
We are following this unusual procedure in view of action that
occurred earlier this morning in the committee, in order to give Mr.
Stitt an opportunity to respond to the statements that were made,
and to enlighten us with respect to the situation.
[The proceedings which occurred at this point, relative to the appearance of
Mr. Nelson Stitt and his reappearance, appear in part 4, page 1126 of this
printed hearing, on May 19, following Mr. Stitt's originally scheduled appear-
ance. This testimony was printed at that point in accordance with a unanimous
consent agreement.]
The CHAIRMAN. \Vit.hout objection, tile committee will recess until
2 p.m. this afternoon.
(WThereupon, at 12 :25 p.m. tile committee recessed, to reconvene at
2 p.m. of tile same day.)
AFTERNOON SESSION
Mr. BURLESON (presiding). The committee will come to order.
Tile first. witness this afternoon is Mr. John E. Ward, chairman of
the Meat Importers' Council.
\~Till you come around, please, sir?
STATEMENT OF DONS N. BENT, ATTORNEY ON BEHALF OF JOHN E.
WARD, CHAIRMAN, MEAT IMPORTERS ASSOCIATION
Mr. BENT. Good morning. Mr. Chairman.
I first have to tell you I am not Mr. John Ward. My name is Donn
Bent. I am an attorney with Barnes, Richardson & Colburn, tile
law firm which represents Mr. Ward and the Meat Importers' Council.
I will take only a minute of tile committee's time. My purpose is,
with your permission. to submit Mr. Ward's written statement for
inclusion in tile record in lieu of his personal appearance.
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Mr. BURLESON. Without objection, it is so ordered. Just have a seat,
Mr. Bent.
Mr. BENT. Thank you very much, sir.
(The prepared statement referred to follows:)
PREPARED STATEMENT OF JOHN E. WARD, CHAIRMAN, MEAT IMPORTERS' COUNCIL OF
AMERICA, INC.
INTRODUCTION
The Meat Importers' Council of America, Inc. (MIC) is a nonprofit trade as-
sociation composed of over seventy-five regular and associate members, all of
whom are actively engaged in the importation, sale, handling or use of imported
fresh frozen meat. We urge the Committee to adopt the President's trade pro-
gram as set forth in H.R. 14870 and register vigorous opposition to H.R. 17540
and similar measures designed to further restrict imported meat and meat food
products.
In June, 1968 the MIC testified before this Committee and filed a written brief
setting forth basic facts supporting the need for free trade in meat imports. At
that time we sought to establish that passage of then pending quota proposals
applicable to imported meats would not aid U.S. cattlemen and feeders and would
be to the detriment of American consumers as well as other segments of the
U.S. meat and meat food industries who rely on adequate supplies of imported
lean manufacturing meat. Since 1968~history has verified our position. We now
submit to you again our urgent appeal to avoid any special-interest legislation
such as new quota schemes increasing restrictions for imported meats. Further-
more, it is believed that occurrences since 1968 demonstrate that the present meat
import quota law, Public Law 88-482, has disserved the national interest by
creating artificial U.S. market conditions at a time when available supplies of
lean manufacturing grade meats have been, and will continue to be, inadequate
to meet the needs of our consuming public.
THE NATURE OF IMPORTED BEEF
Notwithstanding requests submitted to Congress by cattlemen and feeders, it
is clear that imported manufacturing beef does not directly compete with high-
quality, grain-fed table beef produced by the domestic beef industry.
The United States Department of Agriculture stated in May, 1969 (Livestoch
and Meat Situation, p. 19)
"Boneless beef imports are similar to and supplement the declining supply of
U.S. produced cow beef. Both are used mainly in hamburger and processed meat
products. Australia and New Zealand are the principal suppliers.
"Imports of carcass beef and bone-in cuts are very small compared with bone-
less beef imports.. . ."
The same publication for May, 1970 states at page 19:
"[Boneless fresh or frozen beef] is similar to domestic cow beef and is used
similarly, mainly in hamburger and processed meat products.. ., [In 19691 bone-
less beef imports amounted to 1,349 million pounds (carcass weight equivalent),
84 percent of beef imports, and more than three-fifths of total red meat im-
ports. Imports of fresh or frozen bone-in beef totaled 19.6 million pounds, only a
little over 1 percent of total beef imports."
Certain domestic protectionist interests contend that table cuts are imported
in significant quantities, estimated by them to be 40% of total imports! This
statistic is `totally without foundation. Spokesmen for such interests have latched
on to this argument in, we believe, an attempt to divert attention from the
fact that manufacturing grade meat is absolutely essential to continued modestly
priced convenience food products such as hamburgers, sausages, etc. At this time
the U.S. Tariff Commission is undertaking an investigation pursuant to Section
332 of the Tariff Act of 1930 to review the meat industry, including, we under-
stand, the extent to which imports enter into manufacturing of meat products in
the U.S.A. The MIC welcomes this investigation because it will further prove
the dangers inherent in continuing restriction of imported meat.
Imported fresh frozen beef is a lean, grass-fed variety distinctly different
from grain-fed beef produced in the Untied States and used for table cuts such
as steaks and roasts.
The bulk of imported fresh frozen beef is used strictly for grinding, i.e.,
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398
combination with other materials to produce hamburger, sausage, etc., and
virtually all imported fresh frozen beef not used in grinding is subjected to some
form of manufacturing or processing operations in the United States.
DECLINING AND UNRELIABLE SUPPLIE5 OF DOMESTIO COW AND BULL MEAT RESULT
IN INSUFFICIE~T SOURCE OF MANUFACTURING BEEF
The growing shortage of lean manufacturing beef available in the USA
is recognized by all objective meat industry analysts. This Committee in par-
ticular has been *beieged by certain cattle interests who refuse to recognize this
fact and who claim that all imported red meat displaces domestic production.
Imported beef displaces domestic production no more than does poultry,
macaroni, fish, or anything else consumers eat when they are not eating
domestic high quality steaks and roasts.
The principal domestic source of manufacturing meat is cows (dairy and
beef) and bulls. These animals are not raised primarily for beef, but for
dairy purposes and the raising of `beef steers and heifers. The cow and bull source
of manufacturing beef is essentially undependable because such meat is a by-
product. The supply rises and falls as a direct result of production practices in
the dairy and table beef industries. It is not controlled by consumer demand
for manufacturing beef. Thus, beef producers tend to hold back slaughter of
beef cows at times when they are expanding herds of `beef steers and heifers
for grain feeding (as they are doing right now). This source of manufacturing
beef has been in general decline for the past 5 years, and except for radical
short-term fluctuations, has not changed materially for 25 years, despite the
fact that our population has increased by well over one third. (See Appendix
Table I, Column I and Table II.)
In 1989, total production from this source equalled 2,668 million pounds (bone-
less basis). It is estimated that this production will show a decline of around
41/2% during 1970. Actual figures are already available for the first quarter of
1970, showing production down 7~% from the comparable period in 1969. The
current general decline may be expected to continue at least through 1972.
MANUFACTURING BEEF SHORTAGES HAVE RESULTED IN INCREASED U.S. WHOLESALE
PRICES
It is axiomatic that short supplies of high demand consumer products result
in chronic shortages accompanied by inflated price levels. Because of the short
supply of manufacturing meat due, in major part, to the unnatural market
conditions resulting from threats of quotas under P.L. 88-482, quotations for cow
meat in the domestic market increased 7~ per pound (about 13%) over a period
of one year, even though imports rose moderately.* Indeed, for the first time in
history, wholesale prices paid for low-grade canner and cutter cow carcasses
have been running higher than prices for good grade steer and heifer carcasses.
Occasionally, these canner and cutter cow prices have actually surpassed prices
for choice steer carcasses.
Viewed in terms of the uses to which they are put, imports are directly
competitive only with cow and bull beef. For all practical purposes, imported
fresh frozen beef and domestic cow and bull beef are `fungible or commercially
interchangeable commodities. Added together, imported frozen manufacturing
beef plus domestic cow and bull constitute the basic U.S. supply of lean process-
ing beef.
MANUFACTURING BEEP FROM STEERS AND HElPERS IS NOT THE SOLUTION
In addition to the lean processing beef derived from domestic cows and bulls
plus imports, there is one other important domestic source of supply of `meat for
manufactured products: fat trimmings, sometimes called "belly cuts," from
high-quality, grain-fed steers and heifers. These are the left-over portions of the
beef carcass after removal of salable retail `beef cuts, and are much too fat to
be used by themselves in making manufactured products. The fat-lean ratio is
just about 50-50 and the lean may not be economically separated from the fat.
tMonthly averages for 90% lean boneless beef (domestic) Chicago carlot basis: March,
1969-$56.13; April, 1069-$57.60; March, 1970-$63.38; April, 1970-$64.50. (As
published by The National Provisioner.)
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In order to be utilized, trimmings must be "leaned up" with low-fat domestic
or imported beef which have a fat content of only ten to fifteen percent. For 100
pounds of belly cuts, it takes about 132 pounds of 85% lean beef to produce
hamburger which does not exceed the legal maximum 30% fat content. To reduce
the fat content to 20%, the legal limit for "ground beef", it takes 610 pounds
of such lean beef.
Because U.S. production of high-quality beef steers and heifers has steadily
increased, these fat trimmings have, of course, increased as well (Column II,
Table I, Appendix). But, as Column III of the Appendix shows, since 1065 this
increase has not even been sufficient to offset declines in domestic cow and
bull beef production.
For years the MIC has maintained that, far from Injuring domestic beef
producers by direct competition, imports actually benefit U.S. producers of table
beef by supplying lean material which is necessary for their fat trimmings or
"belly cuts" to be upgraded into salable products. (This point was made at
pages 23 and 25 of our brief before this Committee of June 24, 196&)
The U.S. beef Industry has committed itself to continuing specialization by
raising high-quality, grain4ed animals. In this area, it has enjoyed tremendous
success virtually doubling production in fifteen years. But there is no quantity
of fatty by-products, no matter how large, that can ever satisfy America's needs
for manufacturing beef. As the cattlemen continue specializing, the gap between
lean beef supply (domestic cow and bull plus imports) and fed beef becomes
greater and greater. Without sufficient lean beef for combination, unusable ex-
cesses of fat trimmings will necessarily cause prices received by cattlerhen to
decline or, at least, fall short of potential return.
This Is occurring at the present time, and a significant "cheapening" of fat~
belly cuts and trimmings may be currently observed. To demonstrate this, we set
out below prices taken from The National Provisioner Daily Market Service for
March 16 and June 5, 1070 for fat mateHals (full plates, navels, briskets, rough
flanks and 50% lean trimmings) and 00% lean boneless beef:
Prices in àents per poundj
Mar. 16
, 1970
Juno 5,1970
Fatbolly cuts and trimmings:
Full plates
Navels
Briskets
Rough flanks
50 percent lean trimmings
Boneless beef, 90 percent lean
*
29
25
338%
24
31~%
63~
223~
20~
268%
208%
25
63
During April, 1970, 50% lean trimmings from choice navels rose to around
35%~ per pound, up to only i1,~ from a year earlier, while 90% boneless ,beef
averaged $64.50 per hundreweight-up nearly $7.00 from the April 1969 average
of $57.60.
The shortage of lean beef with which to mix the fatter materials was clearly
a major factor in the relative weakness of prices for fat belly cuts and trimmings.
It is believed in the industry, and is logical to assume (though no actual statatics
are available) that excessive quantities of domestic fat `belly cuts and trimmings
are largely responsible for very high cold storage warehouse stocks in recent
months.
Disproportionate supplies of fatty trimmings may help the consumer by reduc-
ing the prices for soap and candles. But they won't help `by reducing overall cost
of materials for the meat processor.
Divergent opinons have been expressed as to the appropriate percentage of
beef steer and heifer carcasses which constitute usable fat trimmings. U.S. pro-
ducers and feeders have gone on record that as much as 26% of the average
carcass is used in processing and manufacturing. This figure tends to distort
actual percentages of fat trimmings available for meat production by the inclu-
sion of bones, unusable kidney fat and waste. Any price and supply statistics for
manufacturing meats based on such a fallacy are in error.
A more accurate figure for usable fat trimmings is 12-14% of carcass weight,
or about 9% of live weight.
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THE U.S. MARKET FOR LEAN MANUFACTURING BEEF SHOULD BE RETURNED TO A
NORMAL STATE BY REPEAL OF PUBLIC LAW 8 8_4 82
Sinëe 1964, Public Law 88-482 has menaced U.S. manufacturers of meat food
products, food market chains, importers and brokers with the constant threat
that increasing imports of sorely needed products to meet demand would trigger
a quota which in turn would result in a substantial cutback in available supplies.
During this same period of time the domestic cattle cycle has, as it has for
generations, continued to reach peaks and valleys of production and profitability,
without regard to meat imports.
Concurrently, domestic and import prices paid for manufacturing beef have
risen sharply. Importers and users of lean manufatcuring beef continue to com-
pete hotly for limited available supplies of raw materials while Mrs. Housewife-
the American consumer-finds herself paying skyrocketing prices in support of
an artificial market condition created by an Act of Congress which has benefited
no one.
CONCLUSION
During the course of these bearings by the Committee on Ways and Means
many proponents of restrictive legislation have based their arguments on so-
called "unfair" competition from low-wage countries. Repeatedly, these witnesses
have suggested that quotas or orderly marketing arrangements for certain im-
ported products would allow the United States industries competing therewith
to recover and compete on a normal basis. In the case of manufacturing grade
meat, normality is currently a dead letter because of the adoption of just such
a misguided panacea.
We. believe that the President's Trade Bill provides ample protection for U.S.
industries while at the same time furthers the best interests of the United States
continuing historic trade policy. Accordingly, we support HR. 14870.
The Meat Importers' Council of America, Inc. respectfully submits that all
proposals designed further to restrict imported meat are now obsolete due to the
consumers' unsatisfied needs for modestly priced and freely available meat food
products manufactured from domestic and imported lean meats. It is estimated
than even if current quota controls were removed completely for the year 1970
only about 200 million pounds additional manufacturing meat could be found in
the world market~1ace. If it were possible to obtain these supplies, which are
badly needed, we predict that there would be an immediate and direct impact on
wholesale .pr.ices for imported meat and a similar effect on `the retail prices paid
by consumers for manufactured products such as hamburgers and sausages. We
predict further that the decrease in wholesale prices for imported meat, should
the voluntary scheme and quota system set forth under Public Law 88-482 be
suspended, would be around 50 per pound and that the decrease in comparable
U.S. canner and cutter grades would be somewhat less, possibly 1-20 per pound.
There would be virtually no price depressing effect on wholesale prices paid for
U.S. good, choice and `better carcasses.
For the foregoing reasons we urge that supplies be allowed `to equal demand
and that members of this Committee undertake to modify or repeal existing law
and oppose any further quota measures for meat and meat products.
In 1964, the `year Public Law 88-482 was enacted, average retail prices for
ground beef and frankfurters (as reported by 40 regional and national chain
stores) were 740 and 62.40 per pound respectively. In the third quarter of 1969
the price for ground beef was steady at a high of 660 per pound, a 40 percent
increase, while the average September price for frankfurters rose 31 percent to
82.10 per pound. Earlier this year, (not `the period of peak deman'd) prices were
maintained at less than le per pound below the records cited `above and are virtu-
ally certain to set new record highs before this summer is over. A major cause
of this price `trend is the shortage of lean beef from which hamburgers, frank-
furters and similar food products are manufactured.
It is, of course, a fact th'a't the strict quota set forth in Public Law 88-482
has never technically `been "triggered." At first this was because allowable jut-
ports were well below the trigger point. Since 1968, however, technical triggering
of `the quota has `been avoided only by voluntary self-imposed limitations of `ex-
ports by principal supplying coun'tries. The law has operated to keep out badly
needed meat since 1968 and has brought about shortages which in turn have
driven up wholesale prices. The "surcharges" brought `about by special interest
PAGENO="0101"
3701
quota legislation and laws such as Public Law 88-842 are borne by those who
can least afford to pay-the low and middle income consumers.
Imports of lean `fresh, frozen beef first became substantial during the period
1957-59 when domestic production declined sharply (see Appendix Table I). Until
1968, imports freely rose and fell in inverse proportion to domestic production,
permitting a generally orderly and steadily increase in total supply. Since 1968,
however, demand has exceeded maximum permissible imports under the quota
law. Thus, under the present law and current insufficient U.S. supplies, imports
may no longer act as the necessary supplement to U.S. production. Short sup-
plies and sharply increased prices are the result.
U.S. production of lean manufacturing beef will decline significantly during
the next `few years. American usage of such meat (whether domestic or imported)
has increased, in absolute `terms, an "average of `about 21/2 percent per year for
several decades. In order to `satisfy a constant increase of 21/2 percent per year
in supplies, increased imports of `between 200 to 300 million pounds per year will
be required. Yet, under `the present quota law, `annual increases in allowable
imports have not, and will not, average as much as 30 million pounds per year.
If the threa't of a strict qu'ota under current statutory provision's has created
an unnatural `and inflated market for manufacturing meat in `the U.S.A., Con-
gress must, we submit, recognize the lesson of history and reject `any attempts
to limit further available supplies `by means of so-called "orderly marketing" or
quota schemes for imported meat andmeat food `products. Vigorous lobbying by
the cattlemen `and other vested interests seek to mask the `sleeping rebellion if
the consuming public.
APPENDIX TABLE I-BASIC U.S. SUPPLY OF MANUFACTURING BEEF'
Year
Cow & bull
beef 2 ~,
(1)
Belly cuts 3
(2)
Domestic Domestic
production Imports supply
(3) (4) (5)
1946
1947
1948
1949
1950
1951
1952
1953
1954
1955
1956
1957
1958
1959
1960
1961
1962
1963
1964
1965
1966
1967
1968
1969
1970
1971
2,500 `
2,884
2,573
2,101
2,236
2,122
2,101
2,745
2,976
3,144
3,118
3,072
2,314
1,959
2,217
1,981
2, 066
1,966
2,400
2,984
2,840
2,614
2,575
2,668
E2,550
E2,420
485
` 521
, 451
, 545
` 536
444
545
712
` 731
754
847
` 850
852
917
1,002
1, 065
`, 1, 056
`, 1,157
1,261
1,225
`, 1,347
1,411
` 1,480
1,502
E1,550
E1,590
2,985
3,405
3,024 70 3,094
2,646 77 2,723
2,772 62 2,834
2,566 87 2,653
2,646 72 2,718
3,457 27 3 484
3,707 16 3,723
3,898 26 3,924
3,965 31 3,996
3,922 121 4,043
3,166 345 3,511
2,876 508 3,384
3,219 399 3,618
3, 046 553 3, 599
3, 122 838 3,960
3,123 960 4,083
3,661 679 4,340
4,209 584 4,793
4,187 762 4,949
4,025 811 4,836
4,055 939 4,994
4,170 1,004 5,174
E4,100 71,040 5,140
E4,010 71,055 5,065
1 All figures in millions of pounds, boneless basis.
2 Total commercial production from USDA figures.
3 Calculated from USDA figures for steer and heifer carcass Weight.
Col. 1 plus col. 2.
o Fresh, chilled and frozen beef from Department of Commerce figures.
o Col. 3 plus col. 4.
7 Estimated, on assumption that Public Law 88-482 remains in effect.
PAGENO="0102"
3702
APPENDIX
TABLE II
COW SLAUGHTER DOWN, PRICES HIGHER
In the face of a ten percent decrease in cow slaughter during Tanuary-March
1970, as compared to the same period a year ago, prices on utility cows advanced
sharply to $23.75, about $2.60 above a year earlier. This likely reflects the sig-
nificant drop in the slaughter of dairy cows, which make up the bulk of cow
slaughter in the winter and spring. The USDA predicts that the slaughter of
dairy cows will continue downward in 1970, with slaughter of beef cows expected
to be near 1969 levels. This reduced supply of cows for slaughter should result
in prices well above a year earlier for the balance of 1970. As cow slaughter is a
primary source of manufacturing meat, a reduction in its level will result in
further shortages, as other sources cannot compensate for the reduction.
THO'
C~W A~JG~II~
700
600
500
400
JAN.
APR.
CESTIMATED COMMERCIAL.
U.S. DEPARTMENT OF AGRICULTURE
JULY
OCT.
NEC. ERS 3642- 70(3) ECONOMIC RESEARCH SERVICE
Source: U.S. Department of Agriculture Live8tock and Meat Situation, March and
May, 1970. April 1970 slaughter estimated from USDA figures.
PAGENO="0103"
3703
APPENDIX
TABLE III
COW INVENTORY STEADY
The total inventory of cattle and calves on farms was at an alitime high of
112 million head at the beginning of this year, with a `beef herd of 91 million
head and a dairy herd of 21 million head. The beef herd has been expanding
every year since 1958, and last year increased by nearly 3 million head. The dairy
herd, following a pattern of steady decline in numbers since 1945, decreased
421,000 head in the past year.
The increase in beef COWS since 1955 has been offset by ~the decrease in milk
cows and other milk stock, so that this' major domestic source of manufacturing
meat has remained relatively constant since 1955.
Source: U.S. Department of Agriculture Livestock and Meat Situation, March, 1970,
p.5.
Mu.
C~TTL~ O~ FARMS, JANUARY ~
100
80
60
40
20
0
U.S. DEPARTMENT OF AGRICULTURE
1925 1935 1945 1955 1965 1975
OCOWS AND HElPERS? YES. AND OLDER FOR MILK. tS YRS. AND OLDER NOT ~DP NILE
CHEIFERS AND CALVES NOT FOR NILE AND ALL STEERS AND BULLS. £PREL~NINARl.
NED. ERIUIR- `~ EONOMVT PYSFARCI.I S~PV
PAGENO="0104"
3704
Mr. BIJRLESON. The next witness is Mr. G. L. Hadley, representing
the National Livestock Feeders Association. Is Mr. Hadley present?
STATEMENT OF DON F. MAGDANZ, EXECUTIVE SECRETARY-
TREASURER, NATIONAL LIVESTOCK FEEDERS ASSOCIATION
Mr. MAGDANZ. Mr. Chairman, Mr. Hadley was to appear with me.
I am Don Magdanz of the National Livestock Feeders Association.
I am here, but Mr. Hadley is detained.
I am prepared to testify alone instead of in company with Mr.
Hadley.
Mr. BTJRLESON. If you will come around, sir. Do you have a written
statement?
Mr. MAGDANZ. I do, sir.
Mr. BuimEsoN. Would you like to put it in the record and summarize?
Mr. MAGDANZ. I would like to do this, Mr. Chairman, with your
permission. I did prepare a summary of the. statement. However, I
will even forgo going through this summary, which is rather short,
and in deference to the committee's time and the other witnesses, since
you are running a. little bit behind schedule I will be glad to merely
ask that the complete text of our statement be included in the record.
Mr. BURLESON. Without objection, it will be done.
Mr. MAGDANZ. I would also like to offer this possibility and you make
the decision as to what the committee would like to do.
In the current statement that we have prepared which deals with
both general trade policies, but more particularly with the problems
created by meat and meat imports, we have referred to two previous
statements. Since., I believe April 8, we sent these two previous state-
ments to all members of the Committee on Ways and Means. One of
them has to do with general beef supplies a.nd prices; the other one
deals with processed beef supplies and prices.
It would please us if the committee would be willing to include these
two previous statements in the record along with the regular state-
ment that we have prepared for this hearing.
Mr. BURLE5ON. Wnithout objection, that will be. done. I think it is
wise from your standpoint that we do that, because we have a way of
getting these statements shuffled around and losing them. Without
objection, that will be done.
(The statements referred to follow:)
STATEMENT OF G. L. HADLEY, PRESIDENT, AND Pox F. MAGDANZ, EXECUTIVE
SECRETARY-TREASURER, NATIONAL LIVESTOCK FEEDERS ASSOCIATION
SUMMARY
No nation can long exist favorably in this world without engaging in foreign
trade and we make it very plain that the National Livestock Feeders Association
subscribes to this policy. On the other hand, we profoundly maintain that the
United States cannot continue to import various competitive commodities with-
out employing some reasonable restraints that will protect American industry
and labor. This is particularly true as most other nations regulate their imports
using a variety of standards and methods.
Within the framework of this philosophy, the NFLA has long advocated the
dire need to change the course of United States' trade policies. We have sup-
ported these contentions in detail on numerous occasions including a documented
statement to the Trade Information Committee on March 25, 1968, and in testi-
mony before this Committee on June 4 of the same year.
PAGENO="0105"
3705
In addition to our contention for adjustment in trade policy, we have rec-
ognized the absolute necessity of import ceilings on many commodities in order
to preserve a just a share of our domestic `market for United States industries.
Whether it is meat, steel, glass, or some other manufactured products, the very
simple truth of the matter is that our industry, operating in our cost atmos-
phere, cannot compete with foreign production which has decidedly lower co'st~.
We underscore the fact that we are `advocating ceilings on imports . . . not
closed doors. For years, the United States has embraced a free trade policy while
other nations have continued to exercise a variety of trade barriers to control
their imports. We feel the time has arrived when the United States must solve
the situation realistically by `saying to our `foreign competitors:
1. We will continue to offer you a share of the United State's' market. We are
not interested in cutting you back to zero or gradually reducing to nothing your
shipments to the United States; but,
2. We are no longer going to permit you to carve up our domes'tic industries
by flooding the United States' market with any volume of goods you choose and
whenever you choose to ship them.
~Foreign nations cannot fail to recognize the reasonableness of this position if
they will re-examine their own actions over the many years, since they have long
realized the effect of unrestrained Imports on their own industries.
Ceilings on imports would n'ot deny `~foreign nations the opportunity to earn
dollars in order to buy American commodities, either Agricultural or industrial.
Agricultural exports from this country `have declined since `1966 by about $1
billion dollars because of expanded World Agricultural production and the im-
plementation of restraints by foreign nations, and not because of U.S. trade
policies. They will continue to buy Agricultural commodities if they need them,
or want them, and if our prices are acceptable.
To avoid injury to the domestic cattle business, the Congress passed the Meat
Import Quota Law in 1964. The importance of restraining imports of beef, veal
and mutton was clearly evident when cattle prices were seriously depressed in
1963 and beef imports reached the unprecedented `level of 10 percent of domestIc
production.
Unti'l 1969 the effectiveness of P.L. 88-482 was not tested, but it is being
tested no'w, and its deficiencies as well as loopholes are plainly evident. Late
in 1968, in order to supplement the provisions of the law, our Government
implemented Section 204 of the Agricultural Adjustment Act of 1956 and sought
agreements from the supplying nations w hich would limit their exports to a
restrictive annual amount.
Despite the agreements, nearly all nations `over-shipped the restricted level in
1969. Thus far in 1970, shipments from most of the 13 nations involved are run-
ning-considerably ahead of the restricted level. Imports have been coming in at a
projected annual rate of 1,277.1 million pounds, or more than 200 million pounds
a'bove the agreed amount.
It would appear, at least, that a number of the countries are ignoring the
generous allotments that have been awarded under the agreements. It is also
apparent from the record of shipments so far that some countries either do
not intend `to abide by their agreements, or hope to pressure the United States
into further relaxation of agreed levels.
In addition to heavier shipments in early 1970, suppliers have made a change
in the complexion of exported beef. At least 25 percent is now coming into the
U.S. in primal cut form instead of strictly boneless beef for processing purposes.
Another device being employed `by some co,untries in an attempt to circumvent
our law is the practice of trans-shipments through a third country.
These and other transparent `maneuvers `underscore the necessity tightening
up the provisions of P.L. 88-482. The replacement of standby quotas with absolute
ceilings on imports, and the establishment of these ceilings on a quarterly basis
would accomplish much of that which is necessary. Thus, we strongly recom-
mend favorable consideration of HR. 17540 by Mr. U'llman of this Committee,
as well as numerous other like measures which `has been introduced in the
H'ou'se of `Representatives and Senate.
The financial returns to the domestic cattle industry are extremely sensitive
to the `supply available and the `demand therefore. For some time, the National
Livestock Feeders Association has been intense in its effort to counteract a
deliberate program designed to influence consumers and officials, and encourage
them to bring pressure for the relaxation or even elimination of the present
restrictions on beef imports.
46-127 0-70---pt. 18-7
PAGENO="0106"
3706
During the past several months, members of this Committee have received
two documented statements from this Association, one entitled "The Truth
About Beef Supplies and Prices", and the other explaining "The Truth About
Processed Beef-~Supplies and Prices". These statements have substantiated
the fact that beef is a bargain as compared to other foods, other costs, con-
sumer goods and services, hourly wages rates, and per capita disposable income.
They emphasized that consumers continue to buy more beef for less and ex-
plained why we cannot afford and do not need more imported beef.
They went on to demonstrate that the domestic industry can supply necessary
increases in production for both population expansion and projected per capita
consumption provided competitive foreign beef is not allowed to flood our
market and depress prices to the point where incentives for increased production
are reduced or eliminated.
We again emphasize the need for adjustments in the foreign trade policies
of the United States, not to the extent of major reductions in foreign trade,
but to the degree of recognizing the importance of a healthy domestic industry
in this Nation's economy, and of preserving for American industry the just
portion of our own market to which we are entitled.
INTRODUCTION
For the National Livestock Feeders Association, we compliment the Chairman
and the House Committee on Ways and Means for conducting the present series
of hearings on Foreign Trade Matters. Also we wish to express our gratitude
for the opportunity to appear and present the views and comments of our mem-
bership on these. important subjects.
Though the Committee is well acquainted with the National Livestock Feeders
Association, we would like to describe it briefly for the Record. It is a voluntary
non-profit and non-political trade organization, sustained entirely by the mem-
bership dues. Those who belong to the organization are engaged in the business of
feeding and finishing livestock (cattle, hogs and lambs) for the slaughter market,
and they have associated themselves to determine policy, to speak for the feeding
industry, and to render such services to the membership that may be necessary
and appropriate. Though membership does exist in some twenty states, it is
most prominent in the vast midwestern area of the country, a region which still
feeds 65 percent of the cattle finished for market in the United States and pro-
duces about 75 percent of the hogs.
While addressing remarks in more detail to the problem created by imported
meat and meat products, we also want to make some overall observation with
respect to the United States foreign trade in general. We do believe that the
United States is at a turning point in the history of world trade, and it is neces-
sary for the people and the Congress to appraise the situation very carefully
based on past experience as well as anticipated future developments.
No nation can long exist favorably in this world without engaging in foreign
trade and we would like to make it very plain that this Association subscribes to
such a policy. At no time, have we come forward and promoted the idea of clos-
ing the door completely on the importation of any products except when the en-
tire country might be endangered by disease infestations.
On the other hand, it is our our profound belief that the United States cannot
continue to import various competitive items and products without employing
some reasonable restraints that will protect American industry and labor. These
positions will be supported and elaborated upon as we proceed through the vari-
ous sections of the statement that follows.
PURPOSE OF APPEARANCE AND ARGUMENTS
The livestock business is the major segment of agriculture. Its annual sales
grossly exceed those of any other individual farm commodity in agriculture. In
1969 cash receipts of farmers for meat animals came to $17,584 million, 37 percent
of total farm marketings which amounted to $47,434 million, not including gov-
ernment payments. In fact, cash receipts from meat animals were almost as much
as sales of all crops combined.1 Furthermore, the good economic health of the
livestock business is essential to the entire nation.
1Farnv Thcome Rituation, Economic Research Service, U.S. Department of Agriculture,
February 1970, p. 9.
PAGENO="0107"
3707
Though the number of people actually engaged in the livestock business is
small, as is the case with most other industries outside of agriculture, its contri-
butions to the overall economy are far reaching. There are millions of people
employed in the, processing, fabricating, transporting, distributing and retailing
of the food from livestock producers and feeders. Furthermore, millions are em-
ployed in providing the materials, equipment, and supplies utilized by this seg-
ment of agriculture.
Beyond this, livestock puts a value to the vast acres of grassland as well as
the production of feed grains and roughages, thus stimulating the business and
welfare of people. in rural areas, small cities and villages. The economic impact
of the industry extends itself into large manufacturing centers, many larger
cities and the country as a whole. Approximately 80% of the feed grain used
domestically is for the purposes of providing the Nation with meat and meat
products in a variety of kinds and quality unknown in the rest of the world.
The perpetuation, growth and development of the livestock business, though, is
heavily influenced by United States' foreign trade policies, particularly those
pertaining to acceptance of exported meats from foreign nations. We appear to-
day for the purpose of discussing these policies as well as certain general trade
matters.
THE NEED TO ADJUST UNITED STATES FOREIGN TRADE POLICIES
The National Livestock Feeders Association has long advocated the dire need
to change the course of United States' trade, policies. In our arguments before
this committee on June 4, 1908, we pointed out the merits of reasonable protection
for domestic industry, the failures for agriculture in the Kennedy round of ne-
gotiations, and the import protection and import restrictions employed by foreign
nations, all in defense of reasonable import control of meat and meat products.
Earlier in 1908-on March 25-we submitted a comprehensive and documented
statement to the TRADE INFORMATION COMMITTEE covering the arguments
just enumerated, but also relating to overhauling our negotiating process and
pointing out the shortcomings of several applicable statutes. Similar, though
more confined arguments, were presented to the Senate Committee on Finance
on October 18, 1967, at hearings on a bill to revise the quota system on importa-
tion of certain meat and meat products.
We see no need to repeat ourselves at this time, but do remind the committee
that these documented presentations have been made. Most of the arguments and
information, other than recent production and import figures, have not changed.
We make no request for including any of these statements. in the present record,
but do offer to make copies available to any who might like to have them.
ESTABLIShMENT AND MAINTENANCE OF CEILINGS ON IMPORTS
In addition to our contention for adjustment in United Sta!tes trade policies,
the National Livestock Feeders Association has recognized the absolute neces-
`sity `of ceilings on many items and `products in order to preserve U.S. industries
as well as levels of employment. Obviously these views are `shared `by a great
many. It is significant that `a large number of bills have been introduced in this
Congress which would provide for ceilings eu imports of various commodities, if
`and when the import level exceeded a certain hiStorical volume.
It is further significant that the general approach through these bills is similar
`to that embodied in `Public Law 88-482, commonly referred `to as the Meat Import
Quota Act of 1964. The National Livestock Feeders Association subscribes `to and
- supports `the `principles contained in the Fair International Trade Act of 1969
represented by some 65 to 70 bills now pendi'ng before this Committee. Desirable
as this approach may be, `though, we submit it has certai'n deficiencies which will
be explained by pointing out `deficiencies in the existing Meat Import Quota Act.
Whether it is meat, steel, glass or most any other manufactured product, the
very simple `truth `of the matter is that U.S. in'dustry cannot compete with for-
eign `production which operates a't decidedly lower cos'ts. This is particularly true
as more and more import's are in the form `of manufactured or finished goods
instead of raw material's.
The level of the United States' economy, including !the tax structure, labor
coSts and nearly all costs that might be named, is such as to give foreign nations
a greater competitive advantage over the United States induStry. Even our higher
productivity per man h'our `tends to disappear as productivity improves in foreign
nations resulting from technological `advancement and mass production methods.
Many commodities coming into the United States as competitive items are
PAGENO="0108"
.3708
produced with wages that would be clearly illegal in the United States as well
as being substantially below prevailing levels that have been negotiated.
While consumers may seemingly enjoy the lower prices of imported manufac-
tured goods, and would thus be prone to support present liberal U.S. trade pol-
icies, they ignore the hard cold facts that jobs are simply being transferred from
the United States' market to foreign nations with generally lower wage rates.
This can be tolerated up to a point, bu:t when carried too far-~and we submit
that we have gone too far already-our domestic economy is crippled and injured.
CEILINGS ON IMPORTS-NOT CLOSED noons
The Committee is fully aware of the historical record of tariffs and import
restrictions. The Smoot-Hawley Tariff Act which was passed in 1930 has been
blamed for many things including the depression of 1929, even though world
economic conditions were building up long before. In 1934 the Law was changed
and in the following thirty-six years we have proceeded on a course directed
toward lower tariffs and fewer restrictions on the premise that free trade among
nations would cure many difficulties in the world.
Unfortunately, the free trade policy has been a rather one-sided affair. While
we reduced tariffs, other countries granted only those concessions they could
easily give up without injuring their own industries and people.
We do have a few import quotas as well as a stand-by quota program for fresh,
chilled and frozen beef, veal and mutton. On the other hand, most foreign na-
tions still have and maintain a multitude of nontariff trade barriers which they
implement at will.
With respect to meat products and meat animals, these foreign barriers in-
clude quotas, import licenses, import certificates, gate price systems, variable
health restrictions, outright prohibitions, minimum price controls and others.
Thus the United States is not only at a competitive disadvantage resulting from
higher cost of production and higher wage rates, but also because the rules of
the game are not alw-ays the same on both sides.
We submit the necessity of evening the score and from now on insisting on
the same rules for both sides in the game of international trade. We further
suggest that higher tariffs, adjustment assistance to either industry or labor. and
subsidies, are not the answer.
Instead. we submit the solution to the problem realistically lies in the es-
tablishment of reasonable ceilings on imported commodities which compete with
domestic products according to a historical relationship of imports to domestic
production. This is essentially what the Fair International Trade Act would
do.
It amounts to saying to our foreign competitors:
1. We will continue to offer you a share of the United States' market. We
tire not interested in cutting you back to zero or in gradually reducing to nothing
your shipments to the United States; but
2. We are no longer going to permit you to carve up our domestic industries
by flooding the United States' market with any volume of goods you choose
and whenever you choose to ship them.
The fairness and reasonableness of such a position and warning is entirely
justified. It encourages foreign trade in a truer sense of the word while still
providing access of foreign goods to our U.S. market. To do otherwise amounts
to denying domestic industries their rightful share of our own market expansion,
and could even cause them to accept a declining proportion of their existing
share.
Such action would amount to nothing more tl1an w-hat foreign nations have
been doing for years. In fact, it w-ould not be as much. Appreciation and under-
standing of the necessity of ceilings can be impressed upon them by the sug-
gestion they re-examine their own actions over a long period of years. They
have set the examples and should realize fully the undesirable impact of unre-
strained imports.
UNITED STATES AGRICULTURE AND WORLD TRADE
It has been argued that for many years the United States has enjoyed a favor-
able balance of Agricultural trade. and that Agriculture, business and labor
alike do benefit from liberalized Agricultural trade. It has been further con-
tended that ceilings on imports of individual products-Agricultural as w-ell as
industrial-would seriously injure American Agriculture. There is the additional
PAGENO="0109"
~37o9
argument that foreign nations must not be denied the opportunity to earn dol-
lars in order to pay for our Agricultural products, nor should they be provoked
into imposing retaliatory restrictions.
We have pointed out previously that many nations have already imposed re-
strictions in various ways on many U.S. products and still maintain them. By
admission of our own Government, the Kennedy Round of Negotiations made
little, if any, progress toward eliminating non-tariff barriers imposed by other
nations. For them to justify additional barriers to U.S. products as a result of
ceilings on U.S. imports is certainly unwarranted if not unthinkable.
Ceilings on U.S. imports would in no way deny foreign nations the opportunity
to earn dollars to buy American products. Ceilings do not mean absolute restric-
tions nor even roll backs, depending on circumstances. Unfortunately, there is
a strong tendency on the part of many who advocate free and unlimited access
of all foreign products to the U.S. market to confuse ceilings or restraints with
absolute prohibition. Nothing could be farther from the truth.
There is no validity to the argument that ceilings on imports would seriously
injure the export opportunity for American Agriculture. As a matter of fact,
even though the new U.S. ceilings of which we speak have not been in existence,
Agricultural exports have declined at least $1 billion since 1966. In 1986 Agri-
cultural exports amounted to $6.9 billion according to the reporting procedure
used by our Government. Exports in 1967 declined to $6.4 billion, and registered
a further decline in 1968 to $6.2 billion. In calendar year 1969, exports went
down to $5.9 billion.~
These declines took place, not as a result of import ceilings by the 13.5., but
because of expanded Agricultural production in other countries of the world,
and because other countries have established and maintained trade barriers
designed to protect their own production at high prices.
The United States will not improve the situation by maintaining a free and
open market as long as other countries hold up their trade barriers and take
from us only the quantity of U.S. products they want or need. The real problem
is to break down these foreign barriers, but experience demonstrates rather con-
clusively we can accomplish little by negotia;tion. The only answer is to adopt
some of the same policies.
Foreign nations will continue to buy U.S. Agricultural products if they need
them, or want them, and if our prices are acceptable. The latter requires farm
programs that will not boost the prices of exportable commodities beyond a cer-
tain level. Our current farm programs rely heavily on an export market which
means price supports that are not so high that we will price ourselves out of the
world market. In the meantime, foreign nations con;tinue to protect high guar-
anteed prices for their producers.
At this time it would seem appropriate to point out that trade barriers to the
importation of certain meat products employed by the European Economic Com-
munity and some other trade areas have contributed to the meat import problem
the U.S. now has. If the EEC and others would accept some of the meat now avail-
able for export by such countries as Australia and New Zealand, the United
States would not be subjected to the extensive pressure being applied to break-
down our modest restraints on imports of beef, veal and mutton.
A basic principle of international trade is that commodities move from one
nation to another according to needs and supplies. In other words, surplus com-
modities produced in one nation would move to countries where these com-
modities are in short supply or do not exist at all.
While realizing that this would be an idealistic situation and amounts to over
simplification of what does and can occur in the complexities of world trade,
we do have the obligation to domestic industries to be sure the import volume
of supplementary or competitive commodities not in short supply does not get out
of hand or too far out of balance, and thereby inflict serious injury on any par-
ticular commodity or group of commodities.
To minimize or avoid injury to the domestic cattle business the Congress passed
the Meat Import Quota Law in 1964. The importance of restraining imports of
beef, veal and mutton was clearly evident when cattle prices were seriously
depressed in 1963 as beef imports reached the unprecedented level of 10 percent
of our domestic production. It is important, though, that the operation of the Meat
Import Quota law be examined.
Foreign Agricultural Trade of the United States, Economic Research Service, U.S.
Department of Agriculture, March 1969, p. 8, and February 1970, p. 7.
PAGENO="0110"
3710
EXPERIENCE WITH PUBLIC LAW 88-482, THE MEAT IMPORT QUOTA AC7I OF 1964
It is a fact that the Meat Import Quota Act of 1964 is a ceiling type restraint
pertaining to fresh, chilled and frozen beef, veal and mutton. In fact, the Fair
International Trade Act of 1969 is patterned after this law.
Seemingly, Public Law 88-482 accomplished its purposes from 1964 through
1968, but during that period at least, there was no real test of its effectiveness.
It is now being tested and there is obviously a need to eliminate deficiencies and
close loopholes. The table below, containing figures on a product weight basis and
in millions of pounds, contains data on annual quotas and shipments since 1965.
(In millions of poundsj
-
Year
Base quota
USDA
estimate
Actual
shipments
1965
1966
1967
1968
1969
1970
890.1
890.1
904.6
950.3
988.0
998.8
630.0
800.0
860.0
990.0
1,035.0
21,061.5
613.9
823.4
894.9
1,001.0
11,070.6
?
1 Shipments in the aggregate of 1,084,100,000 pounds less rejections of 13,500,000 pounds, leaving net of 1,070,600,000
pounds.
2 Summation of individual country commitments and/or the voluntary restraint program.
Note that imports did not reach the quota level until 1968. In that year the
amount exceeded the estimate of 990 million pounds by 11 million pounds and
the extra volume was insufficient to trigger the quotas. In 1968, however, apprehen-
sion developed over possible shipments in 1969. In the fall of 1968 a new approach
came into play to supplement the provisions of Public Law 88-482.
This new approach embraced Section 204 of the Agricultural Adjustment Act
of 1956 which authorized the President to enter into agreements with foreign
nations limiting the exports from such countries and the importation into the
United States of any agricultural commodity or product manufactured therefrom.
The Section also authorized the President to issue such regulations governing
the entry or withdrawal from warehouses of any such commodity in order to
carry out the agreements.
The Administration entered into agreements with supplying nations to restrain
their exports in 1969 to a total of 1,035.0 million pounds and each country was
allotted a restrictive level. A concession was made by our government to allow
a volume above the quota figure of 998.0 million pounds, but below the ten percent
trigger level of 1,086.8 million pounds, in return for their acceptance of agree-
ments.
It seemed this approach would be effective, but in the final analysis all nations
except Panama, Haiti and Mexico over-shipped the restraint level. An executive
order under the agreements was issued against Honduras to stop shipments.
However, the order was too late to prevent that country from over-shipping by 6.7
million pounds-nearly 50% above the agreement figure.
Australia then over-shipped 16.5 million pounds, apparently concluding that she
was entitled to similar leeway. In the aggregate, the thirteen supplying countries
sent us 1,070.6 million pounds of accepted product, which was 33.5 million pounds
over the adjusted restraint level of 1,037.1 million pounds in 1969. Actual ship-
ments came to 1,084.1 million pounds, but rejections totaled 13.5 million pounds.
This brings us to the current situation in the early part of 1970.
THE 1970 IMPORT SITUATION
Our government set about to obtain agreements from nations involved to restrain
shipments this year to 1,061.5 mu. lbs. Each country was awarded a restraint level
based on shipments in previous years. Our latest information revea1s that all
countries asked to sign agreements have done so except two. One of these has
executed an agreement, but language clarifications were pending.
Be that as it may, it is apparent from the record of shipments so far this year
that many of the 13 countries involved either do not intend to abide by their
agreements, or hope to pressure the United States into further relaxation in the
agreed levels. The record provides support for these contentions.
Furthermore, there has been public declaration by persons in Australia, at
least, that they intend to make `approaches' this year seeking to ease the quota
PAGENO="0111"
3711
restrictions on meat imported by the United States. It is quite obvious that methods
employed up to this time to over-ride our restrictions amount to something far
beyond approaches.
During the first 4 months of 1970 (imports as of April 30 are latest actual figures
available), nine of the thirteen countries overshipped one-third of their annual
restrictive level . . . some by substantial amounts. Restrictions were not re-
quired or agreed to on a quarterly or four-month basis, but the comparison serves
to emphasize the high rate of shipments that have been arriving.
The table on the next page shows the restrictive amount assigned to each
country, one-third of the restrictive volume, shipments from each country in the
first four months of 1970, and the overage or shortage according to census reports.
All figures again are in millions of lbs. and are product weight.
[in millions of poundsj
Restricted 3~ of restricted Shipments in Overage or
Country amount amount 4 months shortage
Australia
527. 2 175. 7 202. 7
+27.
New Zealand
220. 3 73. 4 0
-8. 4
Mexico
68. 7 22. 9 2
+14. 3
Ireland 65.5 21.8 27. 1 +5. 3
Canada 45.0 15.0 25.2 +10.2
United Kingdom 5. 0 1. 7 1. 0 . -. 7
Nicaragua 39. 3 13. 1 17. 4 +4. 3
Guatemala
22. 3 7. 4 12. 0
+4. 6
Costa Rica
34. 9 11. 6 19. 7
+8.
Honduras~ 14. 7 4. 9 11. 8 +6. 9
ominican Republic
11. 0 3. 7 7
-1.
Panama
5. 4 1. 8 3. 5
+1.
Haiti 2.2 .7 .4 -.3
Total 1, 061. 5 353. 7 425. 7 +72. 0
Total volume of imports received in the first four months of 1970 at 425.7
million pounds is 41 percent of the total restricted figures for this year. Collec-
tively countries have overshipped one-third of their annual volume by 72.0
million pounds. Imports under the 1964 law have thus been coming into the
United States at a projected annual rate of 1,277.1 million pounds or more than
200 million pounds above the agreed levels.
It would appear, at least, that a number of countries are ignoring the generous
allotments that have been awarded under the restrictive agreements. On April 30
Honduras was within 2.9 million pounds of the restricted level of 14.7 million
pounds and probably by this time . . . June 11 . . . has either reached 14.7
million pounds or overshipped that amount. Mexico, Guatemala, and Canada,
at the same projected rates of shipment earlier this year, would exceed their
restricted amounts by August. Costa Rica would reach the level by the end
of July. Australia, the largest supplier, would arrive at its restricted level by
November.
The projection, based on "the same rate of shipments earlier this year", can-
not be precise because monthly shipments as a whole or indiivdually are not
regular. As a matter of fact, though, many countries may reach their restricted
levels earlier than suggested. In every year since 1965, shipments have been
heavier during the middle and latter part of the year.
Moreover, there has been a change in the complection of imports of fresh,
chilled and frozen beef. Historically, the product we have received has been
strictly boneless beef suitable for grinding and processing, meaning uses were
largely for hamburger and manufactured meat products. In recent months, at
least some imported beef has been reecived in the form of primal cuts, or bone-in,
which beef is not neecssarily being processed. It can be sold as table beef either
for use in low-priced restaurants or through retail stores.
It has been reliably concluded that as much as 25 percent of the beef being
imported by the United States is now in cut form. Some estimates run higher.
While we have always been able to substantiate that manufacturing type beef
competes directly with all domestically produced beef, regardless of quality,
beef coming to us in cut form competes absolutely and beyond any shadow of
doubt. A study is currently underway to determine exactly how much beef is to
be shipped to the U.S. in a form other than boneless manufacturing type beef.
Another device is now being employed by some supplying countries in an at-
tempt to circumvent our preesnt law. It is the practice of trans-shipment through
a third country. Australia and New Zealand are those primarily engaged in this
PAGENO="0112"
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device at the preesnt time and are trans-shipping through Canada. In 1969 the
United States received 18.8 million pounds through this route. Thus far in 1970
we have received about 19 million pounds from Australia and New Zealand
through Canada.
After the domestic industry and the United States Government have been
most generous and even lenient to these foreign nations, it is not only dis-
appointing, but down-right disguisting, that supplying countries would resort
to such devices in what is obviously an attempt to circumvent our law.
All of these transparent maneuvers underscore the necessity of tightening
up the provisions of P.L. 88-482. The replacement of standby quotas in the
law with absolute ceilings on imports, and the establishment of these ceilings
on a quarterly basis would accomplish much of that which is necessary. In fact,
we strongly reommend favorable consideration of H.R. 17540, by Mr. Ullman
of this Committee, as well as numerous other like measures which have been
introduced in the House of Representatives and in the Senate.
ATTEMPTS TO PROPOGANDIZE UNITED STATES CONSUMERS AND THE FEDERAL GOVEBNMENT
There is another aspect of the beef business I would like to bring to the atten-
tion of the Committee. It involves a planned program deliberately designed to
influence domestic consumers and officials, and encourage them to bring pressure
for the relaxation or even elimination of the present restrictions on beef
imports.
Beginning some time late year, there was another wholesale attack upon the
cost of beef even though the record clearly shows that live cattle prices, whole-
sale beef prices, `and even beef at retail, have not risen in price during the
past ten years as much as other food items, nor nearly as much as consumer
goods and services, hourly wage rates, or per capita disposable income. It is
apparent that importers and foreign nations, through their agents, are trying
desperately to create alarm in order to gain a bigger slice of the U.S. market
at the expense of the American citizens and taxpayers engaged in the domestic
cattle industry.
They have made, through publications and otherwise, all sorts of unwarranted,
misleading and inaccurate charges designed to build up a case against U.S.
restrictions on meat imports. Among the charges are these:
Imported beef is definitely not competitive with American meats;
Meat is imported only when needed;
The value of imported beef is approximately the same as the value of
U.S. exports of all meat and meat products;
The U.S. needs to supplement a diminishing domestic production of man-
ufacturing grade meat;
Cattle prices reached the highest in U.S. history; and even that
Inspection of foreign meat is generally more thorough than for domestic
ment.
There were others, but it is not our intention to go into detail in refutation
of these ill-advised charges at this time. We have already done that. The point is,
though, that there has been a certain degree of consumption of the arguments
which were designed to perpetrate a hoax on the American consumers and
embarrass the Administration.
THE TRUTH ABOUT BEEF SUPPLIES AND BEEF PRICES
Under date of April 8, 1970,, the National Livestock Feeders Association made
available a documented statement entitled, "The Truth About Beef Supplies
and Beef Prices". The members of this Committee, `as well as all members of
the Congress, received a copy. The many special responses were extremely
gratifying, and we were highly complimented by the fact it appeared in the
Congressional Record several times.
The statement substantiated the fact that beef is a bargain as compared to
other foods, other costs, consumer goods and services, hourly wage rates and
weekly earnings, and per capita disposable income. It emphasized that con-
sumers continue to buy more beef for less, and explained why we cannot afford
and do not need more imported beef.
It outlined sources of increased beef production in the United States during
the next five years, and declared such increases would take place provided there
was sufficient price incentive to producers and feeders.
Beyond this, we projected population figures to 1975, as well as per capita
consumption, and demonstrated that the domestic industry can supply both
PAGENO="0113"
3713
increases, and will do so unless competitive foreign beef is allowed to flood
our market and depress prices. It has always been very perplexing to us how
proponents of increased imports will argue that restricted imports will raise
prices while claiming at the same time that more foreign meat in our market
will not depress prices.
The document clearly stated that beef production is a business operating in
the United States under all the conditions of the United States economy. In
this atmosphere we cannot be expected to supply products at low figures when
nearly all costs and incomes are inflated. As is the case with most other industries
in the United States, neither can we be expected to compete beyond a point with
low wage rates and costs prevailing in most supplying countries.
THE TRUTH ABOUT PROCESSED BEEF SUPPLIES AND PRICES
On April 24, 1970, the National Livestock Feeders Association circulated a
sequel to its initial statement whch was entitled, "The Truth About Processed
Beef-Supplies and Prices". This document was directed toward the production
and availability of processing beef about which numerous inaccurate state-
ments had been made, both as to price and volume.
Likewise, a copy was sent to all members of this Committee as well as the
members of the Senate Finance Committee and members of the Committee on
Agriculture in both Houses of Congress. Responses to our second statement were
equally gratifying.
It pointed out the attempt at obvious distortion of the supply and price
situation and went into detailed refutation of charges made by the Importers
Council of America, Inc., as contained in a booklet published last September.
We went on to prove that the actual supply of processing type beef had increased
substantially from 1964 to 1969 (8,519 million pounds to 9,953 million pounds)
and that the domestic source of manufacturing beef was not drying up as
charged. We documented the facts that while the total per capita supply of beef
rose from 99.8 lbs. in 1964 to 110.6 lbs. in 1969, the per capita supply of processing
beef also went up from 44.3 lbs. to 49.0 lbs.
The claim by proponents of more imports that a shortage of processing beef
exists in the United States, is refuted by the fact that over periods of time the
price of hamburger and other manufactured products have not risen any more
than cuts of beef nor as much as other consumer costs. Furthermore, it was
pointed out that the general price of chucks puts a ceiling on the price of ham-
burger. Had there been any real shortage, the price of hamburger would have
gone up materially.
In conclusion, the statement revealed the fact that while imports in the first
three months of 1970 ran about 109 million pounds above the first quarter of
1969 and 71.9 million pounds above one-third of the restricted level, frozen beef
in cold storage in the U.S. was 101.4 million pounds above a year earlier as of
March 31, 1970. Frozen beef in cold storage was 121.3 million pounds above a
year ago on February 28 and 90.7 million pounds above last year on January 31.
For this record, frozen beef in cold storage amounted to 90.0 million pounds
more than a year ago on April 30.
The statement put the question, "If there is such a terrible demand for proc-
essed beef (that is not being satisfied), why is this greater volume of frozen
beef being held in cold storage?"
CONCLUSION
In conclusion, Mr. Chairman, we again emphasize the need for adjustments
in the foreign trade policies of the United States, not to the extent of curtailing
foreign trade, but to the degree of recognizing the importance of a healthy do-
mestic industry in this Nation's economy, and of preserving for American industry
the major portion of our own market to which we are entitled.
The cattle industry, consisting of both growers and feeders, is among those
extremely vulnerable to the devices of outside interests. The actual production
of a choice steer commenced some two years ago, and actually was started long
before if the time for maturity of ii heifer and the gestation period are taken
into consideration. Flexibility in production is at a minimum and, `besides this
limitation, the resulting consumer product is extremely perishable.
Beef has become recognized as the Nation's most popular food. It remains a
bargain today, by comparison. The best interests of consumers will be served if
policies are embraced which do not injure or cripple the economic well~belng of
the domestic cattle industry. Without reasonable price incentives, encouragement
for expansion and development of beef production will be lacking. Foreign nations
PAGENO="0114"
3714
can be relied upon to take advantage of our higher price levels, but cannot
be relied upon for regular quantities of the kind of beef our people want.
It will be a dark day for this Nation if consumers ever become dependent on
foreign production for any appreciable quantity of their basic food supply, or if
other countries are allowed to beat down the domestic cattle producers and
feeders to the point where increased beef production may be discouraged or even
economically impossible.
TUE TRTJTH ABOUT PROCESSED BEEF SUPPLIES AND PRICES, BY DON F. MAGDANZ,
EXECUTIVE SECRETARY-TREASURER, NATIONAL LIVESTOCK FEEDERS ASSOCIATION
This document is a sequel to that prepared by this Association on April 8, 1970,
entitled, "The Truth About Beef Supplies and Beef Prices". Our statement of
April 8 referred primarily to total beef supplies and over-all prices as well as the
prospect for future production through 1975. This document is directed toward
the production and availability of processing beef about which numerous inac-
curate statements have been made recently both as to price and volume available.
OBVIOUS DISTORTION OF SUPPLY AND PRICE SITUATION
It is obvious that a determined effort is being made by the Meat Importers
Council and by agents for foreign nations to distort the supply and price situa-
tion of processing beef in the U.S. In so doing, they are deliberately propagandiz-
ing the American consumer for the sole purpose of doing away with the modest
import restrictions we now have. If these restrictions are relaxed, supplying
nations could then load our market with frozen boneless `beef and a relatively
few local importers would benefit personally by handling a substantial increase
in volume of product.
They obviously have no concern for our domestic beef industry and, while
posing as great benefactors to American consumers, they have no concern for the
future welfare of consumers. Should the domestic beef industry be crippled to
the extent it cannot fulfill future requirements of this Nation as a result of ex-
panded competition from foreign production, the beef supply would be in serious
jeopardy since foreign nations could supply neither the quantity or quality of `beef
desired by the growing and affluent population in the U.S.
In September of 1969 the Meat Importers Council of America, Inc., circulated a
booklet entitled, "The Case Against Restrictions on Meat Imports." The booklet
is full of misleading statements, twisted analyses and inaccurate conclusions,
designed to propagandize the consumers of the U.S. The introduction contains the
argument that, "The U.S. needs to supplement a diminishi~ng domestic produc-
tion of manufacturing-grade meats." The facts and records show that since
1964 we have had an increasing amount of processing meat available to con-
sumers both in absolute quantities and per capita supply.
Seizing upon a short-lived bulge in cattle prices during mid-1969. the booklet
refers to, "The highest cattle prices in U.S. history." This rise in price which
did occur was of short duration beginning in April and ending the second week in
June. Prices then receded to levels that prevailed in the first three months of
1969. Even at the highest point, however, live cattle prices had not reached
levels that prevailed in 1952. eighteen years before.
Be that as it may, we wonder what is so wrong about beef cattle prices reach-
ing their highest point in history in 1969. Certainly cattle were not the only
commodity that attained highest prices in history during that year. since every-
thing else also set record prices as the general price level climbed. By 1969 we
had record hourly wage rates, record disposable income, record prices for
consumer services, record payments of Social Security benefits, record welfare
payments and the highest figures for practically everything that can be men-
tioned. How can anyone justify picking out cattle prices and condemn them for
reaching the highest level in history, particularly when it was not true.
At another point, the booklet states, "It (imported fresh-frozen beef) is
definitely not comparable to or competitive with American meats of higher grade
which are used as table beef and classified as `Prime', `Choice' and `Good'. While
not necessarily being comparable to the better grades of beef being produced in
the U.S., foreign beef is directly competitive with domestic supply because a
great deal of processing beef is derived from our better grade animals. Further-
more, not all fed animals are finished to the choice grade and some of them do
not even reach good grade. Moreover, processed meat products in the retail
counters, such as haniburger or frankfurters, are definitely competitive with
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steak, ribs and roasts as consumers make their selection according to price as
well as their particular needs and desires at the moment.
The argument that imports do not affect fed beef (and thus fed cattle prices)
to any degree because such imported products are used primarily in the manu-
facture of processed products is ridiculous.
Also, the contention imports do not affect fed prices overlooks the very im-
portant fact that over one-half of the domestically produced processing meat
comes from fed carcasses (See Table 2). This portion of beef available for proc-
essing has been steadily increasing, not only because larger numbers of cattle are
being fed, but also because the grade standards were relaxed a few years ago
requiring less finish for an animal to reach the Good, Choice and even Prime
grades.
Beef is its own closest competitor regardless of the form in which it's marketed.
Attempts are often made to draw a fine line between the factors which affect the
fed market and the so-called cow or processing type market, and to treat these
as two separate and distinct markets as far as price is conceriied.
Such an analysis is not valid because there is a very definite and intertwined
relationship among the various segments of the cattle and beef market. Any factor
which affects one class of cattle or beef very definitely does not do so at the ex-
clusion of the other classes. The above conclusion is logical in view of the very
real competition between various cuts and/or products in the retail counter and
the substitutability among classes of beef.
The unfair competition of foreign beef, however, does not stop with its in-
fringement on the domestic cattle industry. It also competes unfairly in the
market for other domestic meat animals and products such as hogs, pork, lamb,
as well as domestic poultry and fish.
At another point the booklet argues. "It is largely the drying up of this
domestic source of manufacturing meat and the soaring demand for convenience
low cost meats which has made the importation of meat necessary." Again the
record shows that the supply of manufacturing and processing meat in the U.S.
is not drying up. but, as mentioned before. has actually increased. We could go
on and on with refutation of statements contained in the booklet; however, that
appears unnecessary. Let's examine the facts.
THE ACTUAL SUPPLY OF PROCESSING BEEP
Manufactured or processed beef from domestic production comes largely from
two sources. First. there is the production of cow and bull beef. much of which is
extremely lean because the animals slaughtered have been produced on grass
and not in the feedlot. The other source is that portion of steers and heifers,
both fed and non-fed, which is not sold as fresh beef cuts in the retail counter as
table beef. Fresh beef cuts largely come from the loins, rounds, ribs and chucks.
Much of the remaining parts of the carcass, including the plates, shanks, brisket
and trimmings, wind up as ground fresh beef which may be sold as hamburger or
is used in other processed products. Even part of the chuck may find its way into
hamburger instead of being sold as chuck roasts, since prices of this particular
cut are often comparable or close to prices received for hamburger.
Table I contains the figures to show the proceesing beef produced domestically
from 1964 through 1969, which volume, when added to imported beef, gives the
total supply of processing beef available to tT.S. consumers.
TABLE 1,-COMMERCIAL DOMESTIC BEEF PRODUCTION-STEER AND HEIFER BEEF PRODUCTION-COW AND
BULL BEEF PRODUCTION-DOMESTIC PROCESSING BEEF PRODUCTION-I MPORTS
EIn millions of poundsj
Total beef
production 1
Steer and
heifer beef
production 2
Processing beef
from steers
and heifers3
Cow and bull
beef
production 2
Imported beef
carcass weight
equivalent 1
Total processing
beef
1964
1965
1966
1967
1968
1969
18. 456
18,693
19,726
20,212
20,875
20,953
15. 023
14,457
15,662
16,478
17,034
17, 150
3,906
3,759
4,072
4,284
4,429
4, 459
3,433
4,270
4,064
3,741
3,841
3,880
1, 180
923
1,182
1,313
1,500
1, 614
8,519
8,952
9,318
9,338
9,770
9,953
1 Livestock and Meat Statistics, Statistical Reporting Service, U.S. Department of Agriculture, Statistical Bulletin No.333.
2 Computed from total-domestic beef production, steer and heifer slaughter, and cow and bull slaughter.
3 Computed from domestic production of steer ond heifer beef using accepted fact that 26 percent of all steer and heifer
beef is used in processing and manufacturing.
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The information in Table I clearly shows the increasing volume of processing
beef from steers and heifers in the domestic slaughter from 1964 through 1969.
In addition, cow and bull beef have been increasing since 1967, although by 1969
had not quite reached the highest figure in 1965. The last column in the table adds
the processing beef from steers and heifers, domestic cow and bull meat produc-
tion, and the volume of imported beef (carcass weight equivalent) to show the
total volume of processing beef that has been available to consumers in each of
the six years. Note the steady increase from 8,519 million pounds in 1964 to 9,953
million pounds in 1969, an increase of 1,434 million pounds or 16.8%.
Table II below uses some of these same figures to show the per capita supply of
beef in the United States as well as the per capita supply of processing beef,
including that which is imported.
TABLE Il-PER CAPITA SUPPLY OF DOMESTIC BEEF AND IMPORTED BEEF-PER CAPITA SUPPLY OF
PROCESSING BEEF
[In millions of poundsj
Total beef
production 1
Imported beef,
carcass weight
equivalent
Total supply
(minus exports)
Per capita
supply2
pro
Total
cessing
beef°
Per capita supply
processing bee
1964
1965
1966
1967
1968
1969
18, 456
18, 693
19,726
20, 212
20,875
20,953
1, 180
923
1,182
1, 313
1,500
1,614
19, 545
19, 525
20,908
21, 437
22,267
22,485
99. 8
99. 3
104.0
105. 9
109.4
110.6
8, 519
8, 925
9,318
9, 338
9,770
9,953
44. 3
46. 0
47.3
46. 9
48.6
49.0
I Livestock and Meat Statistics, Statistical ReportingService, U.S. Department of Agriculture, Statistical Bulletin No. 333
2 National Food Situation, Economic Research Service, U.S. Department of Agriculture, February 1970, p. 15.
From table I.
Note that since 1964 per capita supply of all beef has risen from 99.8 pounds
to 110.6 pounds. At the same time, the per capita supply of processing beef has gone
up a like percentage from 44.3 pounds to 49 pounds. The contention there is a gap
in the supply of processing beef in the United States is an absolute myth and
cannot be supported or substantiated.
PROCESS BEEF DEMAND IS "CREATED"
It has sometimes been stated that the principal reason for substantial increases
in meat imports in the United States is the increased demand in this country for
processed products. It must be realized thiit ~this so-called demand is a "created
demand" and a large tonnage which has moved from foreign nations is prompted
as the result of offering a vast array of processed products to consumers, rather
than any specific "call" from consumers for this type of product.
Instead, foreign nations desiring to export beef products have poured them
into the United States and, along with the importers of these products, are now
trying to convince United States consumers that they need more processed meat.
They are also encouraging consumers to insist on the relaxation or elimination of
import restraints.
SHORTAGE DOES NOT EXIST
If there is or has been a serious shortage of processing beef in the United States,
why has not the retail price of hamburger, for instance, changed much more than
prices of table cuts such as sirloin steak or beef ribs. According to Bureau of
Labor Statistics the average price of hamburger in the United States during 1968
was 56.10 per pound. In August, 1969, when hamburger reached its peak price, the
average was 65.6~ per pound, an increase of 9.5ç~ or 16.9%.
The average price of sirloin steak in 1968 was 119.50 per pound. During the
highest months in 1969, which happened to be July, the average price of sirloin
steak in the United States was 141.90, an increase of 22.40 per pound or 18.8%.
If there was such a shortage of processing beef, as has been alleged, why is it
that hamburger did not rise much more in price on the average than the example
of sirloin steak that has been used.
By February, 1970, the average price of sirloin steak in the United States did
come down to 130.90 which was 11.40 per pound over the average in 1968 or 9.5%
higher. The average price of hamburger did hold fairly steady at 65.30 per pound
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or 9.20 per pound over 1968, which was 16.4%. It's true that the price of hamburger
did not decline as much as certain fresh table cuts, but neither did the price
increase as much during the temporary price bulge in 1969.
If there is any validity to the allegation made by proponents for increased
imports, why has not the price of hamburger gone up materially to reflect this
contended shortage of processing meat? The truth of the matter is the shortage
does not exist.
So far we've demonstrated there is no shortage in the normal sources of the
supply of processing beef. There is still another source of beef available for sale
as hamburger which tends to provide a ceiling on the price of hamburger. We
refer to chucks from both steers and heifers.
For quite a number of years, the price of chuck roasts at retail has closely par-
alleled the retail price of hamburger at figures from 4c to lOc above. Further-
more, most of the time domestic boneless chuck is sold in the wholesale market
for less than domestic boneless bull beef and at times is sold for less than im-
ported boneless bull beef.
For example, on August 4, 1969, domestic boneless bull sold at $63.75 per cwt;
imported bull beef was $62.50 and domestic boneiess chuck was $62.75. On
November 3, domestic bull beef was $60.00, imported bull beef was $58.00, and
boneless chuck $57.50.
Continuing with examples, on February 2, 1970, domestic bull beef was $65.50,
imported bull beef was $61.75, and boneless chuck was $63.50. On April 16, do-
mestic bull beef sold at $68.00; imported bull beef brought $63.75, and domestic
boneless chuck sold at $67.00.
CONSUMER DECEPTION
The National Livestock Feeders Association contends that those who are in-
sidiously attempting to bring about relaxation of import restrictions and open
the door for increased volume of foreign beef, are perpetrating a hoax on con-
sumers of the United States, and are using it as a device to bring pressure on the
Administration. This is a highly organized and carefully planned maneuver that
should be stopped cold by complete exposure of the facts.
Table III (See Page 8) containing the record of frozen beef in cold storage at
the end of each month since January 1968 vividly exposes the deliberate attempt
to falsify the supply situation.
In 1970 foreign nations have been shipping us products (covered by the 1964
Meat Import Law) at the unprecedented annual rate of 1.3 billion pounds. This
annual rate contains an estimated volume for March, 1970, of about 100 million
pounds.
In so doing, an attempt is being made to show that this high rate of imports
has little or no effect on our domestic market. There is more to the `situation than
meets the eye.
TABLE 111.-FROZEN BEEF IN COLD STORAGEI
[As of the end of each monthj
[Million poundsj
1968
1969 1970
Change from
previous year
January
February
March
261.369
239. 542
211.145
265.860 356.540
256.979 378. 300
261.656 363.012
90.680
121. 321
101.356
April
May
June
July
August
202. 376
182. 325
186. 769
200. 923
218. 268
254. 428
234. 055
2~8. 614
227. 203
254. 255
52. 052
51. 730
31. 845
26. 280
35. 987
September
227. 454
251. 775
292. 862
321. 888
65. 408
70. 113
October
November
282. 255
281. 549
320. 938
340. 515
38. 683
58. 966
December
1 Cold Storage Reports, Statistical Reporting Service, U.S. Department of Agriculture, Feb. 1, 1969, through Apr. 1, 1970.
Column 4 of Table III shows the increased volume of frozen beef in cold storage
as of the end of each month compared to the same month a year earlier. Note that
PAGENO="0118"
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on January 31, 1970, frozen beef in cold storage was 90.680 million pounds above
January 31, 1909. February, 1970, was 121.321 million pounds above a year earlier,
and March was 101.356 million pounds higher. Cold storage holdings of frozen
beef in the last nine months of 1969 were only modestly above a year earlier with
the exception of October which was 70.113 million pounds above 1968.
If there is such a terrific demand for processed beef, why is this much greater
volume of frozen beef being held? We submit that frozen beef is being deliberately
held out of market channels after it has been recorded as imported, in an attempt
to force prices of manufactured products to go up, thus providing more ammu-
nition to use in an effort to repeal the 1964 Act or prevail for the suspension
of qutoas once they might be put into effect.
In the opinion of this Association, those who are attempting to hoodwink the
consumers of our Nation need to be told bluntly that it is not going to work. Not
only are they advancing arguments that do not hold water, there is evidence
of a deliberate attempt to force a situation on American consumers that is con-
trary to actual circumstances. To be equitable to American consumers and the
domestic cattle industry, the facts must prevail.
APRIL 8, 1970.
THE TRUTH ABOUT BEEF SUPPLIES AND BEEF PRICES BY DON F. MAGDANZ,
EXECUTIVE SEcRuTARY-TREASURER, NATIONAL LIVESTOCK FEEDERS AssocIATIoN
With all of the clamor being heard again about beef prices and what appears
to be the beginning of another wholesale public attack upon the cost of the Na-
tion's most important food item, it would seem the time has come to state a few
hard, cold facts and set the record straight.
As suppliers of the fed animals from which consumers enjoy Choice beef, as
well as Good and Prime, it is disgusting that whenever the cattle feeders and
cattle growers realize or approach receiving prices for fed animals that allow
them a decent return for effort, investment and risks incurred, some persons
feel called upon to scream at the top of their lungs about the price of beef.
Sometimes this hue-and-cry comes from individual consumers or small groups
of consumers. At other times, it comes from over-zealous writers who apparently
are trying to "whip something up".
Through United States citizens registered as foreign lobbyists, foreign nations
are trying desperately to create alarm in order to get a bigger piece of the U.S.
market for their clients at the expense of American citizens and taxpayers
engaged in the domestic cattle industry. U.S. importers are also in on the act.
Some manufacturers, who would like to expand markets for their products in
the nations who want to ship us more beef, are fanning the fire.
Always the fingers are pointed at high beef prices with apparent disregard for
the facts in the case.
Are beef prices high compared to other consumer items, services, wages, taxes,
disposable incomes, etc.? The answer must be an emphatic, NO! And there isn't
any justification for all of the alegations poured forth from a variety of sources.
BEEF IS STILL A BARGAIN
The evils of inflation have brought about price and cost increases of practically
every item we might name. In the past 10 years-since 1960-many of these
increases have been substantial. But the price of fed cattle, wholesale beef, and
even retail beef, have not nearly kept pace with the rest of the economy.
All that cattle feeders and growers want is a fair shake. They're not getting it
and, except for occasional brief periods, haven't realized a return for nearly 20
years commensurate with inflated costs and prices.
Even in mid-year 1969, when cattle prices and wholesale beef did move upward
temporarily, the average price of fed steers, Choice grade, at the peak time was
slightly less than in 1952-18 years ago. Prices were, for two weeks in June, 1969,
about 30 percent above the average in 1960. In less than 4 months, Choice steers
were back down to only 10 percent above 1960. Wholesale beef prices declined
similarly. Retail beef prices also came down, though not as much. But this is
the fourth.month of 1970. What is the situation now? It's simply this.
At today's prices, beef is still the best bargain in the food stores. The same
was true last summer and fall even though prices were higher than now.
PAGENO="0119"
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In February 1970 the average price of Choice steers at Chicago was $30.27 per
cwt. It was $26.24 in 1960.1 If Choice steer prices had gone up during the 10 year
period and kept pace with the cost of consumer services (less rent), Choice steers
would have brought $38.39 per cwt., a figure $8 higher than they actually were,
and $4 above the highest average for Choice steers at the peak time last year.
If `the average price per lb. of beef at retail had gone up as much since 1960 as
these same consumer services, the average cost of beef to the consumer in February
would have been $1.18 per lb. instead of the actual 97.4 cents. Sirloin steak would
have been selling on the average at about $1.60 per lb. instead of $1.31 and
hamburger (not to be confused with ground beef) would have cost 80 cents
instead of 64.5 cents (actual figures from Bureau of Labor Statistics, January
1970).
Had Choice steer prices gone up since 1960 as much as the hourly earnings of
labor (non-agricultural), Choice steers at Chicago would have sold for $39.54
per cwt. instead of $30.27. If Choice beef at retail had kept pace with these hourly
earnings, the average over the nation would have been $1.22 per lb. Sirloin steak
would have been selling for at least $1.65 and hamburger at about 83 cents.
In the fourth quarter of 1969 (latest figures available) per capita disposable
income in the U.S. stood at $3,172.00, an increase of 63.8 percent from 1960. If
the price of Ohoice steers had moved up relatively, feeders would have been
getting $43.00 per cwt. The average,price of Ohoice beef at retail would have
been $1.32 per lb. Sirloin steak would have had to `bring about $1.80 and ham-
burger around 89 cents per lb.
A comparison of prices in 1960 to those in February 1970 shows that neither
Choice steers, nor Choice beef in the wholesale market, nor even the average
price per lb. for Choice beef at retail, have gone up nearly as much as other foods,
consumer services, hourly earnings, disposable income, etc.2
Choice steers rose from $26.24 per cwt. to $30.27, an increase of 15.3 percent,
while per capita disposable income went from $1,937.00 to $3,172.00-an increase
of 63.8 percent. The average price per cwt. of Choice beef carcasses at Chicago
went from $43.98 to $46.74, an increase of 6.3 percent, while the average hourly
earnings of non-agricultural labor went up 50.7 percent and average weekly
earnings rose 45.2 percent.
The average price per lb. of Choice beef at retail went from 80.7 cents to
97.4 cents (in the highest month of 1969, the price was only 1.021/2), an increase
of 20.7 percent, while hourly earnings of labor in the manufacturing industry
went up 63.0 percent, and the per capita expenditures for other goods and
services went up 67.7 percent.
Meanwhile, still covering `a 10-year period, 1960 to February 1970,
Average consumer price index-all items-went up 28.5 percent.
Average cost of all food purchased by consumers, up 29.6 percent.
Average cost of all consumer services rose 41.4 percent.
Average cost of consumer services, less rent, up 46.3 percent.
Average hourly earnings, non-agricultural, went up 50.7 percent.
Average hourly earnings of labor, manufacturing, up 45.1 percent.
Average hourly earnings of labor,' construction, up 63.0 percent.
Average hourly earnings of labor,' retail trade, up 57.9 percent.
Average weekly earnings, non-agricultural labor, up 45.2 percent.
We wonder how anyone can defend a charge that beef prices are too high.
MORE BEEF FOR LESS
But this is not the whole story. The ~cattle feeding and producing industries,
even though often operating in a marginal or submarginal profit climate, in-
creased beef production from 14.75 billion lbs. in 196O~ to 20.95 billion lbs in
1969,~ an expansion amounting to 42 percent. On a per capita basis, the industry
supplied each man, woman and child in' the United States with 103.1 lbs of beef
in 1969. Adding 7.5 lbs. of net imports of beef per capita, the total supply per
person amounted to 110.6 lbs., an increase of 30.2 percent from the 85.0 lbs. of
beef available in 1960.
1 See Appendix, Table I, with complete referenceq.
2 See Appendix. Table I, with complete references.
Livestock and Meat Situation, Economic Research Service, USDA, November 1968, p. 26.
4Ibid., March 1970, p. 24.
PAGENO="0120"
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But to buy this Increase of 30.2 percent (25.6 lbs. more per person), con-
sumers were able to drop the percentage of disposable income spent for all food
from 20.0 percent in 1960 to only 16.4 percent in 1969-3.6 percent less or a de-
cline of 18 percent. Meanwhile, with a 63.8 percent increase in per capita dis-
posable income, they spent 2.5 percent more of it for other goods and services.
In fact, per capita expenditures for food rose $131.00, or 33.8 percent, while
expenditures for other goods and services went up $956.00, an increase of 67.7
percent.
At this point it is appropriate to explain differences in domestic production
and consumption-per-capita figures since many who argue the meat price case
do not differentiate. Production of beef is total dressed weight from U.S. slaughter
which, in 1969, was 20.95 billion lbs. Consumption per person figures results from
dividing the population into the total supply available, the latter being produc-
tion plus imports less exports. In 1969 imports of beef amounted to 1.614 billion
lbs. (carcass weight equivalent) and exports were 82 million lbs. The resulting
total supply available for consumption amounted to 22.485 billion lbs. in 1969.
Division by the population of 203.2 million persons in 1009 produces per capita
consumption of 110.6 lbs. of which 103.1 lbs. was domestic production and 7.5
lbs. was imported beef.°
WE CAN'T AFFORD MORE IMPORTS
Obviously, to generate pressure for modification of the 1964 Meat Import Law,
doubt is being raised that the beef supply from domestic production will be
adequate to meet demand by 1975. In other words, fear is being aroused that
there will be a shortage of beef by or before 1975 sending beef prices to much
higher levels unless we open the doors for expanded foreign shipments. We
challenge these suggestions.
We further contend that such tactics are being used to create a situation that
will lower beef prices from present levels even though we have shown clearly
that beef prices have not kept pace with other costs and prices and, frankly,
are too low now. Suggestions (in the atmosphere of present livestock and beef
price relationships) that some new commission be charged with the responsibility
of determining future demand and domestic supply, and the volume of foreign
meat that should be admitted under these determinations, smack heavily of a
move to deliberately lower beef prices to consumers. This is true despite the
language in the suggestion that proper recognition be given to a reasonable
profit for the domestic beef industry.
In the face of rising costs of production, including labor, taxes, equipment,
supplies, services, etc., and increased costs of slaughtering, processing, fabri-
cating, distribution, and sales, we don't see how anyone can expect the domestic
industry to furnish quality beef to consumers at lower figures per pound. Par-
ticularly is this true when consumers are demanding more services at the meat
counter including extra trimming, more boning, and special treatment, and with
higher disposable income more of them are wanting the more popular cuts, such
as steaks and ribs.
The record will show that the domestic industry has demonstrated it will supply
consumers with the quantity of beef they want and need. It is safe to say that
the domestic industry will continue this supply in the future, provided consumers
are willing to pay what it costs to produce, process, and distribute this supply
for them.
At the same time, we suggest certain discouragement among cattle feeders
and cattle growers from consumer resistance to what are still reasonable prices
for beef. Should such discouragement become wide spread, the industry as a
whole may not supply the increases which may be necessary to completely fill the
demand of consumers. It is like anything else; industry will furnish the product,
but only if consumers are willing to pay the cost.
In order to meet demand in the future, it is obvious that some expansion in
beef production will be necessary. There are differences in opinion on how much
expansion will be required. Reserving comment on these differences until a later
paragraph, let's first look at sources of increases in beef production.
Economic Indicators, prepared for the Joint Economic Committee by the Council of
Economic AdvIsers, March 1970, p. 5.
Livestock and Meat Situation, Economic Research Service, USDA, March 1970, p. 24.
PAGENO="0121"
3721
WHERE DO WE GET MORE DOMESTIC BEEF?
Expansion in beef production arises from several sources. It results from in-
creasing the number of fed cattle through a reduction in the slaughter of calves
and from the reduction in slaughter of non-fed steers and heifers; and finally,
from an increase in the production of more cattle (meaning more cows to pro-
duce calves).
Since 1960, calf slaughter in the United States has declined from 8,225,000 head
to 4,858,400 head 8 in 1969. Most, if not all of these calves found their way to
feedlots and produced about 630 lbs. of beef per head instead of about 130 lbs.
of veal. It is reasonable to predict that calf slaughter will decline still further to
the point where we may be slaughtering only about 2,800,000 head of calves in a
given year adding some 2,000,000 head of cattle which will yield about 500 lbs.
more beef animal.
In the same year, 1960, the slaughter of non-fed steers and heifers totaled 5,664,-
000 head.° By 1969 this number had been reduced to 3,Ø33,ØØØ10 Again, these
cattle found their way into feedlots, and each yielded about 630 lbs. of beef per
head instead of about 360 lbs. considering the non-fed animals had been slaugh-
tered at 700 lbs. It is again reasonable to predict from past experience that the
number of non-fed steers and heifers in the slaughter will be reduced still further
and soon amount to only 2,000,000 head per year. This would throw something
over 1,000,000 head of additional cattle into feedlots and a corresponding increase
in beef production would result.
In fact we can calculate an approximate amount of increased beef that will
result from these two changes in slaughter. Adding 2,000,000 head of cattle to
the feeding operation as a result of reduced calf slaughter with 500 lbs. more
beef produced per animal above what was produced as veal, we come up with an
increase of 1.0 billion lbs. of beef. Likewise, redirecting 1,000,000 head of non-fed
steers and heifers into feedlots and realizing 630 lbs. of beef per head instead of
360 lbs., we come up with an additional increase of 270 million lbs. of beef.
These two sources alone, within the space of 1 or 2 years, would add 1.270 bil-
lion lbs. of domestic beef for consumers. It is reasonable that these changes will
take place very soon based on the pattern in recent years. It's a foregone con-
clusion, though, that the slaughter of calves will probably never be reduced to
zero, nor are we apt to ever feed all of the steers and heifers now produced in the
United States. Some of the latter will always be slaughtered as what we call
non-feds, although the number in this classification will undoubtedly decline.
As indicated, a third avenue for increased beef production is through the pro-
duction of more cattle-meaning more cows to raise calves. This source of ex-
panded production requires more time than the other two, but the process is
already underway. With rather stable cow numbers on January 1, 1966, 1967,
and 1968 of just a few more or less than 50,000,000 head, an increase in cows and
heifers two years old and older of 330,000 head took place by January 1, 1969.
On January 1, 1970, the estimated inventory of cows rose another 390,000 head
to 51,308,000.11 Increases in these two years represent the first significant change
in cow numbers we have seen since about 1964 and is the basis for l'lie previous
statement that expansion in the cow herds is already underway.
The change in cow numbers from January 1, 1969 to January 1, 1970, however,
was a modest 1.8 percent. We are not suggesting the same rate of increase of cow
numbers will take place in the next three years, but a reasonable rate of 1.5 per-
cent would place 53,652,000 head of cows in the inventory on January 1, 1973.
Calves from these cows on hand would be reaching the market as fed beef in 1974
and 1975. Such an increase, along with the other changes in patters which have
just been reviewed, would easily be sufficient to supj~ly the nation with an adequate
amount of beef per capita, and more than is available to them today.
7Livestock and Meat Stati8tic8, Economic Research Service, USDA, Star~istlcal Bulletin
No. 333, August 1964, p. 64.
8 Live8tock Slaughter, Statistical Reporting Service, USDA., December 1969, n. 2.
Calculated from total Slaughter of Cattle in 1960, Ibid., No. 7, of 25 224 000 head
less slaughter of fed marketings and slaughter of cows and bulls.
10 Calculated from total of cattle in 1969, Ibid., No. 8, of 35,224,000 head, less slaughter
of fed marketings and slaughter of cows and bulls.
11Livestoclt, and Meat Situation, Economic Research Service, USDA, March 1970, p. 6.
46-127 0-70-pt. 13-8
PAGENO="0122"
3722
Cattle producers, however, will need some definite encouragement to retain
additional numbers of she-stock in their herds in order to produce the increase
in calves from which consumers can eventually obtain additional beef supplies.
This encouragement must come from prices sufficient to compensate them for
their production and will not result if wide-spread public resistance to meat prices
appears whenever returns from live animals approach a favorable level.
HOW MUCH BEEF DO WE NEED?
As indicated previously, there is a difference of opinion as to how much beef
will be needed by 1975. Some projections call for as much as 27 billion pounds.
Others range down to 26.3 billion and still lower to 25.8 billion. Frankly, it's only
reasonable to assume that 25.8 `billion pounds by 1975 is a higher volume than
can be sold to consumers `at prices providing reasonable returns to producers.
We suggest that the very maximum that can be available without seriously de-
pressing the domestic market would be 25.3 billion pounds. In order to arrive at
a possible figure five years hence, though, `two projections need to be made-
population and consumption per capita.
Seemingly, population projections can be made with reasonable accuracy.
According to Government sources the population since 1967 has been increasing
at `about 1 percent per year. Prior to that time, over a `two year period the in-
crease was at the rate of 1.1 percent per annum. With the population of 203,216,-
000 in 19G9,~ a 1 percent increase per year would mean a population by 1975 of
215,690,000 persons. Under modern circumstances this projection appears far
more realistic than some which would indicate 219 million people, or more, five
years hence.
The volume of beef that persons will buy at prices favorable `to producers pres-
ents a more speculative projection. We believe it a foregone conclusion they would
not accept a rate of increase per capita anywhere near that which took place from
1960 to 1970, which actually amounted to over 25 pounds per person. In fact, an
increase of per capita supplies of more than 6 pounds to 7 pounds per person
would be the outside limit which could be sold at `present prices, or levels more
favorable. Beginning with 110.6 pounds per capita consumed in 1969, a 1 percent
increase per year would mean 117.4 pounds per capita by 1975. Anything more
than this, we contend, would `be unrealistic and exceedingly dangerous to the
domestic industry.
Arguments tha't the consumption of `beef in foreign countries may `be 120
pounds per person to as mu'ch as 190 pounds per person, thus indicating that the
U.S. has not even begun to reach its potential, are not realistic or justified. Per-
sons in these other countries `are largely `beef consumers whereas `the U.S. has a
wide variety of other meat products which are being consumed. In addition to
110.6 pounds of beef consumed per capita in the U.S. in 1969, the civilian popula-
tion also consumed 3.4 pounds per person of veal, 3.4 pounds of lamb and mutton
and 64.8 pounds of pork, for a total of 182.2 pounds of red meat per person. Over
and above this they consumed 47.6 pounds of poultry and 11.0 pounds of fish for
a gran'd total of at least 240.8 pounds of high protein food `per capi'ta.~3
Without question, beef has become the most popular of any of these products
mentioned. But we cannot ignore the fact that `there is a practical limit `to `the
amount of `food which humans can consume and will pay `a fair price for.
Recall now our projected population of 215,690,000 persons `by 1975. Applying
possible maximum per capita consumption of beef `at 117.8 pounds per person.
it is 1o~ical that the total supply of beef in the U.S. by 1975 should not exceed
25.322 billion pounds if the domestic industry would realize reasonable returns
for its production. The quantity of additional beef that would be required from
domestic production by 1975 and its sources of availability are clearly demon-
strated in the calculations that follow:
~ Economic Indicators, prepared f~r Joint ~ommittee by Council of Economic Advisers,
March 1970. p. 5.
~ National Food Situation, Economic Research Service, USDA, February 1970, p. 15.
PAGENO="0123"
3723
Estimated maximum permissible supply of beef in 1975___bil. lbs._ 25.322
Volume of imports allowable in 1975 in same proportion to supply
as in 1969 (carcass weight equivalent) do__ -1. 823
Net volume of beet permitted from domestic production in
1975 do~ 23.499
Domestic production in 1909 do____ -20. 953
Additional domestic production needed by 1975 to make avail-
117.4 lbs. of beef per person for 215,690,000 do__ 2. 546
Anticipated increase in domestic production from increased
slaughter of fed animals (transfer from calf slaughter and non-
fed steer and heifer slaughter) (see page 8) do~~ -1. 270
Additional domestic production needed from increased num-
ber of cattle (more cows and calves) do~~ 1. 276
To produce 1.276 bil. lbs. of beef, additional number of head in
slaughter at 630 pounds slaughter weight per head head__ 2, 025,400
Projected possible increase in number of cows by January 1, 1973;
their calves would be slaughtered in 1974 and 1975 (see
page 9) do~_. 53, 652, 000
Cows in the inventory January 1, 1970 do____ -51, 30~, 000
Possible number of additional cattle available for slaughter
by 1975 do_ 2,344,000
Thus, it can be readily realized that the~addition'al beef which may be required
by 1975 is completely within the realm of possibility through increased fed cattle
slaughter as a result of both reduction of calf slaughter and lower non-fed
slaughter of steers and heifers, as well as from increased number of calves from
a reasonable increase in beef cows.
In fact, to produce the volume of beef needed for a 1 percent increase in per
capita consumption and a 1 percent annual increase in population, less than the
anticipated rate of increase in beef cows which we have projected would be
required. In other words, the rate of increase in beef cows could even fall short
of that explained earlier and we would still have available for consumers a suffi-
cient supply of beef. With fulfillment of all projected increases from domestic
sources, there would be more reason than ever to restrict imports further.
Along with increased production of domestic beef which can be expected to
occur, at least up to limits prescribed if consumers will pay for the produc-
tion, it must be emphasized that foreign nations will have a share in this ex-
panded market in accordance with the guidelines set up in the Meat Import
Law of 1904. In the opinion of this Association, this is more than they are
entitled to, and any fracture of the restrictions now in force can have a devas-
tating economic effect on the domestic industry. The establishment of a con-
sumer oriented commission with authority to project domestic production and
allow for an increased volume of imports, would endanger the most important
segment of agriculture industry in the U.S. In our atmosphere of high costs,
U.S. producers can in no way compete with the low cost production possible
in most foreign countries who are supplying us with beef, and should not be
expected to.
BEEF PRODUCTION IS A BUSINESS
It may be argued that some beef prices, even at fair levels, are beyond what
low income families can afford to pay. This may be true, and those in the beef
producing industry are sympathetic to those whose incomes are not adequate to
satisfy their wants and desires.
But, the more popular cuts of beef are not the only items these people can't
buy. Furthermore, there would be many less popular and less expensive cuts
of meat within the financial reach of these families.
`The cattle feeders and cattle producers are in `business for a livelihood. To stay
in business and expand their production they have to meet higher costs, higher
taxes, higher wages, and higher everything. They can't stand these inflated
figures if their returns are geared to what lower income people can afford to
pay. They won't be able to stay in business, nor could any other industry sur-
vive in the United States under those' circumstances.
PAGENO="0124"
3724
APPENDIX-TABLE
Date
Amount Percent
Average price of choice steers, Chicago, per hundredweight_ - 1960
February 1970
Average price per hundredweight, choice steer beef, Chicago, 1960
600 to 700 pounds wholesale. February 1970
Average price per pound, choice beef at retail (cents) 1960
February 1970
Consumer price index, all items 1960
February 1970
Average cost all food purchased by consumers 1960
February 1970
Average cost all consumer services 1960
February 1970
Average cost all consumer services, less rent 1960
February 1970
Average hourly earnings, nonagricultural 1960
February 1970
Average hourly earnings, manufacturing 1960
February 1970
Average hourly earnings, construction 1960
February 1970
Average hourly earnings retail trade 1960
February 1970
Average weekly earnings nonagricultural 1960
February 1970
Per capita disposable income 1960
4th quarter 1969
Per capita expenditures for food 1960
4th quarter 1970
Per capita disposable income spent for food, percent 1960
4th quarter 1969
Per capita expenditures for other goods and services 1960
4th quarter 1969
Per capita disposable income spent for other goods and 1960
services, percent. 4th quarter 1969
Food consumption per capita 1960
1969
Pounds of beef consumed per capita 1960
1969
1$26,24
2$30,27 +15.3
`$43.98
3 $46. 74 +6. 3
480.7
0974 +20.7
67103.1 ____~.
67132,5 +28.5
67101.4
67131.5 +29.6
67106.6
67150.7 +41.4
67107.4
67154.1 +46.3
8 $2. 09
8$3,15 +50.7
8$2.26
8 $3.28 +45.1
$ $3. 08
8 $5. 02 +63. 0
81.52
8 $2. 40 +57. 9
8 $80.67
8 $117.18 +45.2
a $1,937.00
`°$3, 172. 00 +63. 8
"$388.00
12 $519. 00 +33. 8
1~ 20.0
~216.4 -18. 0
"$1,412.00
17 $2, 368. 00 +67. 7
`372.9
1674,7 +2.5
615 100.5
015106.0 +5.5
(11) +5.8
(17) -5. 1
IS 85. O
"110.7 +30.2
I Livestock and Meat Statistics, Statistical Bulletin No. 230, U.S. Department of Agriculture, June 1960, pp. 112 and 127.
2 Livestock, Meat & Wool Market News, weekly summary and statistics, U.S. Department of Agriculture, vol. 38, No. 6,
p. 130; No. 7, p. 153; No.8, p. 177; No.9, p.201.
3 Ibid., vol. 38, No. 6, p. 138; No. 7, p. 161; No. 8, p. 185; No. 9, p. 209.
4 Livestock and Meat Statistics, Statistical Bulletin No. 230, U.S. Department of Agriculture, June 1961, p. 132, and U.S.
Department of Agriculture information not published.
o U.S. Department of Agriculture, information available, but not published as of Apr, 10, 1970.
6 Index.
7 Economic Indicators, Council of Economic Advisers, prepared for the Joint Economic Committee, March 1970, p. 26.
8 Ibid., March 1970, p. 15.
a Ibid., December 1969,p. 5.
10 Ibid., March 1970, p. 5.
11 Marketing and Transportation Situation, U.S. Department of Agriculture, August 1969, p. 10.
12 Ibid., February 1970, p. 2.
13 Ibid., August 1969, p. 10.
14 Ibid., February 1970, p. 2.
15 National Food Situation, U.S. Department of Agriculture, February 1970, p. 13.
15 Animal products.
17 Crop products.
18 Livestock and Meat Situation, U.S. Department of Agriculture, November 1968, p. 26.
la National Food S tuation, U.S. Department of Agriculture, February 1970, p. 15.
Mr. MAGDANZ. We appreciate the courtesy. With that unless there
are questions that someone would like to ask us, that will conclude the
oral presentation we make.
Mr. BURLESON. Mr. Schneebeli, do you have any questions?
Mr. SCHNEEBELI. No, Mr. Chairman.
Mr. BURLESON. Thank you very much. We are pleased to have you.
Our next witness is Mr. Ira H. Nunn, representing the National
Restaurant Association.
Will you identify yourself and those accompanying you, please, sir?
PAGENO="0125"
3725
STATEMENT OP IRA H. NUNN, COUNSEL, NATIONAL RESTAURANT
ASSOCIATION; ACCOMPANIED BY ROBERT B. NEVILLE, AND JOHN
S. MOORCONES
Mr. NUNN. Good afternoon, Mr. Chairman and gentlemen of the
committee.
First, I would like to thank the committee on behalf of the restaurant
industry for permitting us to testify today on this very important mat-
ter to us. We appreciate the opportunity very much.
Mr. Chairman, my name is Ira H. Nunn. I am the Washington coun-
sel for the National Restaurant Association. I am accompanied here
today by Mr. Robert B. Neville, on my right, and by Mr. John S. Moor-
cones, on my left, both of whom are attorneys in the office of the Wash-
ington counsel for the National Restaurant Association which I rep-
resent today.
This association is a trade association with approximately 13,000
members of its own and which through its affiliation with 137 State
and local restaurant associations represent about 110,000 eating and
drinking establishments in all parts of the country. The National Res-
taurant Association has members in all types of food service, institu-
tional feeding and industrial catering as well as drive-ins and restau-
rants of all types.
Our members do not import meat. Our interest in this matter is
views on legislative proposals now pending before Congress which
would place more stringent limitations on the quantity of fresh, frozen,
and chilled meats that can be imported into the United States.
Our members do not import meat. Our interest in this matter is
identical to that of the American housewife who seeks to provide
nourishing, palatable foods to her family at a cost consistent with her
budget. In other words, we are here as consumers. The restaurant in-
dustry is the second largest consumer of food in the United States.
We are second only to the American housewife in that regard. We buy
from 20 to 25 percent of all food bought in this country and we pass
it along to those who eat it, that is, to our customers. It happens that
perhaps beef as a commodity is the largest single item that we buy and
sell. We believe that, with the current market demand for beef, any
further restriction in the supply is certain to raise the price of ham-
burger and hot dogs. To the best of our knowledge, those who are
in favor of greater restrictions on imports `of meat do not contend
otherwise.
I refer specifically to beef, because beef is the central issue in this
matter. Over 90 percent of all imported meat is beef. The target of
lower quotas is beef. There is a sound reason why beef is the leading
imported meat product. It is in great demand by the consumers. The
per capita consumption of beef in the United States in 1945 was 59.4
pounds. By 1957 this had risen to 84.6 pounds, and per capita consump-
tion today is over 109 pounds.
`During this same period, the population has grown from about 130
million to over 200 million. Mr. Chairman, when we observe this
phenomenal rise in demand, it seems we might he better occupied in
assessing the adequacy of our sources of supply and expanding them,
rather than considering methods to reduce that supply. The law of
PAGENO="0126"
3726
supply and demand operated to illustrate this point dramatically less
than one year ago when ground beef rose from 55 to 66 cents per pound
in a year's time and frankfurters rose from 69.6 ceiits to 78.4 cents a
pound during the same period.
This is our principal concern in this matter. V~Te believe it is possible
to price a product out of a market. 1-however, appealing hamburgers
and hot dogs may be to the American palate, prices can and do operate
to change tastes. Economic pressures have induced the acceptance of
substitutes in other commodities and can do the same for beef. We
would prefer to avoid this and we believe it is in the best interest of
our meat industry to avoid it. To our industry, the issue assumes
even greater significance for we know that eating away from home,
the pleasure of eating out, can diminish when the cost becomes too high.
We know, too, that the principal products from manufacturing beef,
hamburgers and hot dogs, are a mainstay of the low income family's
diet. High prices for these high protein, nourishing meat products hit
our low income families the hardest.
It is our understanding that American cattle raisers want greater
limitations placed on imported beef because they believe such im-
ports compete with their product. We do not believe this to be true to
any significant degree. Let me explain why. Imported beef is the
product of lean, grass-fed cattle. Its normal fat content runs to about
10 percent. The great majority of such lean beef is of cutters or can-
ners grade and is used principally in the manufacture of hamburger,
hot dogs, and sausage where fat content is restricted by Government
regulations. Our domestic source for this type of beef has been retired
dairy herds. The number of cattle in these herds has been steadily de-
clining from a peak of about 41 million in 1945 to about 20 million
today.
I heard a witness who preceded me this morning suggest that the
supply of such cattle was becoming greater through the use of range
cows. My information is contrary to this. I would like to read from the
February 1970, Livestock and Mean Situation, on page 28-this is a
document produced by the Economic Research Services of the U.S.
Department of Agriculture-the material I want to quote is this:
"In the mid-1950's more than a third of all steers and heifers slaugh-
tered were marketed off grass."-one-third in the mid-SO's off grass-
"the balance was marketed through feed lots. By the mid-1960's, the
proportion of non-feds dropped to a fifth of the total, and in the past
5 years the accelerated growth of cattle feeding sharply reduced the
non-fed category to about one-tenth of the total."
Coincident with this decline in supply has come a spectacular in-
crease in demand. The efforts of our meat industry have been directed
toward satisfying the ever-increasing demand for the more tender, fat
marbled, table beef that is the product of our grain-fed catfie. The
great bulk of our domestically produced beef, with .a fat content of
about 25 percent, is the product of our grain-fed cattle. This isa na-
tural approach to the problem by our cattle raisers. The production of
grain-fed cattle is more consistent with the decline in available graz-
ing areas and, furthermore, grain-fed cattle bring higher prices to
our meat producers.
The lean, grass-fed imported beef is used, by and large, for manufac-
turing purposes. It does not compete in the marketplace with the high
PAGENO="0127"
3727
quality table cuts produced from our grain-fed animals. If a housewife
finds that hamburger and frankfurters have become too high, she is
not going to purchase a more expensive item such as a cut of steak or
roast. She will turn to a lower: priced food such as fish or poultry, or
perhaps a macaroni and cheese caserole. These are all good foods and
are available to her at lesser prices than beef.
To place the issue in perspective it is worth noting that meat import
law of 1964 (Public Law 88-482) is designed to limit imports to ap-
proximately 6.7 percent of domestic production. In actual operation,
since the passage of that law in 1964, beef imports have represented
5.3 percent of domestic beef production in 1964; 4.4 percent in 1965;
5.5 percent in 1966; 5.9 percent in 1967; and 6.5 percent in 1968. Over
that 5-year period, imported beef averaged but 5.5 percent of do-
mestic production.
So you see, Mr. Chairman, we are already operating under a statu-
tory quota which works. It keeps imports down. it is effective. More
than that, we are operating under a superimposed voluntaiy quota
which also serves to keep us within the quota.
According to the best information we can obtain on the subject, there
has been an annual increase of about 2½ percent in consumer demand
for hamburgers, frankfurters, and sausages. In contrast to this steadily
rising demand, the Department of Agriculture predicts a 4-percent de-
crease this year in cow slaughter, our principal domestic source of man-
ufacturing beef. This fact simply reflects a pattern that has been in
progress for many years. The predictable result of this steady. decline
in domestic supply during a period of consistently rising demand, and
with import limits based upon domestic production, is a shortage of
manufacturing grade beef. Some estimates of this shortage place it at
350 to 400 million pounds. With supplies falling short of consumer de-
mand to this extent, higher prices are not just predictable-they are an
absolute certainty.
A short while ago a subcommittee of the House Government Opera.
tions Committee held hearings on meat prices, in October 1969. The
subcommittee's report of its findings was not accepted by the full com-
mittee, I understand, and it was not published for reasons which were
not announced. From press reports of the contents of this unpublished
report, we are told that the subcommittee found that the supply of
beef, including available imports under current restrictions will be
inadequate to meet demand for at least the next 6 years, and that
sharply rising beef prices are in prospect to 1975. We are also told that
the subcommittee recommended immediate amendment of the Meat
Import Quota Act to increase the supply of imported beef. I cannot
verify the accuracy of the press accounts of `this subcommittee's
conclusions. However, I mention `them to you with the thought that
you may find it useful to do so.
All of the predictions we have heard or read agree that demand for
beef will rise at the rate of 2½ or 3~percent per year. Projections on the
supply available to meet this demand vary, but all knowledgeable
sources known to us agree that our current sources of supply, at opti-
mum, will be hard put to match demand. With a market of this char-
acter, it seems clear that any further restrictions on imports would
force the use of domestic high quality and high priced cuts for manti-
PAGENO="0128"
3728
facturing purposes. Of necessity, this will mean a markedly higher
price for hamburger and other processed meat products.
Since this committee and the Congress will be considering this issue
from the standpoint of national policy, it seems appropriate to observe
that the principal sources of our imported beef are Australia, New
Zealand, Ireland, and Mexico. These countries are allied to us polit-
ically and economically. Our balance of trade with each of them is now
heavily in our favor. Australia, for example, buys twice as much in
American goods as she sells to us. By further restricting `the oppor-
tunity of these trading partners to sell to us, we invite restrictions by
them on our products. The risk of such retaliation will not be borne
by our own meat producers. Any retaliation would fall upon producers
of other agricultural products or upon manufacturers of hard goods.
Aside from the risk of retaliation by countries whose friendship and
political alliance we need and treasure, we need also to look to the
future of our protein supply. We must assess carefully whether our
current restrictions are impairing supplies for future years when the
need will be even greater than it is now. Since Australia may not send
us all the meat she has to sell, she is seeking markets elsewhere and
Russia is becoming such a market for Australian beef.
In brief, Mr. Chairman, all the beef we produce today and all that
we are allowed to import is consumed. No part of our production is
lacking a market, even at today's prices. If importation of beef is
further restricted, the higher grade and higher priced domestic prod-
uct must be substituted in manufacturing. The family of modest in-
come which has come to rely upon hamburgers, hot dogs, and other
processed meats as `diet staples will be faced with higher prices. So
will the establishments in our industry which try' to keep meals away
from home within the means of all segments of our society. We believe
that in today's economy, marked as it is by inflation, any action de-
signed to raise food prices makes no sense at all.
That ends my prepared statement, Mr. Chairman. I would like to
make a few more remarks by way of refuting testimony which I have
heard here today.
First of all, in the Congressional Record in the month of April
there appeared two articles placed in the Congressional Record by
a Member of the House of Representatives, alleging that imported
meat is not adequately inspected and might well be unclean. This was
a very distressing thing to see. Inquiry was made of the Department
of Agriculture and a letter from the Secretary of Agriculture stating
that inspection of imported meats is as good or better than that of
domestic meats was placed in the Congressional Record on June 4.
We have heard mention made of the fact that imported meat may be
used for other than grinding and for manufacture. It is true that
some of it is. We believe it is very little. We believe it is an insignificant
part. We do not know how much it is, Mr. Chairman. No one else
knows at the moment, because the Department of Agriculture has
iust asked the Tariff Commission to make a survey of the field and
find out exactly what is done in this country with meat that comes
to us from abroad. Preliminary documents have been circulated by
the Tariff Commission and one day we will know. There are su~-
&estions that it may be as much as 40 percent; I seriously doubt it.
There are suggestions that it may be as much as 25 percent; I seriously
PAGENO="0129"
3729
doubt this. But in any case, Mr. Chairman, I have this observation
to make with respect to such meat, however it is used.
My members tell me that if, they can find a steady supply of good
domestic lean meat with a price differential between the lean and
the fed, they will be happy to use it. It just does not exist, Mr. Chair-
man. It is not available to us. If there is an adequate supply in this
country of grass-fed beef for our commercial needs, it is not available
to us and we do not know where to get it. We would like to have more
imported meat come into the country.
Reference was made by a preceding witness to the fact that com-
pared to last year our freeze lockers are pretty full right now. Well,
this is true, Mr. Chairman. You will remember last year we had about
a 3-month maritime and dock strike, and at the time to which the
previous witness refers our lockers were almost empty. So, we have
a great deal more in them now than we had at this time last year.
Another thing about this quota that should be borne in mind is
that the quota causes our people who import meat and sell it and use
it here to get their meat as early as they can in the season, because
we realize that this supply is in jeopardy and the man who has con-
tractual commitments to meet tries to get his supply early in the
game. So undoubtedly now people who want meat and use it and have
commitments that they must meet have gotten as much meat as they
could get in.
About that shipping strike of last year within a 10-day period
after that shipping strike, maritime and dock strike, took effect, the
price of hamburger from certain suppliers rose 10 percent. This shows
how sensitive this market is. During the first 10 days of the strike,
of course, there was no shortage of meat, but during that 10 days
nevertheless prices of hamburgers from some suppliers, principally
those who get meat through gulf ports in this country, rose 10 percent.
I suggest therefore it is not altogether objective to compare the
condition of our freeze lockers now with the way they were this
time last year. The quota system causes, not the hording of meat,
but causes our people to buy it as, early as they can in the game.
That concludes my remarks, Mr. Chairman.
Mr. BURLESON. Thank you, Mr. Nunn. Do your associates have
anything to add?
Mr. NUNN. No, sir; that is our entire presentation.
Mr. Bunr.~EsoN. Mr. Scheneebeli?
Mr. SOHNEEBELI. Mr. Nunn, at the present time our law limits
imports to approximately 6.7 percent of domestic production. In the
light of what you say, is this adequate for the next 2 or 3 years?
Is it adequate to take care of your needs?
Mr. NUNN. It is not, Mr. Schneebeli.
Mr. SGHNEEBELI. Do you have any figure in mind that might be
adequate? Have you thought of any percentage figure that might do
the iob?
Mr. NUNN. The formulation of a new formula is a thing which we
have considered quite a bit. I do not know how to do it, myself, at
this moment, Mr. Scheneebeli.
Mr. SCHNEEBELI. But you would be opposed to shifting the base
period back?
Mr. NUNN. Yes; we would be opposed to any device which would
PAGENO="0130"
3730
limit the imports at all. We are experiencing a 21/2-percent increase
each year with a rising population and an increased appetite for this
wholesome, palatable product. The thing that this industry would
like to see done is to repeal the quot.a. altogether.
Mr. SCHNEE1IELI. Repeal it or increase it?
Mr. NUNN. Preferably repeal it. If we can't do that, give us more
beef which may come in under that quota.
Mr. SCHNEEBELI. Do you think 10 percent is too high?
Mr. NUNN. Pardon?
Mr. SCHNEEBELI. Do you think 10 percent is too high? What figure
do you have in mind, if not 6.7?
Mr. NUNN. I think an increase to 10 percent of the same base period
would probably be all right. We also face this situation. If there were
no quota at all and there had been none and we were free to import all
the beef from abroad that we could get and they could sell to us freely,
we could only import now about 10 percent more.
Mr. SOHNEEBELI. What would be the limitation? Price?
Mr. NUNN. No; it doesn't exist.
Mr. SOHNEEBELI. The supply?
Mr. NUNN. That is right. We are facing a worldwide shortage in
beef within the next 6 years, worldwide.
Mr. SOHNEEBELI. Thank you, Mr. Chairman.
Mr. BURLESON. Thank you, gentlemen, for being with us.
(The following statements were received for the record:)
STATE OF SOu'rH DAKOTA,
OFFICE OF THE GOVERNOR,
Pierre, June 1, 1970.
Hon. WILBuR D. MILLS,
state Representative of Arkansas,
House Office Building, Washingtoii, D.C.
DEAR CONGRESSMAN Mn~T~s: You and your constituents deserve the highest
quality meat products available. The public spirited farmers and ranchers of
South Dakota and all beef producing states have dedicated their talents to sup-
plying such products. The cattlemen of South Dakota supported the Wholesome
Meat Act of 1967 which was passed by the Congress. In 1968, the cattlemen of
South Dakota supported the South Dakota Meat Inspection Act, which was passed
by the South Dakota Legislature and I signed it into law. Thus, you can see our
interest in supporting and maintaining the highest standards for the protection
of the American Consumer.
Unfortunately, this system that has served the American Consumer so ad-
mirably, is now in jeopardy. A few special interest groups are now engaging in
an effort that will permit an increase in the imports of beef into our country. If
successful, this clandestine effort can only result in eventual chaos to our effi-
cient and effective supply system of today.
The American Consumer is being buffeted by several arguments that are subtly
utilized to disparage the present system and to advance the cause for more im-
ported beef. I shall discuss them briefly.
A. "The price of beef is too high". This argument is fallacious. A comparison
of prices in 1960 to those in February 1970. shows that the average price per
pound of choice beef at retail went from 80.7 cents to 97.4 cents (in the highest
worth of 1969. the price was only $1.02'/2), an increase of 20.7% while hourly
earnings of labor in the manufacturing industry went up 63.0% and the per
capita expenditures for other goods and services went up 67.7%. In the face of
rising costs of production. including labor, taxes, equipment, supplies, services.
etc., and increased costs of slaughtering, processing, fabricating, distribution, and
sales, it is inconceivable that anyone could expect the domestic industry to fur-
nish quality beef to consumers at lower figures per pound. I wonder how anyone
can defend a premise that "beef prices are too high".
PAGENO="0131"
3731
B. "There will be a shortage of beef by 1975". This argument is fallacious. The
record will show that the domestic industry has demonstrated it will supply con-
sumers with the quantity of beef they want and need. Expansion in beef produc-
tion arises from several sources. It results from increasing the number of fed
cattle through a reduction in the slaughter of calves and from the reduction in
slaughter of non-fed steers and heifers, and finally, from an increase in the
production of more cattle (meaning more cows to produce calves).
Through close scrutiny it is evident that an additional 1.27 billion pounds will
result from these sources within the space of 1 or 2 years. Close analysis of the
beef situation assures us that the additional beef which may be required by 1975
is completely within the realm of possibility.
Here are a couple of situations that apparently exist and have existed for
sometime. They need our attention because they are inconsistent with the 1964
Meat Import Law.
A. The Japanese Government has just opened two huge packing plants down
under that are strictly packaging and canning plants. Australian beef is being
bought, packaged in cans, and shipped to the United States. Also similar prepared
products are entering the United States through Canada. As you know, there is
no embargo or controls on the amount of canned meat that can be shipped into
the United States.
B. Some of the imported meat has been processed in plants not conforming to
our federal specifications for our domestic supply.
The American cattleman is personally committed to the supplying of whole-
some and nutritious beef to the American Consumer-you and me. It seems to me
it is imperative to assure them every consideration in their efforts to continue
this service to American Consumers.
Therefore, I am asking you to support the following principles set forth in
pending legislation.
A. To establish `a 100 per cent quota trigger point rather than the present 110
per cent.
B. To require that all imported meats-whether fresh, frozen or canned-meet
the same specifications regarding cleanliness, purity, and health of animals at
slaughter that exist in the federally inspected plants in the United States.
C. To include canned, cured and cooked meats in the import quota.
D. To charge against the country of origin, any canned, cured and cooked
meats that enter the United States through a country other than country of
origin.
If you have any questions, I would welcome an opportunity to provide addi-
tional information that would remove the cloak of misunderstanding with which
our elected representatives, public officials, and American Consumers, are being
veiled.
Your interest and cooperation in supporting a proven production and market-
ing system for beef, will be greatly appreciated.
Sincerely yours,
- FRANK L. FARRAR, Governor.
CONGRESS OF THE UNITED STATES,
HOUSE OF REPRESENTATIVES,
Washington, D.C., June 23,1070.
Hon. WILBUR D. MILLS,
Chairman, Committee on Ways and Means,
U.s. House of Representatives, Washington, D.C.
DEAR CHAIRMAN MILLS: I am today introducing legislation identical to H.R.
17540 (revising the quota-control system on the importation of certain meat and
meat products), which is now before your Committee.
There is great concern in my congressional district that a more equitable sys-
tem of import controls for beef and other meat products should be provided to
better protect our own farmers. I trust you will express my interest in this legisla-
tion to your distinguished Committee.
I respectfully request this important legislation will be given careful
consideration.
With best regards, I remain
Sincerely yours,
WILLIAM L. HUNGATE, M.C., Missouri.
PAGENO="0132"
3732
STATEMENT OP MARTIN B. RIND, PRESIDENT, MILWAUKEE SAUSAGE COMPANY,
SEATTLE, WASHINGTON
SUMMARY
Meat processors need adequate supplies of lean beef. In recent years, supplies
have become increasingly scarce, and production has suffered. High prices for
lean beef and beef products result directly from import restrictions. Therefore,
Congress should remove the restrictions on imported beef currently imposed by
Public Law 88-482.
I am president and part owner of a meat products manufacturing company
which has been in business in Seattle since 1916. My own participation dates since
1933. Our company employs approximately 60 people, manufacturing and dis-
tributing over 2.5 million dollars of products per year.
The basic raw material used in our industry, lean beef, is produced in the
United States primarily from aged cows and bulls no longer suitable for milking
or breeding. Most industries are able to increase their available raw materials
through increased efforts at drilling, digging, or planting in the ground. Our
domestic source of raw material, however, is essentially a by-product of the
dairy and cattle feeding business, and cannot be extracted from the ground, sea,
or atmosphere.
In earlier days, that is until 10 or 15 years ago, all needed lean beef raw mate-
rials were supplied to us by local meat packers who purchased cows and bulls
from surrounding dairy farms.
Today, the dairy herds are long gone, and the pastures where they grazed are
paved with cement. The few meat packers remaining in business slaughter pri-
marily grain fattened cattle shipped from Eastern Washington. The Yakima
`~Talley and Columbia Basin areas of Eastern Washington once supplied those
packers with substantial quantities of lean grass fed beef, but high land prices
have long since made such operations uneconomic.
This local situation has been repeated nation-wide. In 1955, our country's popu-
lation of dairy animals had held at about 35 million for around ten years. By
1964, when imports were restricted by law, the figure had shrunk to about 27
million, and by 1969 was down to less than 22 million. Imports currently provide
about one billion pounds of lean beef for manufacturing per year, but thetotal
supply available to us is substantially less than 15 years ago.
As the total amount of lean beef available from domestic sources has dimin-
ished, and as the demand for this type of beef has increased, ceilings imposed
by Public Law 88-482 have created an inflexible supply situation. Those of us
in the business of manufacturing processed meat products and hamburger have
bid up prices of lean beef to an historic high level where meat from old cows
commands a higher price than meat from choice steers.*
As we have raised our selling prices to consumers to compensate for higher
costs, our tonnage volume has fallen-a normal adjustment in a free market
whereby demand reduces to compensate for reduced supply. Reduced volume is
poison to any manufacturing industry, of course, *but our own company has
weathered the storm so far. The reason, reduced cost of fat materials, may be
of interest to those in the livestock industry who in my opinion have conducted
such a blind vendetta against meat imports. The following quotation from my
remarks at the convention of the Western States Meat Packers Association in
February seems `appropriate:
"Restrictions on imports are reducing our capacity to manufacture sausage and
hamburger. Cattle feeders are paying part of the price of those restrictions be-
cause reduced sausage production means reduced demand for fat trimmings.
Reduced demand means lower prices, and lower prices for fat trimmings means
lower prices for fat cattle."
Within the past two months, the price of 50% lean `beef trimmings has fallen
sixteen percent. The price of sO% lean pork thimmings has fallen nineteen per-
cent. Opponents of meat imports will point out that this market drop has occurred
during a period when a "Flood" of foreign beef has arrived-the highest rate in
history. This of course is true, but it is also true that the price of lean manufac-
turing beef, the product against which the `alleged "Flood" will compete, is also
at the highest level in history. Imported lean meat has arrived in response to
the demand which has caused the price level to be bid up. The decline in fat
*On Mac' 15, 197G, the National Provisioner Daily Market Service quoted full carcass
cow meat (il) 67~ lb. Cholee Steers were 47~ lb. The yield of the boneless steer would be
about 85%. 47~ ÷ 85 % = 55c~ lb. cost of the boneless steer meat.
PAGENO="0133"
3733
meat prices is caused by the scarcity of lean meat which is needed `to utilize the
fat meat.
It is my hope that Congress will remove the restrictions on meat imports.. While
reduced prices for fat trimmings have tended to off-set our losses from falling
volume thus far, our industry will eventually suffer if volume declines further.
Small operators such as ourselves will be the first to fail. `It seems to me a tragedy
that Public Law 88-482, which has raised costs to manufacturers, raised prices
to consumers, and may even cause the failure of legitimate businesses, benefits
no one-least of all its proponents.
STATEMENT OF GEORGE R. VAIL, PRESIDENT, MORTON FROZEN FooDs DIvIsIoN,
ITT CONTINENTAL BAKING COMPANY, INC.
ITT Continental Baking Company, Inc. and its Morton Frozen Foods Division
respectfully submit thait the liberalization of the present re~trietions `on the im-
porba'tlon of frozen beef would be in' the best intereSts of the consuming public.
We also submit that reatrictions `on the importation of cooked beef, primarily
from South America, would he contrary `to the public intereSt.
Expert testimony `demonstrating `the need to increase imports of `beef will be
offered `to the House Committee on Ways `and Means. I shall not duplicate this
testimony, but rather will limit myself to pointing out how import restrictions
affect my own company and the consumers it serves.
First and most important `to us is the fact `that the USDA has a uniform inspec-
`tion system for all foreign `plan'ts prOducing meats which `are imported to this
country, and `of course the MID inspects `the meat again at the Port `of En(try.
Imported meait `ha's `the same inspection sbanda'rds a:s `domestic meat at its plant of
production and again in `the U.S. We believe `this to be of critical importance,
and in recommending liberalization `of meat imports we recommend `th'a't Congress
commit whatever funds may be necessary `so `that `all imported meat in the future
will be subject `to the highest standards.
At `the present `time, there is `an insufficient quantity `of range fed manufactur-
ing grade beef in `the United States to meet consumer demands and nutritional
requirements. Supplies fell from 27 `pounds per person in 1955 to 14 in 1963, and
the per capital figure is much lower `today. Traditionally, imported frozen beef
ha's `taken up `the `slack. However, present import quotas are `so low that a halt
in import's will be man'dat'ory later this yea'r unless `relief is forthcoming. Phi's
would `trigger a `tremendous `rise in' `the prices `of frozen goods, frankfurters, sau-
sage, canned meat, `soup and other `products which rely on `the low cost manufac-
turing beef.
`The Morton Division of ITT Continental Baking Company uses million's of
pounds of raw frozen meats for the manufacture `of economical frozen dinners,
casseroles and boil-in-bag products. These products provide excellent protein nu-
trition, `an'd `their `low cost makes `them `readily ;availtble to even ~oor families.
If Morton were forced to use `domestic beef, `their m'anufacture and sale would
be greatly curtailed, if not prohibited, because `of `the cost factor `and the `added
poundage necessary `to make up for the `higher moisture c'o'nitenlt of domestic `beef.
Consumer cost `would necessarily `skyrocket.
In additi'on (to the a'bove `products, Morton also u'ses million's `of pounds of
frozen Sou'th American cooked beef in `the manufacture `of `beef dinners and pelt
pies. If domestic beef were `substituted, consumer prices would `double, not only
because of `the vastly increased cost `o'f beef per pound, `but again because of
the millions `of ad'di'ti'on'al pounds needed `to correct (the moisture content. Further,
availability `of these consumer favorites (a't any price) would be sharply cur-
tailed.
Last year, Morton estimated that its cost would be about $5 `million annually
t'o substitute domestic `beef `for imported bee'f. The amount is a't least that (today,
and is probably much grealter due `to `the higher `price `of domestic hamburger.
Even `thi's figure is illusory, since many products would be priced `out of `the
market.
These figures `are only for one company. What `the to'bal would `be for all im-
ported meat u'sers, `I am not prepared `to say. Also, I realize `th'a(t curren't pro-
posals `do not `seek `t'o `shut `off all imports. Nevertheless, increased costs are in-
evitable if an artificial shortage i's crca't'ed, `and `these costs would have to be
passed on (to consumers-in m'any cases to `those consumers who can least afford
them. The vast majority of food products using imported beef are in `the lower
price range.
PAGENO="0134"
3734
At a time when the fig4ht against `hunger `and malnutrition `is assuming great
`importance, it seems unwise, `to say the `ie'a'~t, to fail to take any action which
would `help insure a supply of inexpensive, wholesome, nourishing food. At a
time when the country is struggling `to keep price's down. it is untenable to `allow
an `artificial situation to `develop which will send prices &~ari'ng. At a time when
unemployment is rising, it is hardly wise `to shut `down plant operation's which
rely on `a supply of manufacturing beef unobtainable in the United States.
Creating a `~horhage of manufacturing beef by failing to permit `sufficient im-
port's is clearly inflationary, and would coSt consumers, `particularly those in the
iow~r iileom~ brackets, m'iilions of dollars. Benefits to domestic producers would
`be negligible, `since the type of beef now imported is in critically `short supply.
And any `reduction in imports would be a blow to the economies of the exporting
countries, many of which need all `the `help `they can get.
For `these reasons, and the many others which `have `been offered `by food ex-
J)erts appearing before the House Ways and Mean's Committee, the Morton Di-
vision believes that the situation call's for positive actions. It respectfully `sub-
m'i'ts `that a liberalization of beef import quotas `is critically necessary in the
be~t `intereSts `of `the food processing industry and its employees, and, above all,
`the consuming public.
Mr. BURLESON. May I mention that we have a quorum call and I re-
gret Mr. Schneebeli and I will have to go over and answer it. We will
recess. I hope that we can be back in 15 minutes. We are sorry that we
have to delay all of you, but this is the way things go around here. We
have to stay on the payroll.
(Recess.)
Mr. BURLESON. We will resume our hearings.
Is Mr. Richard J. Goodman present? Will you come around, Mr.
Goodman?
Again I regret, sir, that. we do not have more members. I don't
imagine it is too inspiring to look at one sitting up here. But I think
we will have some more. Since we do have a number of other witnesses
to follow, if you will proceed. Do you wish to read your statement or
summarize it or place it in the record?
STATEMENT OP RICHARD J'. GOODMAN, MEMBER, INTERNATIONAL
TRADE COMMITTEE, NATIONAL `GRAIN & PEED ASSOCIATION
Mr. GOODMAN. Yes, Mr. Chairman. I understand the situation. I
have here a final copy of my statements for the record. I will try to
brief it down to as short a period of time as I can, with your
permission.
Mr. Chairman and members of the committee, I am Richard J.
Goodman, vice president of Cook Industries, Inc., of Memphis, Tenn.
I am appearing on behalf of the National Grain & Feed Association.
I am a. member of its International Trade Committee. The association
represents more than 1,300 grain and feed firms ranging in size from
the smallest country elevators to the largest. grain and feed complex
and includes exporters and processors of grains an'd feeds a.s well. The
association also has 52 affiliated State and regional associations repre-
senting more than 15,000 local grain and feed firms, plus 100 associate
members. Our regular members and those of the affiliated associations
engage in one or more of the following operations: collection, condi-
tioning, blending, storing and distribution of raw commodities at
country and terminal elevators; exporting grain and grain products;
and milling or processing of grain for feed or food.
We much appreciate t.his opportunity to express our views on trade
PAGENO="0135"
3735
legislation pending before this :committhe, and with greater concern,
to focus on agricultural trade policy, particularly the problems, trends,
dangers and opportunities associated with our exports to Western
Europe.
I should say parenthetically, Mr. Chairman, that my testimony
comes under the heading of "Meat" in the list of witnesses here. I am
not here a.t all to talk about meat, but rather on grain exports includ-
ing soybeans to some extent.
We fully support the proposed Trade Act of 1969. At the same time
we are opposed to any legislation that adds new restraints on foreign
trade, whether it be quotas on imports into the United States or taxes,
embargoes or flag shipping requirements on exports from the United
States. We believe that the liberalized "escape clause" provision con-
tained in the proposed Trade Act of 1969 represents procedures far
more desirable and superior in dealing with problems arising out of
increased imports for all segments of our economy, than would quan-
titative import restrictions required by legislation.
Also, we wish to express our support for the proposed legislation
authorizing the use of Domestic International Sales Corp. (DISC).
We believe the DISC proposal would, if authorized, help stimulate
U.S. agricultural exports by improving the competitive position of
U.S. firms engaged in the `farm export business.
On agricultural trade, we would reiterate what several previous wit;
nesses, including Secretary of Agriculture Hardin, have said to the
committee. Agriculture is currently our single most important trade
policy problem area. Threats to foreign sales of farm products are
likely to persist, if not worsen, iii the years just ahead. Agricultural
trade issues need and deserve the highest priority in consideration of
our Government's international eConomic policy now and through the
early 1970's.
A brief review of U.S. farm exports in recent years serves to remind
us of both the importance of foreign trade to American agriculture,
and the difficulties being faced in major farm export markets, particu-
larly the European Economic Community and the United Kingdom.
U.S. agricultural exports reached their historic peak in calendar
year 1966 at nearly $6.9 billion. This represented 23 percent of total
U.S. exports. While total exports were only 5.8 percent of gross na-
tional product, agricultural exports were 15.9 percent of total U.S.
farm marketing. Unfortunately, since 1966 farm exports have declined
each year to a level only slightly more than $5.9 billion in 1969 and
only 16 percent of total exports. Thus, nearly $1 billion of farm exports
have been lost in the last 3 years. At the same time, nonfarm exports
increased from $23 billion to $31.7 billion. I make this point to demon-
strate that major problems in maintaining and expanding farm ex-
ports lie ahead. They clearly require a higher priority of attention and
action than other segments of the economy.
The cost of declining farm exports is more than simply the loss
in value of trade and adverse effects to our balance of payments. There
is also a substantial public cost directly connected to the operation of
our Federal farm programs. For example, during crop year 1967, after
agricultural exports had dramatically increased to record levels, crop-
land diverted under Government programs was 41 million acres. As
exports declined and farm productivity continued to climb, our Gov-
PAGENO="0136"
3736
ernment was forced to increase acreage diversions to avoid a'bui1dup
of costly surpluses. Diversions increased to 48 million acres in 1968, and
to 58 million acres in 1969. As you know, cropland acreage diversions
are paid for from the Federal agricultural budget under commodity
stabilization programs.
When we consider the effects of declining or even stagnant farm
exports on the U.S. agricultural economy and the cost of farm pro-
grams, we must also recognize that productivity in American agricul-
ture is continuing to increase rapidly. Corn yie1ds have increased regu-
larly all during the 1960's and promise to continue to do so during the
1970's. National average yields per harvested acres of corn increased
from 54.7 bushels in 1960 to 81.2 bushels in 1969. Grain sorghum yields
increased from 40 bushels to 55 bushels in the same period of years.
Compared to feed grains, yields of wheat have increased more slowly
but still significantly, from an average of 25 bushels per acre during
the early 1960's to nearly 31 bushels in 1969.
Both corn and grain sorghum growers have been exploiting the
benefits of hybridization with respect to yields. Wheat is just on the
threshold of this process, and when the breakthrough comes-I believe
within the next few years-we can expect to see wheat yields increase
in proportion similar to corn and grain sorghum during the 1960's.
All of this is simply to say that with our capacity to produce with
continually increasing productivity and production efficiency, Ameri-
can agriculture must export, and substantially expand exports, in the
years ahead in order to sustain healthy economic growth and minimize
the sectorial and human costs of adjustment.
Western Europe has confronted us with our most difficult problem
and disappointing experience in expanding agricultural trade, and
presents us with our greatest immediate challenge in the trade policy
field.
The effects of the European Economic Community's common agri-
cultural policy with its high internal harmonized prices and absolute
levels of protection through its variable levy system, began to take
its toll on U.S. farm exports beginning in 1967. With the incentives
of high guaranteed prices behind the variable levy wall, EEC farm-
ers increased grain production from 38.0 million tons in 1966 to 69.7
million tons in 1969. The results on grain imports from other coun-
tries, particularly the United States have been traumatic. Total EEC
imports of grains fell from 20.5 million tons during 1965-66 to 14.7
million tons during 1969-70-nearly all feed grains. While EEC im-
ports of wheat declined slightly, their exports of wheat to countries
outside of the Community increased from 4.5 million tons during
1966-67 to over 6.6 million tons during 1969-70. Because of EEC
policies, the U.S. has lost over 5 million tons of feed grain exports to
the EEC since 1966 and at the same time, along with other wheat
exporting countries, has lost over 2 million tons of wheat exports in
other parts of the world to EEC wheat dumping.
After the EEC, the United Kingdom is our second largest agri-
cultural market in Western Europe, and is an important market
for U.S. feed grains and soybeans. As I am sure you know, the
United Kingdom, along with Ireland, Denmark, and Norway, has
applied for membership in the EEC. Negotiations between the United
Kingdom and EEC on entrance will begin next month. If in the
PAGENO="0137"
3737
process these countries slip behind the EEC high agricultural price-
variable levy wall, an unmitigated farm export disaster for U.S. agri-
culture would be in the making. Our exports would quickly shrink in
the wake of the higher price incentives for greater agricultural self-
sufficiency that the EEC's common agricultural policy would bring.
In addition, trading preferences among EEC member countries would
mean that French, German, and Dutch wheat and barley surpluses
would immediately take up much, if not all, of the grain import needs
of these new member countries, and relieve the pressure these surpluses
have borne on EEC agricultural financing; thus further prolonging
the life of the common agricultural policy, all at the. expense of U.S.
grain exports.
I am sure you will recall the recent strong efforts necessary by the
*United States to stop the EEC from extending their protective sys-
tem to soybeans by way of an internal consumption tax on vegetable
oils and protein meals. If the United Kingdom, Ireland, Denmark, and
Norway join the EEC with its present common agricultural policy,
we would have to expect our soybean exports again to be put in
jeopardy by stronger and broader efforts of the larger community to
extend protection to oilseeds and products.
The EEC's common agricultural policy ha's proven to be a trade
disaster for the United States. A larger EEC, including the United
Kingdom and others, presents the danger of extending this trade
disaster to more markets and more commodities. While it would
seem that the United Kingdom joining the EEC is totally dangerous
to U.S. farm trade interests, if the United Kingdom insists on joining,
and EEC desires to increase its membership, the negotiations required
to consummate this marriage could" present an opportunity to bring
about useful changes in the EEC's common agricultural policy, with a
more liberal agricultural trade policy emerging for the new, larger
community.
What clearly is called for in order to make an agricultural trade
policy opportunity out of what otherwise promises to be a farm export
disaster is an unmistakable expression by our government of our trade
and economic interests involved in the accession of the United King-
dom and others to the EEC. First of all, we should call for the re-
adherence to GATT rules by the EEC, not only with respect to enlarge-
ment of the community, but also with respect to the EEC's preferential
trading arrangements with several Mediterranean countries, including
Tunisia, Morocco, Israel, Algeria, Spain, Greece, and Turkey, and the
many associated African states and overseas territories.
At the same time, we should reestablish the tariff bindings we have
available to us on grains with both the United Kingdom and EEC
when these bindings come back into force on July 1, 1971. Then when
the EEC and United Kingdom take up the question of the common
agricultural policy we should stand ready with suggestions on agricul-
tural trade policy in the interests of all parties concerned, most par-
ticularly consumers in Europe and taxpayers on both sides of the
Atlantic. All of this should be exercised within the context of United
Kingdom-EEC negotiations. We shOuld not be entrapped in the
hollow prospect that our trade and economic interests will be satisfac-
torily dealt with after the United Kingdom and others have joined
the Community at the EEC's present common agricuPurai policy.
46-127 0-70-pt. 13-9
PAGENO="0138"
3738
Generally, we must take the position that any prospective political
integration arising from an enlarged European community does not
outweigh our agricultural trade and general international economic
interest,s.
I should say, perhaps parenthetically at this point, that we must
also strive for an increasing export market-oriented domestic farm
program. I know that Secretary Hardin and Chairman Poage of
the House Agriculture Committee have been working hard to get such
legislation. When we consider the great dependence American agricul-
ture has on expanding export markets we can see why farm legisla-
tion that maximizes export opportunities and exploits general mar-
keting potentials is so important to achieve this year.
We should say something as well about our agricultural trade with
Japan, our largest single farm export market in the world.
In contract to the EEC and the United Kingdom our agricultural
exports to Japan have grown rapidly and promise to continue to grow
through t.he 1970's as long as we maintain a competitive and aggressive
export sales policy. There are opportunities to further improve exports
of grains and soybeans to Japan by the reduction of some remaining
import barriers and the gaining of greater merchandizing rights
within the Japanese economy. A solid basis for optimism exists that
substantial progress can be made along these lines with the Japanese;
again, as long as we maintain a strong liberal trade policy with them.
In this atmosphere there is every reason to believe that our over all
trade with Japan will grow even more mutually beneficial in the
years ahead.
Finally, some closing remarks about the international grains ar-
rangement of 1968. Negotiated in 1967 toward the end of the Kennedy
round, the IGA was a last ditch effort to produce something out of
nearly 4 years of near fruitless talks on agricultural trade. Appar-
ently, our top negotiators at the Kennedy round thought it necessary
to package up some kind of wheat agreement for the appearance of
bringing something home for American agriculture, even if it was
known to be worthless. Unfortunately, the IGA proved to be worse
than worthless. It set minimum world trading prices at levels sub-
stantially higher than the previous International Wheat Agreements,
completely out of any realistic relationship with trading values of
wheat in a world of increasing 1)roductivity. The immediate result for
the TJnited States was the loss of competitive position in world wheat
markets and sharply reduced export sales from mid-1968 until the
snring of 1969, when the pricing l)rovisions finally had to be abandoned
altogether. Contrary to some mistaken editorial comment, world
wheat prices have been exceedingly stable since IGA pricin~ was com-
pletely abandoned in the suring of 1969. To be sure, world wheat prices
have been lower but markets have responded, export sales have in-
creased, and wheat acreage in the industrialized world has begun to
recede back to more economic and balanced levels.
In short, the ifiA was an uneconomic and harmful experience for
both ourselves and Canada, only an illusion to Australia and a mis-
direction to the EEC. Nevertheless, the International Wheat Counc~hs
beginning to talk about renewing or extending the IGA beyond its
present expiration date of June 30, 1971. We should heed the hard ex-
perience we had with IGA and let them know that we are not interested
PAGENO="0139"
3739
in any further attempts to administer world wheat prices through
formalized international arrangements.
Thank you, Mr. Chairman.
Mr. BURLESON. Thank you, Mr. Goodman.
Mr. Schneebeli?
Mr. SOHNEEBELI. You think our experience in the Kennedy round
was an economic disaster. You seem to `be in agreement with many
of the people who preceded you on the same subject, be they in the
manufacturing or agricultural area, that they were not assisted very
much at the GATT.
Mr. GOODMAN. I think that in the case of agriculture there was
virtually nothing gained of value to the United States, not at least in
the major commodities. In certain cases there were definite negative
outcomes.
Mr. SCHNEEBELI. Thank you very much.
Mr. BURLESON. The thrust of your general statement over all, Mr.
Goodman, is that if we wish to export we have to import; is that
correct?
Mr. GOODMAN. Yes. It is obvious that we must have a balanced
trade situation with most of our major trading partners in the world.
Mr. BURLESON. Do you think that we are doing all that we can do
to encourage agricultural exports ?
Mr. GOODMAN. Agricultural exports?
Mr. BURLESON. Yes.
Mr. GOODMAN. No, I think not. I think we should be doing a great
deal more than we are doing.
Mr. BURLESON. Have we failed to be, using your word, aggressive?
Have we failed over the years in being a salesman for our products?
Mr. GOODMAN. No, I think our record except for perhaps a bad situa-
tion on wheat under the international grains arrangement, that we
have done a rather good job of being aggressive in the sale of agricul-
tural commodities, at least in the grains field that I am addressing my-
self to.
I think where we have fallen short in large measure in maximizing
our agricultural export potential1 is in the policy field in dealing
with the protective devices that have been used to keep our exports
out of certain markets. I make reference to the EEC, the United King-
dom. We have some problems in that regard with Japan. I am more
optimistic about working those out than in Europe, although I think
we sought to get at this business in Europe in a strong and decisive
way. We have not done that, in my opinion, at all in the last 10 years.
The fact is that I think our policy on trade generally has let that drift
into its present highly unsatisfactory state.
Mr. BURLESON. You make mention of the present farm bill that is
now in the Agriculture Committee, and doubtless you are familiar with
the so-called coalition bill. Do you think that bill is conducive to greater
opportunities for exports of agricultural products?
Mr. GOODMAN. There is less difference between the administration
or the so-called concensus proposals and the coalition bill directly in-
volved in exports. I think the major, differences in those two pieces of
legislation are with respect to commodity program operations domesti-
cally and the costs associated with running those programs.
There is some difference, however, in the effect on our exports. I
PAGENO="0140"
3740
am simply saying I think they are less pronounced than the other dif-
ferences. Here in that regard I would simply say that I believe that
what the Secretary and the chairman of the House Agricultural Com-
mittee definitely have had in mind in pursuing the bill that they have
pursued together is that it provides a maximum amount of flexibility
and competitiveness towards export markets than they felt they could
get in legislation at this time. It is better in that regard than the coali-
tion bill, in my opinion.
Mr. BU1~LESON. You would agree that we need to have a farm bill
since the present act expires at the end of this year, and that we are
not getting a new bill very fast? You will agree with that?
Mr. GOODMAN. Yes. I understand that there is a little difficulty there.
Mr. BURLESON. A few differences of opinion?
Mr. GOODMAN. That is what I understand.
Mr. B1IRLESON. Thank you very much, Mr. Goodman. We appreciate
your statement.
Mr. GOODMAN. Thank you.
Mr. B1IRI~EsON. We continue with some related subjects we have
had here before. Mr. William S. Mahoney, chairman of the Anti-Fric-
tion Bearing Manufacturers Association.
STATEMENT OF WILLIAM E. DECAULP, CHAIRMAN, FOREIGN
TRADE COMMITTEE, ANTI-FRICTION BEARING MANUFACTURERS
ASSOCIATION
Mr. DECAULP. Mr. Chairman, Mr. Mahoney was called out of the
country on business. I am chairman of the Foreign Trade Committee
of the association and secretary and general counsel of the Fafnir
Bearing Co., a member of the association. With your permission, I will
substitute for Mr. Mahoney.
Mr. BuRr~sON. Very good, sir. Would you like to present your state-
ment in total or summarize?
Mr. DECAULP. We have filed with the committee our total statement.
I would like to summarize and shorten it just a bit.
Mr. BITRLESON. Very well. You may summarize if you wish.
Mr. DECAIJLP. Mr. Chairman, the Anti-Friction Bearing Manu-
facturers Association (AFBMA) is a national association comprised
of domestic producers who account for more than 80 percent of the
Nation's output of antifriction bearings and parts. A list of the asso-
ciation's membership is attached as appendix A. This industry cur-
rently produces approximately $1.3 billion worth of bearings with a
work force of more than 60~000 in some 20 States.
POSITION OF THE ASSOCIATION
Our association has requested this time to appear in the very real
hope that the Ways and Means Committee will recognize the essen-
tiality of the antifriction bearing industry and the immediate need for
some type of import adjustment. In past appearances we have pointed
to serious import penetrations in specified size and precision categories.
An investigation with respect to miniature and instrument precision
ball bearings has been pending for the last 16 months before the Office
of Emergency Preparedness. This investigation has been described in
more detail by Congressman Cleveland.
PAGENO="0141"
3741
While imports from Europe are serious, Japan is the country threat-
ening the future life of the U.S. antifriction bearing industry.
Expansion of Japanese bearings productive capacity has resulted
in an increase in exports to the United States (65 percent of imported
dollar volume in 1969) and an attendant rise in the overall ratio of
imports to apparent consumption and production. Price still is the
major cause for imports of bearings. While the difference in wage rates
is a substantial factor in pricing, our industry believes that the ration-
alization of the industry, a practice illegal under U.S. law but sanc-
tioned by the Japanese Government, has produced an economy in
production costs that supports predatory pricing practices. Also we
are aware of the support given to the bearing exporters by way of
subsidies, mostly indirect, from the Japanese Government.
We have pursued administrative remedies, such as an application
to OEP under national security~ amendment, supplying information
in anti-dumping investigations, requesting better statistical iriforma-
tion from Department of Commerce and Bureau of Customs. However,
only in securing more complete import statistics have we had any
success.
While we have been seeking an administrative solution we have not
ignored our internal efficiencies; that is, we have to the best of our re-
sources developed the latest in machinery and equipment, maintained
sophisticated engineering staffs both for improving manufacturing
techniques as well as design of bearings, and pursued research into
usage of new materials. All this aimed at raising efficiency, reducing
costs, and maintaining and increasing sales of domestically produced
bearings
At our request, Congressman Meskill introduced H.R. 11910, Anti-
Friction Bearing Orderly Trade Act of 1969. This bill which is now
before the Ways and Means Committee is designed to permit foreign
manufacturers, such as the Japanese, a fair share of the U.S. market
while also providing for the continued existence of the domestic indus-
try in its historic form. Thus, H.R. 11910 is consistent with the import
adjustment intended for the textile and leather footwear industries
by~ the Mills bill (H.R. 16920).
We are not questioning the impOrtance to the Nation of the textile
and leather footwear industries and the serious import problems they
~re experiencing. However, we submit that this committee should not
overlook the antifriction bearing industry which is absolutely vital
to the nationl security and economic health of this Nation in its
considerations of statutory protection for basic American industries.
Our efforts to obtain import adjustments have made clear to us two
facts: First, our ability to compete against imported bearings is
severely curtailed by the assistance, given to the foreign competitor by
two strong allies-the Japanese Government and the U.S. Govern-
ment; second, unless the Congress provides statutory protection, the
domestic industry must seriously consider whether to export American
jobs and import bearings.
Every administration appears to be surprised that at every oppor-
tunity, such as this very hearing, industry after industry pleads for
consideration of its trade problems and for import adjustment. To
date the result has been only that they are described as "protectionist."
Gentleman, if being a protectionist means that we are attempting to
PAGENO="0142"
3742
protect American jobs, American communities, the American ideals
of fairplay, yes, we are "protectionists."
We urgently request, therefore, that this committee report out H.R.
11910 or amend title I of HI.R. 16920 to include antifriction bearings
along with textiles and leather footwear.
INDUSTRY ESSENTL&L TO NATIONAL DEFENSE
While the products of the antifriction bearing industry, in a very
real way, are one of the cornerstones of any industrialized society,
their posture in our program of national defense is even more im-
portant. Without bearings airplanes would not be able to fly to their
targets, missiles could not be guided, communications would flounder.
It would be safe to say that the defense capability of this country
would not only be crippled, it would be ruined.
There is no one who seriously questions the paramount role of bear-
ings as the controlling element in: the manufacture of practically
every item of defense hardware which has moving parts-in truth
this is the basic "pacing component." This historical record of this
industry in times of national crisis provides indisputable evidence of
the interrelationship between national security and a healthy, viable
antifriotion bearings industry. This interrelation again received re-
affirmation with the military buildup in Southeast Asia. Increased
requirements precipitated by active military operations pushed indus-
try production to new, a.fltime high. An important consideration was
the demand for spare bearings necessary to support military equip-
ment, particularly aircraft and helicopters in service. These require-
ments increased with the number of hours flown; hence, the need for
spare bearings increased to many times the number required for new
production. This is typical, and to `be expected, during any period
of actual military combat.
In all past wars the production capacity has served as a mobilization
base to supply defense needs. As imports have captured an ever-
increasing share of the U.S. market, domestic bearing productive
capacity has not built up at the same rate as the national lemand for
these items. Careful consideration should be accorded this threat that
the capacity of the bearing industry will not be sufficient in the next
wartime buildup.
IMPACT OF IMPORTS ON BALL BEARING INDUSTRY
Ball bearings have a history of export-import movement. There are
thousands of sizes, each with expensive tooling requirements. A pro-
ducing country can expect to export a portion of its high volume sizes
and will import other less widely used sizes. In the years following
World War II, the United States annually exported about 5 percent
of its ball bearing production. Early in this period imports were
minor. When imports started growing rapidly they concentrated on a
relatively few basic high volume types on which the product engineer-
ing had been accomplished. Ball bearings of these types provide the
volume and profit which enables the producers to engineer and de-
velop, at a reasonable price level, the more specialized lines upon which
our defense effort is so reliant. By 1969, reported imports of ball bear-
ings exceed exports of 47 percent ($15 million). Also in 1969, statistical
PAGENO="0143"
.*3743
data became available on the number of imported ball bearings of
various size groups. We are alarmed to find that more than one-third
of domestic consumption of ball bearings in the high production sizes
are imported. (See app. B, p. 3744.)
The United States has significant exports of ball bearings to Ger-
many, France, and the United Kingdom. This is not true for Japan.
Here artificial barriers to trade are raised in the form of import li-
censes and currency controls. Is this free trade? Certainly, it is not
fair trade.
IMPACT ON ROLLER BEARING INDUSTRY
The roller bearing industry is in the fortunate position of having, at
present, a favorable balance of~ trade, as compared with ball bearing
subindustry where the imports exceed exports by some 47 percent
and in fact, gentlemen, in certain significant high-production sizes of
ball bearings one-third of the U.S. consumption now is supplied by im-
ported bearings. But even with roller bearings the imports continue to
rise each year. In 1969 the increase over all was 17 percent, mainly
from Japan, which increased its exports into this country of roller
bearings by some 54 percent.
IMPORT STATISTICS
While import statistics are not a direct subject of these hearings,
their importance in demonstrating the effects of imports makes them
a matter of great concern. In 1969 the units of ball bearings were re-
ported for the first time which made it possible to quantify the serious-
ness of import penetration.
Present import statistical categories, while of great value, are still
not sufficient. One cause is that the U.S. Bureau of Customs has not
been given the money and people to collect the necessary information.
The number of employees simply has not increased with the growth
of imports. We recommend an increased budget to support the Bureau
of Customs.
CONCLUSION
Mr. Chairman, there is no question that international trade and the
numerous factors which are inherent in trade po]icies are extremely
complex. We have no all-encompassing proposal to establish a new
frontier in this area. Rather, in these few minutes I hope I have con-
veyed a sense of urgency for the Congress to legislate fair trade pro-
tection for our basic and vital industry.
Trying to stay within the allotted time, I have not included statistics
and other data. Also, we will be happy to supply to the committee,
or its staff, at your convenience all data available to us.
We are grateful for this oppOrtunity to appear before this com-
mittee. While recognizing the complexities of the problems, and the
need for thoughtful review of the views expressed during this hearing,
nevertheless our industry cannot afford a prolonged continuation of
our deteriorating position. We urge, therefore, early enactment of
meaningful protection.
Thank you, sir.
Mr. BURLESON. Thank you very much. That is a very impressive
statement.
Are there any questions from either Mr. Schiieebeli or Mr. Pettis?
PAGENO="0144"
3744
Mr. PETTIS. No questions.
Mr. BTJRLESON. Thank you very much, sir.
Mr. DEOAULP. Thank you, Mr. Chairman.
(App. A and B referred to follow:)
APPENDIX A-LIST OF MEMBERS OF ANTIFRICTION BEARING MANUFACTTJRERS
ASSOCIATION, l~7O
The Abbott Ball Co., West Hartford, Conn.
Aetna Bearing Co., a Textron Division, Chicago, Ill.
American Roller Bearing Co., Pittsburgh, Pa.
The Barden Corp., Danbury, Oonn.
Brenco, Inc., Petersburg, Va.
The Fafnir Bearing Co., Division of Textron, New Britain, Oonn.
The Federal Bearings Co., Inc., Poughkeepsie, N.Y.
Federal-Mogul Corp., Detroit, Mich.
FMC Corp., Link-Belt Bearing Division, Indianapolis, md.
Freeway Washer & Stamping Co., Cleveland, Ohio.
General Bearing Co., West Nyack, N.Y.
Hartford-Universal Co., Division of Virginia Industries, Inc., Rocky Hill,
Conn.
Hoover Ball & Bearing Co., Ann Arbor, Mich.
Industrial Tectonics, Inc., Ann Arbor, Mich.
Keystone Engineering Co., Los Angeles, Calif.
L & S Bearing Co., Oklahoma City, Okia.
Marlin-Rockwell, Division of TRW Inc.. Jamestown, N.Y.
McGill Manufacturing Co., Valparaiso, Inc.
Messinger Bearings, Inc., Philadelphia, Pa.
MPB Corp., Keene, N.H.
National Bearings Co., Lancaster, Pa.
New Departure-Hyatt Bearings Division, General Motors Corp., Santhisky,
Ohio.
New Hampshire Ball Bearings, Inc., Peterborough, N.H.
Norma FAG Bearings Corp., Stamford, Conn.
Orange Roller Bearing Co., Inc., Orange, N.J.
Pioneer Steel Ball Co., Inc., Unionville, Conn.
Rex Ohainbelt, Inc., Bearing Division, Downers Grove, Ill.
Rollway Bearing Co., Inc., Syracuse, N.Y.
SKF Industries, Inc., Philadelphia, Pa.
Smith Bearing Division. Garwood. N.J.
Sterling Commercial Steel Ball Corp., Sterling, Ill.
The Superior Steel Ball Co., New Britain, Conn.
The Timken Roller Bearing Co., Canton, Ohio.
The Torrington Co., Torrington, Conn.
Winsted Precision Ball Corp., Winsted, Conn.
APPENDIX B
PRODUCTION, EXPORTS, IMPORTS, AND DOMESTIC CONSUMPTION OF BALL BEARINGS, BY TYPE AND SIZE, 1969
[Quantity in thousands of units]
Consumption
within
Imports as
related to
Imports as
related to
Type and size
U.S. pro-
duction
Exports
Imports
United States
(2) minus (3)
plus (4)
consump-
tion
(percent)
produc-
tion
(percent)
(1)
(2)
(3)
(4)
(5)
(6)
(7)
Radial, O.D.:
o to 9 mm
9 to 30 mm
30 to 52 mm
Over 52 mm
Other than radial
Total
6, 232
66, 561
85, 939
75, 080
49, 499
373
3, 988
5, 149
4, 499
2, 966
2, 916
33, 871
39, 077
12, 749
3, 038
8, 775
96, 444
119, 867
83, 330
49, 571
33
35
33
15
6
47
51
45
17
6
283,311
16,975
91,651
357,987
26
32
Note: This tabulation does not include (1) ball bearings from Canada for assembly into automobiles. Total of these
(ball and roller bearings) in 1969 was $3,419,678; (2) unground (nonprecision) ball bearings. Totals believed to be small.
Source of data: U.S. production-Department of Commerce, BDSA preliminary data. Exports-Bureau of Census data
on value of exports has been used as a base. It has been assumed that exports are subdivided by size in the same ratio as
domestic production. Imports-Bureau of Censes data.
PAGENO="0145"
3745
Mr. B1~RLESON. The next witness is Mr. Edward M. Rhodes, special
consultant to American Sprocket Chain Manufacturers Association.
We are glad to have you, Mr. Rhodes. I see you have brought
samples.
STATEMENT OP EDWARD M. RHODES, SPECIAL CONSULTANT,
AMERICAN SPROCKET CHAIN MANUTACTURERS ASSOCIATION
Mr. RHODES. I thought you might like to know what a sprocket
chain looks like.
Mr. BURLESON. Proceed, Mr. Rhodes. If you wish to file your own
statement you may do so.
Mr. RHODES. We ask that our written statement, which we have
filed with the committee, be included as a part of the record.
Mr. BURLESON. Without objection, it is so ordered.
Mr. RHODES. In my oral testimony I should like to condense and
summarize.
My name is Edward M. Rhodes. I am a founder and past president
of the American Sprocket Chain Manufacturers Association. I was
active in the sprocket chain business for 26 years with Rex Chain
Belt, Inc. At present I am consultant for the association.
The American Sprocket Chain Manufacturers Association is a
voluntary nonprofit association. The 12 member companies of
ASCMA. and a number are represented in the hearing room today,
account for substantially all of the domestic production of sprocket
chain. We have chain plants in Connecticut, Illinois, Indiana, Massa-
chusetts, New York, North Carolina, Ohio, Pennsylvania, Tennessee,
and Wisconsin.
This statement is limited to the types of sprocket chain known as
transmission roller chains, and leaf chains, which are covered by
American National Standards Institute Standards B29.1, B29.3,
B29.4, B29.5, and B29.8.
These types of chains are known as roller chain. Roller chain built
to these specifications range from quarter-inch pitch to chains which
can weigh over 60 pounds a foot and have a breaking strength of
half a million pounds.
Seven U.S. companies, all members of ASOMA, account for all the
roller chain manufactured in the United States. A 15-year history
of U.S. production assembled by ASMOA, is given on page 3 of our
written statement.
Roller chain manufactured in the United States in 1969 weighed
65 million pounds. totaled $90 million, and employed 4,850 people.
These production fig-ures are illustrated on page 5, figure 1, of our
written statement.
In units, domestic roller chain has aver~i~e 63 million pounds an-
nually for the past 5 years. The U.S. production peak was in 1966
at 68 million pounds, and has been below this ever since even though
the economy has grown in this period. But imports of roller chain,
shown on page 4 of our written statement, in tabular form, have grown
rapidly throughout this whole period. In the last 14 years domestic
uroduction has grown less than 50 percent, from 44 million pounds
in 1955 to 65 million pounds in 1969. But in these same 14 years, imports
PAGENO="0146"
3746
have grown from one a.nd a half million to 2~ million pounds, a 1,360-
percent increase.
Now, where is all this roller chain used? You probably first saw a
roller chain on a bicycle where it is used to transmit power from the
pedals to the rear wheel. Later on you may have seen chain in a bot-
tling plant or dairy or on a power shovel or lift truck. Roller chains are
used as an essential component part of a multitude of machines, from
photographic, radio, and office equipment. to agricultural combines for
harvesting wheat or corn and for picking cotton, to huge slings for
handling hundred-ton forgings.
Typical military uses for roller chain include aircraft, both combat
and cargo, military trucks, tanks, all sorts of naval craft, amphibious
vehicles, missile launchers, military construction equipment and sup-
ply depots. All these require cha.in.
To feed troops we need food processing and packaging equipment
and water purification machinery. To clothe them, cotton gins, spin-
ning mills, looms and sewing machines. And to house them, construc-
tion equipment of all kinds. Saw mills and woodworking machinery
are required. In hospitals, elevators and even X-ray equipment use
roller chain.
To transport men we need trucks, automobiles, locomotives, commer-
cial aircraft. To move material, lift trucks and hoists. All these use
roller chain.
And to build military and strategic equipment takes roller chain
for machine tools, for industrial furnaces and ovens, industrial
machinery, automatic a.ssemblying machines, material handling
equipment.
To provide and transport raw materials and fuels, coal mining and
processing, ore mining machinery. Steel mills, oilfield drilling, cement
mills, all depend on roller chain.
So to maintain U.S. productive facilities replacement chains are
essential.
The largest market category for roller chain is agricultural imple-
ments. Chain drives and conveyors are used on machines for seeding,
fertilizing, mowing, harvesting, handling, conveying and elevating
almost every farm crop-grains, fruits, and vegetables.
Our human foods as well as feed for cattle and poultry are again
handled after harvesting on chains or chain driven machinery when
they are prepared and packaged.
Another large market for chain is construction equipment. Power
cranes, shovels, ditch diggers, concrete mixers, gravel plants all use
chain.
Road building machinery, from earth moving to final paving, de-
pends on chain conveyors and chain drives.
But the replacement market is the largest of all. Chain drives can
be selected to outlast the equipment on which they operate, but many
applications of roller chain are made on a "limited life" basis to save
space, weight, and original cost. On t.hese limited lift applications,
which include construction, agricultural, and most mobile equipment,
the chains must be replaced from time to time during the life of the
machine, just as new t.ires and batteries must be installed in an auto-
mobile occasionally.
PAGENO="0147"
3747
Roller chain is essential to the TJ.S. economy. In all these machines
roller chains are the tendons that connect the muscles, the power
source, with the fingers that grasp and twist and lift and carry and
turn and position. Roller chains wear out and must be replaced if the
equipment is to function.
In an emergency we must continue to have the ability here at home
to produce chain and to design and build chainmaking machinery.
This capability cannot be created overnight. For example, it takes 4
to 6 years experience after college to train a designer of chain ma-
chinery. We think it is essential that the United States maintain a
strong chain manufacturing capacity. Roller chains are indispensable
in our economy.
Now we in the industry have seen what happened to bicycle chain.
In 1948 U.S. manufacturers produced over 14 miles of bicycle chain
every working day for the domestic market. But imports, first from
Europe and then from Asia, damaged this domestic production so
much so that 10 years later, in 1958, U.S. production went from over
14 miles a day to about half a mile a day. Today, U.S. production of
chains for bicycles is practically zero. All but one manufacturer has
abandoned this item completely. The special machinery to produce
chains for bicycles has been junked or dismantled.
It is too late to do anything about bicycle chain, but we can profit
from our bicycle chain experience because today we see the same importS
trends in the whole industry that we saw 20 years ago in bicycle chain.
The growth of imported chain ~s a percent of the total U.S. chain
market-that is, U.S. production plus imports-is given on page 3748
and illustrated on page 3749 of our written statement.
In 1955 imported chain amounted to only 3.3 percent of domestic
consumption. Last year in 1969 imported chain was over 25 percent of
U.S. usage of roller chain, more than ~½ times the 1955 percentage.
This means for every 3 pounds of chain that we made here in the
United States we imported 1 pound.
If this trend continues, if imports continue to take over more and
more of our domestic market, U.S. plants will not be able to support
our needs in .an emergency.
We need chains not only for essential military and strategic equip-
ment but for feeding and housing our civilian population and our mili-
tary forces.
In our business we have a saying that you need chains wherever
wheels turn. We won't be able to meet these needs domestically if the
entire chain industry continues this way and goes the way of bicycle
chain.
Our statement is intended to furnish the committee with current and
accurate information as to the impact of imports on one small but
vital segment of American industry. It is not intended to present a
legal or political analysis of all the various trade proposals pending
before the committee. But we want to state our general position as to
three of those proposals:
First, we strongly endorse the proposal advanced by both the admin-
istration and Chairman Mills to liberalize the escape clause and to
make relief against injury caused by imports more readily available.
We think relief should be available when an industry can show that
imports have played a substantial role in causing or threatening injury.
PAGENO="0148"
3748
Second, we urge that serious consideration be given to the enactment
of omnibus quota legislation. It may be that some form of potentially
available, across-the-board, quantitative restrictions on imports is the
only practical way to stave off the further injury that threatens not
only chain manufacturers but many other producers of important in-
dustrial products.
Third, and less controversial, we favor amendment of the Anti-
Dumping Act of 1921 to make relief against dumping more practically
available. It appears likely that many foreign chain sales in the United
States are at prices below those in the home market. To provide a
realistic procedure for obtaining relief in the event that further
studies confirm our assumptions, we urge enactment of legislation
which would eliminate significant weaknesses in the 1921 statute.
We appreciate the opportunity to present this testimony, Mr.
Chairman.
(Mr. Rhodes' prepared statement follows:)
STATEMENT OF EDWARD M. RHODES, SPECIAL CONSULTANT, AMERICAN SPROCKET
CHAIN MANUFACTURERS ASSOCIATION
I. This statement is presented by the American Sprocket Chain Manufacturers
Association (hereinafter referred to as ASCMA). The ASCMA is a voluntary
nonprofit trade, association comprised of U.S. firms and corporations engaged in
the design, manufacture, `and sale of sprocket chains for the mechanical transmis-
sion of power and for conveying and elevating. The 12 member companies of
ASCMA account for substantially all of the domestic production of sprocket
chain, and have chain plants in Connecticut, Illinois, Indiana, Massachusetts,
New York, North Carolina, Ohio, Pennsylvania, Tennessee, and Wisconsin.
ASCMA speaks on behalf of the industry in matters of general concern, such
as the establishment of standards for chains and sprockets.
II. Description of roller chain: This statement is limited to the types of
sprocket chain known as transmission roller chains (and leaf chains) as covered
by American National Standards Institute Standards B29.1, B20.3. B29.4. B29.5.
and B29.8. These types of chains are known in the trade as "roller chain" and
will be referred to as such hereinafter.
Seven 11.5. companies, all members of ASCMA, account for all the roller chain
manufactured in the United States.
TABLE 1
III. ROLLER CHAIN MANUFACTURED IN UNITED STATES
Year `
Quantity
(thousand
pounds)
Amount
(thousand
dollars)
Employment
1955
1956
1957
1958
1959
1960
1961
1962
1963
1964
1965
1966
1967
1968
1969
43,700
45,700
40,700
34, 100
47,500
42, 800
40,400
46, 200
48, 400
56, 200
60, 300
68, 100
60, 800
62, 100
64,900
45, 600
51, 500
49,700
45, 500
63,200
57, 100
56,700
62, 200
65, 800
74, 400
78, 300
89, 600
80, 400
84, 300
90, 200
3, 410
3, 730
3,710
3, 300
3,990
3 850
3, 750
3, 820
3, 950
4, 41 0
4, 530
4, 980
4, 690
4, 540
4, 850
Statistics on domestic production of roller chain are assembled by ASCMA and
represent all or substantially all of the roller chain produced in the United
States of America.
PAGENO="0149"
3749
TABLE 2
IV. ROLLER CHAIN IMPORTED
Year
Quantity
(thousand
pounds)
Amount
(thousand
dollars)
1955
1956
1957
1958
1959
1960;
1961
1962
1963
1964
1965
1966
1967
1968
1969
1,500
1,900
3,600
3,300
5,500
5,900
5,700
6,400
7,300
10,600
13,400
14,200
13,300
18, 200
22,000
500
600
1,200
1,400
2,700
2,800
3,000
3,400
3,700
5,200
6,500
7,400
7,200
9, 500
11,100
Note: 1969 Imports weighed 14.7 times 1955 imports.
Imports statistics are based on: U.S. Bureau of the Census Report No. FT-135,
Group 698-Manufacturers of metal, not shown elsewhere; item 6983020, chains
used for the transmission of power and parts thereof, of iron or steel.
Imports of power transmission chains, other than finished roller chains, included
in these statistics are insignificant and undoubtedly amount to less than 1 percent
of the total.
PAGENO="0150"
FIGURE 1
ROLLER CHAIN: DOMESTIC AND IMPORTED
(in Millions of Pounds)
1955 through 1969
~ ~ ~
~T~IT~1LTT
I I I
H
1 I I
~.. .~
I J~tAI&i4irI i&.
``
I. . I I*
~`~~1~RJ2
!=--1~~- ~
.`.
. : . : : I : : ~
i~1 I .!...~........_! J).14'I ;I:I:I.::iI~t~~
I. .~ I
:..~.\.fJ ~ ________________________________________________________
4c~ 1 F-i
+ ~ T4~
- I'~ ~I
3750
H
~.. I
*1 . I
:,:::::4:
I hhi7o
I.- -
55 S?~ S7 £& GO ~( ~4 ~5 G(o ~7 G9 ~9
Figures from Tables 1 and 2, Pages 3 and
PAGENO="0151"
3751
TABLE 3
V. IMPACT OF IMPORTS ON TOTAL U.S. ROLLER CHAIN MARKET
Total market
Year
(thousand
pounds) (from
tables 1 and 2)
Percent
imported
1955
1956
1957
1958
1959
1960
1961
1962
1963
1964
1965
1966
1967
1968
1969
45, 200
47,600
44,300
37, 400
53,000
48,700
46, 100
52, 600
55,700
66, 800
73,700
82, 300
74, 100
80,300
86, 900
3. 3
4.0
8.1
8. 8
10.4
12.1
12. 3
12. 2
13.1
15. 9
18. 2
17. 2
17. 9
22.7
25. 3
Note: For every 3 pounds of U.S-made roller chain in 1969, we imported 1 pound. Had this imported roller chain been
made here, 1,600 more people would have been employed by the industry.
PAGENO="0152"
FIGURE 2
3752
GROWTH OF IMPORTED ROLLER CHAIN
as a percent of
Total United States Usage
(U.S. Production plus Imports)
in pounds.
:L.
~FI
~1I~
1..J~I.
T.
2O~ ~
*~:**
T
[~
I5~~
LT~
lO~
k~4
~ /
- --
~
r~r
~J7
*..
--
~_
L
~~H-
I
.JJ..J:_
~
.J~_
~
-
~!=
~i"iii
i±~T.
.~. ~
-
iI5~
~
`H
H
E~
H
.ii~LI
~
HE
~.-.
HE
.J....
[TIlE
~
i
55 .% 57 ..% 59 GO Cl (~Z ~ ~4 ~5 ~é 68 69
I I:~
Figures From Table 3, Page 6
PAGENO="0153"
3753
VI. Typical uses of roller chain: You may have first seen a roller chain on a
bicycle where it is used to transmit power from the pedals to the rear wheel. Later
on you may have seen chains in a bottling plant, on a power shovel digging a
foundation, or on a lift-truck in a warehouse.
Roller chains built to specifications of the American National Standards
Institute range from quarter-inch pitch requiring 192 parts to form 1 foot with
a total weight of less than one and one-half ounces, to chains weighing over 60
pounds per foot with a breaking strength of half a million pounds.
Roller chains like these are used as essential component parts of a multitude
of machines-from photographic, radio, and office equipment to agricultural "com-
bines" for harvesting wheat or corn and for picking cotton, to huge slings for
handling hundred-ton forgings.
(a) Typical military uses of finished roller chain:
Aircraft, combat-control linkages; canopy mechanism; radio tuning drive;
stabilizer control.
Aircraft, cargo-kneeling mechanism; conveyors.
Military trucks-engine timing drive; propel drive.
Battle tanks-ammunition conveyor; gun charging mechanism; engine timing
drive.
All terrain vehicles-propel main drive.
Naval craft-steering mechanism; elevator; ammunition conveyor; sonar
equipment; diesel engine timing; pump drives; winch drives; torpedo storage;
hoists.
Communications-radio mechanisms; radar mechanisms; radar dome rotator;
radar calibration equipment; reconnaissance camera synchronizer.
Amphibious vehicles-Track mechanism; various drives.
Supply depots-Conveyor chain; lift truck chain.
~Explosives manufacturing-Curing Conveyor.
Ammunition manufacturing-conveyor mechanism.
Missile launching (land and ship based)-hoist mechanism; positioning
mechanism.
Airport runway maintenance-sweeper drives; sweeper conveyors.
Military construction equipment-main drive; propel drive; hoisting drive;
conveying mechanism; digging mechanism.
(b) Typical strategic uses for finished roller chain:
1. Feed ( clothe, house, and care for trOops-
a. Feed-
(1) Agricultural equipment.
(2) Food processing equipment.
(3) Food packaging equipment.
(4) Kitchen equipment.
(5) Water purification machinery.
b. Clothe-
(1) Cotton harvesting machinery.
(2) Cotton gins.
(3) Spinning mills.
(4) Looms.
(5) Sewing machines.
c. House-
(1) Construction equipment.
(2) Earthmoving equipment.
(3) Concrete mixing and placing machinery.
(4) Air compressors.
(5) Saw mill machinery.
(6) Woodworking machinery.
d. Care-
(1) Hospital equipment.
(2) X-ray equipment.
2. Transport men and material-
a. Trucks `and automobiles.
b. Locomotives.
c. Commercial aircraft.
d. Lift trucks.
e. Conveyors.
f. Cargo handling.
g. Cranes and hoists.
46-127 0-70-pt. 13-1O
PAGENO="0154"
3754
3. Establish operational bases-
a. Airport runway construction.
b. Roadbuilding.
c. Paving.
d. Earthmoving.
4. Build military and strategic equipment-
a. Machine tools.
b. Industrial furnaces and ovens.
c. Metalworking.
d. General industrial machinery, such as:
(1) Plating.
(2) Automatic assembly machines.
(3) Cutting and sawing machines.
(4) Straighteners.
e. Waste disposal.
f. Material handling.
5. Maintain and repaid military equipment-
a. Maintenance equipment.
i. Replacement chains.
6. Provide and transport raw materials and fuels-
a. Coal mining and processing.
b. Metallic ore mining.
c. Steel mill equipment.
d. Oilfield drilling equipment.
e. Pipeline construction and operating equipment.
f. Lumbering and sawmill machinery.
g. Cement mill equipment.
7. Maintain U.S. productive facilities-
a. Replacement chains.
Q. Maintenance equipment.
(c) Typical industrial uses of roller chain: The largest market category for
roller chain is agricultural implements. Chain drives and conveyors are used
on machines for seeding, fertilizing, mowing, harvesting, handling, conveying,
and elevating almost every farm crop-grains, fruits, and vegetables from peas to
potatoes. Our foods as well as feed for cattle and poultry, are again handled, after
harvesting, on chains or chain-driven machinery when they are prepared and
packaged. Milk containers, for example. are manufactured, sterilized, filled, and
conveyed by machinery utilizing chain.
Construction equipment is another large market for chain. Power cranes and
shovels, ditch diggers, concrete mixers, and gravel plants all use chains.
Road-building machinery-from earthmoving to final paving with asphalt or
concrete-depends on chain conveyors and chain drives.
The replacement market is the largest chain user of all. While chain drives
can be selected to outlast the equipment on which they operate, many applica-
tions of roller chain are made on a "limited life" basis to save space, weight and
original cost. On these limited life applications (which include construction,
agricultural, and most mobile equipment) the chains must be replaced from time
to time during the life of the machine. For this reason roller chains must be
readily available for replacement wherever such equipment is used-just as
new tires, batteries, and mufflers must be installed in an automobile occasionally.
\TJJ Roller chain essential to U.S. economy: In all these machines roller chains
are the tendons that connect the muscles-the power source-with the fingers
that grasp or twist or lift or carry or turn or position. Roller chains wear out
and must be replaced if the equipment is to function.
In an emergency we must continue to have the ability here at home to produce
chain and to design and build and maintain chanmaking machinery. This capa-
bility cannot be created overnight. It takes 4 to 6 years' experience after college
to train a designer of chain machinery. After an apprenticeship it normally re-
quires more than 5 years of training before a man can build the machinery to
make chain. Skilled setup and repairmen need years of training. Operators usually
require 6 months to become proficient.
We think it is essential that the United States maintain a strong chain manu-
facturing capacity. Roller chains are indispensable in our economy.
We have seen what happened to bicycle chain. Bicycle chain was really the be-
ginning of the roller chain industry in the United States back in the 189O'~ By
PAGENO="0155"
3755
1948 U.S. manufacturers produced over 14 miles of bicycle chain every working
day for the domestic market. But imports, first from Europe, then from Asia,
damaged this domestic production so much that 10 years later, in 1958, U.S.
produtcion went from over 14 miles ~ day to about one-half mile a day.
Today, U.S. prouction of chains for bicycles is insignificant. All but one
manufacturer has abandoned this item completely. The special machinery to
produce chains for bicycles has been junked or dismantled. Pt is too late to save
these jobs and skills. But we can profit from this experience.
VIII. Trend of imports: Today we see the same import trends in the whole
industry that we saw 20 years ago inbicycle chains. In the last 14 years imports
have grown from 1.5 million pounds (750 tons) in 1955 to 22 million pounds (11,000
tons) in 1969-almost 15 times as much. Pounds of domestic production of roller
chain have grown less than 11/2 times in this same period. Actually, domestic
output in 1967, 1968, and 1969 was below 1966.
In 1955 imported chains on which duty was paid amounted to only 3.3 percent
of the total U.S.. roller chain consumption. Last year, 1969, imports accounted
for 25.3 percent of the U.S. usage of roller chain, more than 71/2 times the 1955
percent.
If this trend continues, if imports continue to take over more and more
of our domestic market, U.S. plants will not be able to support our economy
in an emergency. We need chains not only for essential military and strategic
equipment but also for feeding and housing our civilian population and mili-
tary forces. We need chains to maintain our factories throughout the Nation.
We will not be able to meet these needs domestically if the entire chain
industry goes the way of bicycle chain.
IX. Recommendations: This statement is intended to furnish the committee
with current and accurate information as to the impact of imports on one
small but vital segment of American industry. It is not intended to present
a legal or political analysis of all the various trade proposals pending before
the committee. We do, however, want to state our general po~ition as to three
of those proposals.
First, we strongly endorse the proposal, advanced by both the administration
and Chairman Mills, to liberalize the "escape clause" to make relief against
injury caused by imports more readily available. Under the present law, as
we understand it, it is necessary, in order to secure relief, to show that serious
injury, or the threat thereof, has resulted in major part from imports attrib-
utable to tariff concessions. We think relief should be adavilable when an in-
dustry can show that imports, whether or not resulting from tariff concessions,
have increased to the point where they are causing or threatening serious injury.
Also, we think it should be necessary only to show that imports have played a
substantial role in causing or threatening that injury, not necessarily the "major"
or "primary" role.
second, we urge that serious consideration be given to the enactment of
omnibus quota legislation, such as HR. 13975. We realize that such proposals
may have significant foreign policy ramifications and that, in arriving at a
position with respect to them, competing and sometimes conflicting national
interests must be balanced. But today we are witnessing, as perhaps never
before in our history, the real possibility of our losing, because of the pressure
of imports, important segments of our vital industrial base. it may be that
some form of potentially available across-the-board quantitative restrictions
on imports is the only practical way to stave off the further injury that threatens
not only chain manufacturers but many other producers of important industrial
products.
Third, and less controversial, we favor amendment of the Anti-Dumping Act
of 1921 to make relief against dumping more practically available. We have no
specific information `to present `at this time as to the comparative selling prices
of foreign (particularly Japanese) chain in the United States and in the home
market, though it appears exceedingly likely that many foreign chain sales in
the United States are at prices below what is charged at home. To provide a
realistic procedure for obtaining relief in the event that further studies confirm
our assumptions, we urge enactment of legislation, si.mch as H.R. 17605, which
would eliminate significant weaknesses in the 1921 statute.
\Ve appreciate the opportunity to present this testimony.
PAGENO="0156"
3756
MEMBERS OF THE AMERICAN SPROCKET CHAIN MANUFACTURERS AsSoCIATION
Acme Chain Division, North American Rockwell Corp., Holyoke, Mass.
Atlas Chain & Precision Products Co., Inc., West Pittston, Pa.
Diamond Chain Co., Indianapolis, md.
Hewitt-Robins Inc., Stamford, Conn.
Jeffrey Manufacturing Co., Columbus, Ohio.
Link-Belt, Chain and Conveyor Components Division, FMC Corp., Indianapolis,
md.
Moline Malleable Iron Co., St. Charles, Ill.
Morse Chain, Division Borg Warner Corp., Ithaca, N.Y.
Peoria Malleable, Division of Woodward Co., Peoria, Ill.
Ramsey Products Corp., Charlotte, N.C.
Rex Chainbeit Inc., Milwaukee, Wis.
Webster Manufacturing, Inc., Tiffin, Ohio.
Mr. BURLESON. Thank you for coming, Mr. Rhodes.
Mr. Pettis, do you have a question?
Mr. PErrIs. Thank you, Mr. Chairman.
I would like to ask one question in relation to that chart. Has the
technology, I guess that is the right word, the technology in the manu-
facture of these chains, had any significant advance in the last few
years from the standpoint of metallurgy and so on?
M~. RHODES. No, I don't think so. This is not a new industry. There
have been advances and there have been improvements made, but I
don't think there have been any major breakthroughs.
Mr. PErrIs. You mention in your testimony that replacement is an
important factor in this.
Mr. RHODES. Yes, sir.
Mr. PETTIS. Is it possible one day to make a chain that will last
as long as the machine on which it operates?
Mr. RHODES. We can do that today but it would make the machine
too heavy. It would take more fuel to operate it. It would make it
heavier and it would take more space. It is more economical to put on a
chain that must be replaced.
Mr. PETTI5. Really improving the chain is not going to help this
declining market?
Mr. RHODES. No. Imports show a growth rate of about 17 or 18
percent over the last 14 years. The domestic industry has been on the
decline since 1966. This year for the first few months for which we have
statistics domestic production is down and imports are up compared
to last year. So this is getting worse.
Mr. PETTIS. Thank you, Mr. Chairman.
Mr. BURLESON. Thank you again, Mr. Rhodes.
Just let me add that I know more about roller sprocket chains than
I knew before. That may not be saying a lot.
Mr. RHODES. What, on drilling equipment?
Mr. BURLESON. No, generally. Thank you again, sir.
Mr. RHODES. Thank you.
Mr. BURLESON. Our next witness is Mr. James A. Graham, chair-
man of the Government & International Affairs Committee of the
Industrial Fasteners Institute and Frank Masterson, president of the
institute.
PAGENO="0157"
3,757
STATEMENT OF PRANK MASTERSON, PRESIDENT, INDUSTRIAL
FASTENERS INSTITUTE, AND' JAMES A. GRAHAM, CHAIRMAN,
GOVERNMENT AND INTERNATIONAL AFFAIRS COMMITTEE
Mr. GRAHAM. The Industrial Fasteners Institute has submitted a
statement, a summary statement which I would like to submit for the
record, and I will confine my remarks to highlighting some of the
points.
Mr. BURLESON. Your statement will be included in the record in its
entirety.
Mr. GRAHAM. Thank you, sir.
Mr. BuRLESON. You may proceedS, sir.
Mr. GRAHAM. I am James A `Graham, vice president of Standard
Pressed Steel Co., an international company engaged in the manufac-
ture of mechanical fasteners, headquartered in Jenkintown, Pa. I am
also chairman of the Government & International Affairs Committee
of the Industrial Fasteners Institute. I am accompanied today by
Frank Masterson, who is the president of the Industrial Fasteners
Institute.
Mr. BURLESON. I assume fasteners are zippers, is that right?
Mr. GRAHAM. That is a type of fastener, sir, but we do not include
it in the mechanical fastener industry that we are representing here
today.
The Industrial Fasteners Institute represents the industry that pro-
duces mechanical fasteners of the threaded type, including rivets, nuts,
bolts, that type of fastener.
Our industry serves a variety of all industry including aerospace,
automotive, appliance, construction, communications, electronics,
petrochemicals, with a great deal of activity in both the military and
civilian industrial areas.
This product that we represent is in the `broadest sense used in prac-
tically every type of mechanical assembly, including much of the elec-
tronic industry. Wherever something has to be held together with a
strength requirement there would be a mechanical fastener application
involved.
Our association represents an industry that has sales of about $2
billion per year in the United States. Our association represents 50
members with about 125 plants and the Institute includes about 50
percent of the $2 billion in sales. The total employment in our industry
is approximately 75,000.
My remarks on behalf of the Institute are directed primarily to the
increasing problem of the great imbalance of fastener trade with
Japan. Now I would refer in our prepared statement to exhibit 1 where
statistical information is given regarding the trend on fastener exports
and imports and in this exhibit it is apparent that since 1964 through
1969 that the imports of mechanical fasteners from Japan into the
United States have just about tripled, a little more than tripled.
In listening to some of the testimony earlier today from industries
that are related to ours in a mechanical sense, it seems to me that more
and more we find evidence that wherever there is a high degree of
standardization involved in a product such as a nut or bolt or bearing
or a roller chain, that you will find that that particular market is par-
PAGENO="0158"
3758
ticularly attractive to imported products because generally with a
high degree of standardization goes an opportunity for volume sales.
This country has done an extremely good job of standardizing hard-
ware parts such as fasteners. We lead the world in our engineering
standards and for all types of threaded products. Our standards are
accepted throughout the world as the leading type of engineering
document for the product involved. `What we are requesting considera-
tion for here is to primarily set up a control so that the Japanese
fastener exports to the United States would be leveled off at least at
the 1968 level which was approximately $40 million until such time as
U.S. fastener exports to Japan reach a level of approximately $30
million.
In our statement here we are asking for a fair trade opportunity. We
seek reciprocal fairness. Fair international trade is now not possible
with Japan because of their punitive nontariff barriers and licensing
practices. The U.S. fastener industry is unique. It has worldwide
leadership in engineering development and documentation, use of
materials and nonmetals. Most of the development on fasteners has
taken place in this country. `We supply more than 200 billion engi-
neered assembly components annually.
Our industry is best represented in markets where heavily docu-
mented engineering performance standards for assembly are required.
The reason we are asking for such action is that nontariff barriers in
Japan preclude any equitable balance of trade in fasteners.
The Japanese Government acts as a state monopoly. They have
rationalized their fastener industry, providing for allocation of mar-
kets both domestic and foreign, determination of prices, and have
given Government inducements to export and for the protection of
their domestic fastener industry, very similar to the comment made
by the bearings people.
U.S. fastener manufacturers at the request of our Government have
cooperated with fastener study teams from Japan. Included in our
statement is an exhibit from the fasteners institute publication out of
Japan and quoting from this statement, "Fasteners industry"-this is
in Japan-"is now playing an important role in the improvement of
the fastener balance of trade in Japan," and "Importation of fasteners
into Japan is limited to those of special types and naturally the amount
is very low."
For the year 1969 there is a U.S. deficit of fastener trade with Japan
of over $50 million. For the years 1965 through 1969 there is a U.S.
deficit of fastener trade with Japan of over $200 million. This is a sub-
stantial and growing trade deficit for the United States with only one
important trading partner. `We feel that this trade deficit with Japan is
not caused by U.S. inefficiency.
We have included in our statement certain productivity factors
which would indicate that there is a good possibility for the U.S.
fastener industry to sell on a competitive basis in Japan. Our pro-
ductivity per man-hour is considerably higher than the Japanese
statistics indicate. So we feel that the deficit is not coming from U.S.
inefficiency, lack of innovation or development. Most of the develop~
ments are coming from here. But due primarily to factors that are
I)llnitive in nature, nontariff barriers. In 1969 the United States was
PAGENO="0159"
3759
able to meet world competition with a variety of national nontariff
barriers because of superior product and strong exporting market
effort. Excluding Japan for 1969 the United States would have had a
favorable fastener balance of $21 million plus. With the unfavorable
balance with Japan of $50 million plus, our net advantage was wiped
out and we wound up with a deficit of $29 million for the year.
One thing more to clarify the value of shipments into this country.
We have not incorporated the disadvantaged to the United States of
using the CIF/FOB value differences which would add roughly 15 to
20 percent to the figures that we show here in our statistics.
It is a major goal and an urgent necessity for the United States to
increase exports and secure favorable balance of trade. The Industrial
Fasteners institute supports the need to increase exports. If we achieve
the stated goal of increasing exports to Japan to $30 million, and this
is our industry's goal, our industry would be doing its part to secure
an overall favorable balance of trade for the United States.
We feel that Japan can accept increased amounts of fastener im-
ports from the United States. They have unchallenged leadership in
shipbuilding. They ale ranking very high, second or third, in auto-
motive, electronics, cameras, et cetera. So they do have a good fastener
market and we think we can compete. Indications lead us to believe
that the voluntary Japanese steel quotas which have been in effect will
result in a shift of Japanese steel exports to the United States from
raw material to some other form such as finished goods like fasteners,
perhaps even bearings or roller chain. And this shift could rapidly
widen the adverse balance of trade which is already unjustifiably high
in our opinion.
Our industry is in favor of fair international trade when both
partners are bound by the same rules. This is not the situation in the
case of fastener products which are virtually excluded as imports into
Japan by nontariff barriers and which are subject to little or no
restriction as imported products in the United States.
For example, a standard hexagon nut, which is the most basic
product of our indutry, used in billions of pieces per year, has a tariff
in the United State.s of less than three-tenths of a cent a pound at
this time.
Incidentally, that is a product line on which we have had severe
concentration by the Japanese fastener industry. We have virtually
stopped any further expansion and caused, as a matter of fact, a
regression of the capacity to produce that type of product in the
United States over the last 4 to 5 véars.
The U.S. fastener industry's overall position with reference to
trade with Japan can be summarized as follows:
Almost 54 percent of the total fastener imports to the United States
are from Japan and are valued at a little over $52 million per year,
whereas only 2.4 percent of the total fastener exports from the United
States are to Japan and are valued at slightly under $2 million, and
I can add parenthetically that this type of fastener that is being
exported to Japan is predominantly for the aerospace industry where
there are U.S. airplanes in Japan that need servicing and it comes in
the area of spare parts and also for the military and certain electronic
PAGENO="0160"
3760
equipment which requires maintenance where the fastener is available
only from the United States.
Our industry knows the necessity to export, has the capability to
export and both the strength and desire to increase exports. We favor
international trade and a reasonable sharing of U.S. markets.
Our industry record for exports excluding Japan is good. The
Japa.nese trade in fasteners in the United States we estimate has cost
approximately 2,500 U.S. jobs in the fastener industry. So in summary
I would like to say that our industry, which is SIC Code 3452, supports
the goals and philosophy of the Mills international trade bill, H.R.
16920, and we respectfully request that these goals be extended to
include all products in our SIC Code. At present "we have some relief
for the U.S. industry available in the form of adjustment assistance
and escape clause action, very difficult to come by, however. A .third
and valuable addition would be to provide fair and reciprocal trading
rules which would automatically go into operation once certain ceilings
do occur.
We seek `from your committee the type of U.S. job protection for
our industry and fair play in international trade that your `bill pro-
poses to secure for textiles and shoes.
The Industrial Fasteners Institute urges Government and legisla-
tive action for the fasteners industry following the goals and objectives
of the Mills bill especially in trade with Japan.
We urge legislative action which would maintain the level of Japa-
nese fastener exports to the United States at a~ rate of not more than
$40 million annually, the high value reached in 1968.
I might add that there is a higher value in 1969 that was added as
a very recent statistic not available when we prepared this statement.
But the level was $40 million in 1968. We propose that we hold it at
that level.
At such time if the U.S. fastener exports to Japan reach $30 million
annually the increase of the U.S. market available to Japan would
be proportional to the growth of U.S. fastener exports to Japan.
Mr. `Chairman, that is in summary our statement. We appreciate
the opportunity to present it to the committee.
(The prepared testimony of the Industrial Fasteners Institute
follows:)
PAGENO="0161"
3761
STATEMENT OF THE INDUSTRIAL FASTENERS INSTITUTE
CONCERNING FAIR INTERNATIONAL TRADE
HR 16920
Our industry - SIC 3452 - supports the goals and philosophy of
the Mills International Trade Bill. lie respectfully request
that these goals be extended to include all products in SIC 3452.
At present, relief to U.S. industry is available in the form of
Adjustment Assistance and Escape Clause action. A third and
valuable addition would be to provide fair and reciprocal trad-
ing rules which would automatically go into operation once cer-
tain ceilings or conditions occur.
We seek from your Committee the type of U.S. job protection for
our industry and fair play in international trade that your bill
proposes to secure for textile and shoe industry workers.
The Industrial Fasteners Institute urges government and legis-
lative action for the Fasteners Industry following the goals and
objectives of the Mills Bill, especially in trade with Japan.
We urge legislative action which would:
Maintain the level of Japan fastener exports to the
U.S. of $40 million dollars annually the high value
reached in 1968. At such time, if U.S. fastener
exports to Japan reach $30 million dollars annually,
increase of the U.S. market available to Japan would
be proportional to growth of U.S. fastener exports to
Japan.
PAGENO="0162"
3762
The Industrial Fasteners Institute is the association of manufacturers of products
in SIC 3452: nuts, bolts, screws, rivets and special engineered assembly components
which are vital to the safe performance of all vehicles, electronic systems, machin-
ery and structures.
The Industrial Fasteners Institute urges government and legislative action which
would:
Maintain the level of Japanese fastener exports to the U.S. at
$40 million annually, the high value reached in 1968.
At such time as U.S. fastener exports to Japan reach $30 million
annually, increase of the U.S. market available to Japan would
be proportional to the growth of U.S. fastener exports to Japan.
We seek reciprocal fairness. Fair international trade now is not possible with Japan
because of their punitive nontariff barriers.
The U.S. Fastener Industry is unique, has world-wide leadership in engineering develop-
ment and documentation, use of metals and nonmetals, and serves as a problem-solving
industry to all other manufacturing, construction and servicing industries including
all war materiel.
The U.S. Fastener Industry supplies more than 200 billion engineered assembly compo-
nents annually.
U.S. world leadership is greatest in mass assembly which relies heavily on documented
engineering performance standards for fasteners and assembly components.
PAGENO="0163"
3763
Our Statement will show the request to the U.S. Government to maintain Japanese
fastener exports to the U.S. at $40 million annually until U.S. fastener exports
to Japan reach $30 million annually is fair, reasonable, attainable and in the
best interests of both trading partners.
Such action is needed now:
1. Nontariff barriers in Japan preclude any equitable
balance of trade in fasteners.
2. The Japanese Government acts as a State monopoly. They
have `rationalized" their Fastener Industry providing for
allocation of markets - domestic and foreign, determina-
tion of prices, government inducements to export and pro-
tection of the domestic fastener industry.
3. U.S. fastener manufacturers, at the request of our govern-
ment, have cooperated with Fastener Study Teams from
Japan. Please study Exhibit VII from the Fasteners Insti-
tute of Japan. Quoting from this statement - "Fastener
Industry is now playing an important role in the improve-
ment of fasteners of balance of trade of Japan", and
"Importation of fasteners into Japan is limited to those
of special types and naturally the amount is very low."
4. For the year 1969, there is a U.S. deficit of trade with
Japan of $50,847,000. For the years 1964 through 1969,
there is a U.S. deficit of fastener trade with Japan of
$200,981,000. Please refer to Exhibit I.
PAGENO="0164"
3764
This is a substantial and growing trade deficit for the
U.S. with only one important trading partner. This trade
deficit with Japan is not caused by U.S. inefficiencies,
lack of innovation or development, low productivity, pro-
duct reliability or other factors but only by punitive non-
tariff barriers.
U.S. fastener manufacturers have more engineering documenta-
tion, work in more sophisticated areas with all metals and
some nonmetals than any other country, including Japan.
If it were not for Japanese trade, our world import/export
situation would be:
1969 Only
U.S. Exports (excludinq Japan) $66,704,000
U.S. Imports (excluding Japan) 45,254,000
U.S. Favorable Balance of Trade $21,450,000
In 1969, the U.S. was able to meet world competition with
a variety of national nontariff barriers because of superior
product and strong export marketing effort.
Excluding Japan for 1969, the U.S. would have had a favorable
fastener balance of trade of $21,450,000.
With the unfavorable balance with Japan of $50,847,000, our
total net advantage was wiped out and a world deficit of
$29,397,000 resulted.
PAGENO="0165"
3765
These figures show a strong effective export capability by
the U.S. blunted by unfair nontariff barriers by Japan.
The adverse results do not incorporate the disadvantage to
the U.S. of CIF/FOB differences.
5. It is a major goal and an urgent necessity for the U.S. to
increase exports and to secure a favorable balance of trade.
The Industrial Fasteners Institute supports the need to
increase exports.
If we achieve the stated goal of increasing exports to Japan
to $30 million, our industry will be doing its part to secure
an overall favorable U.S. balance of trade.
Japan can accept increased amounts of fastener imports from
the U.S.
Japan has unchallenged leadership world-wide in shipbuilding,
is second or third in automotive, in electronics, in cameras,
increasing machinery production, and is preparing to enter
prominently in the light jet aviation industry ... a major
U.S. export.
6. Indications lead us to believe that the voluntary Japanese
steel quotas will result in a shift of Japanese steel exports
to the U.S. from raw material to finished goods, such as
fasteners. This shift could rapidly widen the adverse bal-
ance of trade which is already unjustifiably high.
PAGENO="0166"
3766
U.S. markets, unlike foreign markets, do not have the anti-
competitive environment of cartels and ~rationalization
with the result that the full impact of this Japanese steel
conversion will be aimed primarily at the American market.
7. Our industry is in favor of Fair International Trade when
both partners are bound by the same rules. This is not the
situation in the case of fastener products which are virtually
excluded as imports in Japan bec~se of nontariff barriers,
and which are subject to little or no restriction as imported
product in the USA.
This position, based on growing unfavorable trends in fastener
trade between Japan and the USA, is best illustrated by the
statistical data and charts attached to this statement.
The U.S. Fastener Industry's overall position with reference to trade with Japan
can be summarized as follows: (1969 figures are used)
53.7% of total fastener imports to the U.S. are from Japan
and are valued at $52,551,584.
2.4% of total fastener exports from the U.S. are to Japan
and are valued at $1,705,000.
o Our industry knows the necessity to export, has the capability
to export and both the strength and desire to increase exports.
o We favor international trade and a reasonable and equitable
sharing of U.S. markets.
PAGENO="0167"
3767
o Our industry record for exports, excluding Japan, is good.
o There is a net minimum loss of 2,500 U.S. jobs in our fas-
tener trade with Japan.
o The relationship of our industry with Japan does not repre-
sent Fair International Trade.
o Most economic factors now are distorted by stress caused by
the war. It is unrealistic to measure imports and their
impact on the economy as though all economic factors in the
U.S. were now normal. Action is needed now to provide jobs
and opportunities to the whole U.S. work force and especially
for our military men returning to civilian life.
We appreciate this opportunity to present the views of our industry to members of
the Ways and Means Committee of the House of Representatives in support of govern-
ment action to encourage Fair International Trade.
PAGENO="0168"
Total Imports to U.S.
From All Countires
$ 34,793,000
51,313,000
59,769,000
70,334,000
78,232,000
97,806,000
$392,247 ,000
Imports to U.S.
From Japan
$17,221,000
28,075,000
32,220,000
36,538,000
38,755,000
52,552,000
$205,361 ,000
Total Imports to U.S.
Excluding Japan
1964-1969
$186,886,000
Total Exports from U.S.
To All Countries
$ 29,223,000
36,614,000
49,307,000
55,826,000
63,377 ,000
68,409,000
$302,756,000
Exports to Japan
From U.S.
$ 217,000
285,000
387,000
785,000
1,001,000
1,705,000
$ 4,380,000
Total Exports from U.S.
Excluding Japan
1964-1969
$298,376,000
U.S. Deficit
Balance of Trade
$ 5,570,000
14,699 ,000
10,462,000
14,508,000
14,855,000
29,397,000
$ 89,491,000
U.S. Deficit Balance of
Trade With Japan
$ 17,004,000
27,790,000
31,833,000
35,753,000
37,754,000
50,847,000
$ 200,981,000
U.S. Favorable
Balance of Trade
Excluding Japan
$111,490,000
In this 6-year period the Japan Fastener Industry created a deficit balance of
trade for the USA of $200,981,000.
In the same 6-year period, excluding Japan, the U.S. Fastener Industry produced
a favorable balance of trade for the USA of $111,490,000.
Again, in the same 6-year period, including Japan:
Total U.S. fastener exports were $302,756,000
Total U.S. fastener imports were 392,247,000
Unfavorable U.S. Balance of Trade $ 89,491,000
3768
Exhibit I
UNITED STATES - JAPAN TRADE
1964-1969
The U.S. Government changed its statistical-gathering formulas beginning with
the year 1964. We, therefore, have a current precise set of statistical data
for industrial fasteners from 1964 through 1969. These data are:
1964
1965
1966
1967
1968
1969
1964
1965
1966
1967
- 1968
1969
Prepared by:
Industrial Fasteners Institute
.1505 East Ohio Building
Cleveland, Ohio 44114
PAGENO="0169"
3769
Exhibit II
TOTAL FASTENER IMPORTS TO THE UNITED STATES
TOTAL FASTENER IMPORTS FROM JAPAN
1969
TSUSA No.
~
Product Description
"
Total
U.S. Imports
$
Imports From %
Japan $ of Total
`Imports
%
From Japan
646 5600
Nuts Iron & Steel
32 192 803
18 662 476 32 8
58 0
646,5400
Bolts & Bolts & Their Nuts:Iron & Steel
16,033,733
8,813,704 16.4
55.0
646,6320
Cap Screws) 0.24 : Iron & Steel `
11,064,133
5,923,59811.3.
53.6
646,6040
Iron & Steel Screws Not Elsewhere
Described ~ 0.24'
Machine Screws? 0.375" length
6,217,727
, 5,123,206 6.3
`
82.3
646,5800
0.125" diameter: Iron & Steel
5,740,879
5,444,494 5.8
94.7
646,4940
Other Wood Screws of Iron & Steel
Iron & Steel Screws Not Elsewhere
4,131,839
`2,002,675 4.2
48.5
646,6340
Described >0.24"
3,253,162
1,329,440 3.3
40.8
646,4100
Other Rivets of Base Metal
Canadian Article & Original Motor-
1,463,253
218,237 1.5
14.8
646,7900
Vehicle Equipment
5,504,000
5.5
646,5700
Iron & Steel Studs and Studding `
`2,615,176
151,939 2.7
5.8
646,7000
Other Washers: Iron & Steel `
Spiral and Other Lock Washers:
1,606,048
600,771 1.6
37.4
646,6500
`
Iron & Steel `
Screw Eyes, Hooks, Rings, Turn
1,229,355
965,226 1.2
78.5
646,7200
Buckles: Iron & Steel ,
1,056,780
752,253 1.7
71.1
646,7400
646,4920
Muntz or Yellow Bolts `
Lag Screws or Bolts of Iron or Steel
682,523
1,152,243
156,404 0.7
l,D63,460 1.2
22.9
92.1
646,7500
Bolts, Nuts, Screws, Washers Having
Holes, Shanks ~O.24" Not Iron or Steel
Bolts, Nuts, Screws, Washers Having
775,236
308,874 0.7
51.3
646,7600
Holes, Shanks > .24" Not Iron or Steel
396,793
170,594 0.4
43.1
646,6020
Cap Screws 0.24" : Iron & Steel ,
846,043
191,250 0.85
22.6
646,4200
Cotters, Pins & Holders of all Materials
766,032
339,687 0.77
44.2
646,5300
Wood Screws) 0.12' Not of Iron or Steel
Screw Eyes, Hooks, Rings, Turn
426,320
92,056 0.43
21.6
646,7800
Buckles of All Materials
247,163
66,509 0.25
26.9
646,4000
Rivets of Iron & Steel Not Machined
299,781
51,991 0.30
17.3
646,5100
Wood Screws ~- 0.12' Not of Iron & Steel
45,324
23,183 0.04
51.0
646,7700
Studs & Studding of all Materials
TOTALS I
60,017
$97,806,363
9,562 0.06
$52,551,589 100.0
15.9
53.7
Prepared by:
Industrial Fasteners Institute
1505 East Ohio Building
Cleveland, Ohio 44114
46-127 0 - 70 - pt. 13 - 11
PAGENO="0170"
3770
Exhibit III
TOTAL FASTEHER IMPORTS TO THE UNITED STATES
TOTAL FASTENER IMPORTS FROM JAPAM
1968
Total Imports From %
TSUSA No. Product Description U.S. Imports Japan $ of Total From Japan
$ Imports
_________ 13,783,319 53.0
_________ 7,184,554 47.0
________ 3,914,375 51.0
_________ 3,037,095 73.0
_________ 4,185,092 95.0
________ 1,759,132 54.0
________ 1,097,637 39.0
258,244 16.0
Nuts: Iron & Steel 25,808,423 33.0
Bolts & Bolts & Their Nuts:Iron & Steel 15,274,581
Cap Screws > 0.24 : Iron & Steel 7,682,878
Iron & Steel Screws Not Elsewhere
Described ~0.24" 4,138,219 5.3
Machine Screws ~ 0.375 length
> 0.125 diameter: Iron & Steel 4,393,779 5.6
Other Wood Screws of Iron & Steel 3,243,653
Iron & Steel Screws Not Elsewhere
Described >0.24' 2,797,890 3.6
Other Rivets of Base Metal 1,656,411
Canadian Article & Original Motor-
Vehicle Equipment 4,376,230 5.6
Iron & Steel Studs and Studding 1,625,705 71,482 2.1
Other Washers: Iron & Steel 1,304,308 342,457 2.1
Spiral and Other Lock Washers:
Iron & Steel 976,099 745,053 1.2
Screw Eyes, Hooks, Rings, Turn
Buckles: Iron & Steel 641,144 422,197 0.8
Muntz or Yellow Bolts 713,791 149,164 0.9
Lag Screws or Bolts of Iron or Steel 750,142 700,990 0.9
Bolts, Nuts, Screws, Washers Having
Holes, Shanks ~ 0.24 Not Iron or Steel 616,885 269,835 0.8
8~its, Nuts, Screws, Washers Having
Holes, Shanks ? .24" Not Iron or Steel 451,741 173,827 0.6
Cap Screws S0.24' : Iron & Steel 640,126 77,167 0.8
Cotters, Pins & Holders of all Materials 422,407 323,064 0.5
Wood Screws ~O.l2' Not of Iron or Steel 409,667 90,548 O~T
Screw Eyes, Hooks, Rings, Turn
Buckles of All Materials 103,681 77,751 0.1
- Rivets of Iron & Steel Not Machined 120,703 58,180 0.15
Wood Screws f- 0.12' Not of Iron & Steel 53,571 29,846 0.02
Studs & Studdina of all Materials 29,548 4,279 0T0T
TOTALS 78,231,582 38,755,288 100.0 49.5
Prepared by:
Industrial Fasteners Institute
1505 East Ohio Building
Cleveland, Ohio 44114
646 ,5600
646,5400
646,6320
646.6040
646,5800
646,4940
646,6340
646,4100
646,7900
646,5700
646,7000
646 ,6500
&46 ,7200
646 ,7400
646,4920
646,7500
646,7600
646,6020
646 ,4200
~4~6,5300
646 ,7800
646,4000
646,5100
646 ,77111)
b.U
76.0
66.0
~TO
44.0
38.0
75.0
14.0
PAGENO="0171"
SUMMARY OF IMPORTS FROM JAPAF 1964-1969
Exhibit IV
Prepared by:
Industrial Fasteners Institute
1505 East Ohio Building
Cleveland, Ohio 44114
% FROM JAPAN
DOLLAR VALUE FROM JAPAN
TSUSANo. Product Description
1964 1965 1966 1967 1968 1969
1964 1965 1966 1967 1968 1969
646,5600 Nuts: Iron & Steel
42.6 50.1 56 53.9 53 58
5,202,072 10,389,278 13,001 ,986 14,198,761 13,783,319 18,662,476
646,5400 Bolts, Bolts & Their Nuts:Iron & Steel
55.3 54.6 49 47.7 47 55
4,860,83l 6,469,168 5,680,209 7,213,594 7,184,554 8,813,704
646,6320 Cap S~~ws> 0.25 : Iron & Steel
64.4 68.2 75.5 66.9 51 53.6
1,448,975 2,491,931 3,279,305 3,970,597 3,914,375 5,923,598
Iron & Steel Screws Not Elsewhere
646,6040 Described~0.25'
-
46.6 67.1 67.6 70.1 73 82.3
386,127 952,971 1,748,248 2,411,806 3,037,095 5,123,206
Machine Screws ? 0.375 length
646,5800 ~` 0.125' diameter: Iron & Steel
39 93.4 93.6 91.7 95 94.7
1,778,255 3,152,500 3,055,539 2,778,611 4,185,092 5,444,494
646,4940 Other Wood Screws of Iron c~~eT
60.6 55.6 57.4 59.3 54 48.5
1,475,224 1,575,444 1,662,370 1,301,854 1,759,132 2,002,675
Iron & Steel Screws Not Elsewhere
646,6340 Described > 0.25"
23.2 34.1 37.5 36.3 39 40.8
233,362 365,490 616,296 792,524 1,097,637 1,329,440
Spiral and Other Lock Washers:
646,6500 - Iron & Steel -~ -
68.4 75 84.6 83.7 76- -78.5-
- 322,216- -- 447,164 -- 711,004 ----- 757,300 745,053 965,226
Screw Eyes, Hooks, Rings, Turn
646,7200 Buckles: Iron & Steel
52 83.9 84.9 78.5 66 71.1
136,702 313,677 490,915 671 .738 422,197
64 4920 [~Screws or Bolts of Iron or Steel
95 96.5 93.4 98 93 92.T
543,319 735,923 521,364 726,100 700,990 1,063,460
Bolts, Nuts, Screws, Washers Having
646,7500 Holes, Shanks~O.25" Not Iron or Steel
43.3 54.3 44.6 50.3 44 51.3
-
173,907 200,987 227,206 315,403 269,835 398,874
Bol ts, Nuts, Screws, Washers Having
646,7600 Holes, Shanks , .25' Not Iron or Steel
29.3 49.1 42.3 41.6 38 43.1
84,528 124,964 132,543 195,708 173,827 170,594
Cotters, Pins & Holders of all
646 ,4200 Materials
44.8 63.2 75.5 61.4 76 44.2
68,779 128,107 220,895 202,379 323,064 339,687
Screw Eyes, Hooks, Rings, Turn
646,7800 Buckles of all Materials
33.2 64.6 71 70.7 75 26.9
10,116 31,630 34,056 69,387 77,751 66,509
646,4000 Rivets of Iron & Steel Not Machined
41.1 54.5 49.9 52 48 17.3
22,652 31,698 35,055 45,244 58,180 51,991
646,5100 Wood Screws~0.l2' Not of Iron & Steel
28.2 32.1 49.7 41.4 56 51
13,305 27,368 31,343 28,685 29,846 23,183
All Other Products
15.7 17.5 11.1 10.9 9.4 2.7
460,362 636,794 771,811 858,624 993,341 1,420,219
Total percent from Japan
for all products
49.5 54.7 62.7 51.9 49.5 53.7
17,220,732 28,075,094 32,220,145 36,538,315 38,755,288 52,551,589
752.253
PAGENO="0172"
SUMMARY OF IMPORTS FROM JAPAN 1964-1969 (continued)
Prepared by:
Industrial Fasteners Institute
1505 East Ohio Building
Cleveland, Ohio 44114
% INCREASE FROM YEAR TO YEAR
BASED ON DOLLAR VOLUME
INCREASE FROM
DOLLAR VOLUME FROM JAPAN 1964 to 1969
TSUSA No. Product Description
1964 1965 1966 1967 1968 1969
1964 1969 $
646,5600 Nuts: Iron & Steel
- 99.5 25.2 9.2 - 2.9 35.4
5,202,072 18,662,476 $13,460,404 258
646,5400 Bolts & Bolts & Their Nuts: Iron & S88r
- 33.1 -12.2 27 - .4 22.7
4,860 831 8,813,704 3,962,873 81 .2
646,6320 Cap Screws >0.25" : Iron & Steel
- 72.1 31.6 21.1 -l.4 51.4
1,448,975 5,923,598 4,474,623 309
Iron & Steel Screws Not Elsewhere
646 ,604O Described ~ 0.25"
- 147 83.7 37.9 26 68.7
-
386,127 5,123,206 4,737,079 1250
Machine Screws 0.315 length
646,5800 2' 0.125" diameter: Iron & Steel
- 77.4 - 3.1 - 9.1 50.7 30.0
1,778,255 5,444,494 3,666,239 206
646,4940 Other Wood Screws of Iron & Steel
Iron & Steel Screws Not Elsewhere
646,6340 Described ->0.25"
- 6.8 5.5 -21.7 35.1 13.8
-
- 56.7 68.5 28.6 38.5 21.1
1,475,224 2,002,675 527,451 35.7
.
233,362 1,329,440 1,096,078 470
Spiral and Other Lock Washers:
646,6500 Iron & Steel
-
- 38.8 59 6.5 - 1.6 29.5
322,216 965,226 643,010 200
Screw Eyes, Hooks, Rings, Turn
646,7200 Buckles: Iron & Steel
- 130 56.5 36.8 -37.1 78.2
.
136,702 752,253 615,551 450
646,4920 Lag Screws or Bolts of Iron or Steel
- 35.5' -29.2 39.3 - 3.5 51.6
543,319 1,063,460 520,141 96
Bolts, Nuts, Screws, Washers Having
646,7500 Holes, Shanks ~ 0.25" Not Iron or Steel
Bolts, Nuts, Screws, Washers Having
646,7600 Holes, Shanks > .25" Not Iron or Steel
- 15.5 12.9 38.8 -14.5 47.9
- 47.4 6 47.7 -11.2 - 1.9
.
173,907 398,874 224,967 129
.
84,528 170,594 86,066 102
646,4200 Cotters, Pins & Holders of all Materials
- 86 72.5 - 8.4 59.7 5.3
68,779 339,687 270,9U8 394
Screw Eyes, Hooks, Rings, Turn
646,7800 Buckles of all Materials
- 213 7.6 104 12.1 -14.4
-
,
10,116 66,509 56,393 555
646,4000 Rivets of Iron & Steel Not Machined
- 39.7 10.4 29.1 28.8 -10.6
22,652 51,991 29,339 129
646,5100 Wood Screws~ 0.12" Not of Iron & Steel
- 106 14.7 - 8.3
4.1 -22.3
13,305 23,183 9,878 74
All Other Products
-
,
- 38.3 21.3 11.3 15.7 43.0
460,362 1,420,219 959,857 208
-
Total percent from Japan
- for all products
- +63 +14.7 +13.4 + 6.05 - 35.5
`
17,220,732 52,551 ,589 $35,330,857 205%
PAGENO="0173"
3773
Exhibit V
INDUSTRIAL
FASTENERS
* IN
JAPAN
1967
The Featonere InfltitUte of Japan
46-127 0 - 70 - pt. 13 - 12
PAGENO="0174"
3774
The Industrial Fasteners Institute has for years cooperated with our counter-
parts - The Fasteners Institute of Japan.
Here is a quote from the `Preface" of INDUSTRIAL FASTENERS IN JAPAN, 1967
prepared by the Fasteners Institute of Japan:
"Fastener Industry in Japan has made a rapid and remarkable pro-
gress during the last several years. Both quality and precision
in production techniques and mass productivity by specialized
method are attained as the result of this progress.
"In 1959, the first, in 1964, the second, and in 1965, the third
Small Business Industrial Fasteners Study Teams visited fasteners
manufacturing industry in the United States of America.* As the
result of their active efforts towards the improvement of fas-
teners industry in Japan, upon their return from this inspection
tour, a great deal of improvement in the establishment of effi-
cient machines and the production management was brought about.
The designation of the fasteners industry by the Government as
as important item involved in the Machine Industry Development
Provisional Measure Law also encouraged the modernization and
the rationalization of the industry.
"In accordance with the rapid growth of economic power in Japan,
demands for fasteners and investments on the business have
shown a great increase, and the fasteners production has
expanded to such a big scale as we see today."
(The Industrial Fasteners Institute cooperated
with the U.S. Department of Coriuiierce and the
U.S. State Department in working cooperatively
with five Study Groups from Japan.)
* The fourth visit to U.S.A. was in 1967 and their fifth visit to the Industrial
Fasteners Institute was May, 1969.
Quoting from the same 1967 Annual Report under "Production":
"Fastener industry has expanded year after year through the intro-
duction of mass production system. High economic growth of Japan,
expansion of capital investment and mechanization of heavy indus-
try created an increased demand for fasteners and naturally the
production also showed a great increase. The development of machine
industry since 1956 has made the fastener industry all the more
important and the industry is now required to improve the quality
of its production so as to help to maintain the precision and
efficiency of machine industry.
PAGENO="0175"
377*5
"Continuous efforts exerted by the fastener industry to meet this
requirement through rationalization and modernization of enter-
prises with the cooperation of the Government under the Law for
Machine Industry DevelopmentTemporary Measures, and importation
of highly advanced machines from Europe and America have now
resulted in improvement of both quality and quantity of production."
Quoting from same 1967 Annual Report "Present Condition of facilities In
Fasteners Industry":.
"This means that we are determined to perform our duties and
responsibilities to the international comity of nations. In
order to contribute towards prosperity of the world, it is
absolutely necessary for us to endeavour ourselves to improve
our own industries by means of rationalization, modernization
of enterprises and readjustment of distribution system of manu-
factured goods."
(IFI note): We understand the word "rationalization" in Japan means a govern-
ment approved monopoly - cartel - government assistance to increase exports
and protect domestic imports and a pricing system acceptable in Japan and not
acceptable under the laws of the U.S~.
"Rationalization" is a potent nontariff trade barrier.
Quoting from same 1967 Annual Report "Standardization":
"Industrial standardization (as well as rationalization and high
productivity) played an important role in rehabilization of
Japanese economy after the end of World War II."
Quoting from Section 6 of same report under "Export and Import"
"Export of fasteners increasedgradually keeping abreast of the
remarkable progress of rationalization and modernization of fas-
teners industry.
"The liberalization of foreign trade, set out by the J~panese
Government helped by its poliçy for encouragement of export,
gives way for increased outflow of fasteners products to
foreign countries.
"Fasteners industry is now playing an important role in the
improvement of fasteners of balance of trade of Japan
PAGENO="0176"
3776
`The fasteners Institute of Japan have been exerting efforts for the
the orderly increase of fasteners exports through the cooperation of
the government and fasteners industrialists of the importing countries.
`Importation of fasteners into Japan is limited to those of special
type and naturally the amount is very low.'
PAGENO="0177"
3777
Exhibit VI
SUMMARY OF FOREIGN TRADE WITH JAPAN
Industrial Fasteners Institute
I. Domestic Japanese Fastener Production
In 1961, Japanese fastener shipments* were $110,000,000. By 1966,
these shipments had grown to $240,000,000 or an average annual
increase of approximately 17% in the dollar value of shipments.
It is estimated that in 1968 Japanese fastener shipments reached
$328,000,000. These shipments were produced by 3,634 firms
employing a minimum of 77,560 employees. The vast majority of
these companies employ less than fifty persons and only nine
employ over three hundred. These figures reflect average annual
shipments in Japan of $4,000 or less per employee. This compares
with United States production of approximately $27,000 per employee.
II. Japanese Exports to the United States
Japan exports approximately 20~ of its total domestic production.
68% of all Japanese exports reach the United States. Approximately
14% of the total domestic production is exported to the United
States. In 1969, exports from Japan to the United States were at
a level of $52,550,000 (FOB Value). These exports to the U.S. had
an average value of 23~ per pound. The following table reflects
values for bolts, nuts, and wood screws imported from Japan during
1969:
Weight or ~uantity
Average
Value
Bolts
7,185,000
66,651,000
lbs.
l0.8~
per
lb.
Nuts
13,786,000
63,302,000
lbs.
2l.8~
per
lb.
Wood Screws 2,460,000
12,031,000
gross
20.5~
per
gross
III. Exports by the United States toJapan
In 1969, the United States exported $1,705,000 of product to Japan.
This results in a trade deficitwith Japan of approximately $50,847,000
during 1969. For each dollar received by United States fastener manu-
facturers, Japanese fastener manufacturers received $30 based on this
trade deficit. In terms of domestic production, United States manu-
facturers exported to Japan less than .11% of domestic shipments; thus,
in terms of percent of domestic production exported, the Japanese
enjoyed a 127 to 1 advantage.
IV. Job Loss
The Bureau of Labor Statistics estimated in 1965 that 91,000 workers
were required for each $1,000,000,000 of goods exported. 54% of these
workers were considered primary workers and 46% indirect. Using these
yard sticks, our industry lost 3,000 production jobs to imports during
1969. This represents approximately a 5% decline in the U.S. Labor
Force employed in fastener manufacturing operations.
* Shipments means Japanese domestic production including exports.
PAGENO="0178"
3778
Industrial Fasteners Institute
V. Traffic Cost
The Far East Ocean Shipping Conference rates are as follows:
A. Tokyo to New York -- $33.00 per net ton.
B. Tokyo to Great Lakes Shipping ports -- $35.75 per
net ton or $33.50 per net ton on pallets.
C. Tokyo to West Coast ports -- $28.00 per net ton.
The above figures are those rates published by the Far East
Ocean Shipping Conference and do not reflect subsidies pro-
vided by the Japanese Government. Japanese imports average
$316 per net ton; thus, the following factors can be used to
calculate shipping cost:
A. Add 10.4% to FOB Values for product entering New York
ports.
B. Add 11.3% to product entering at Great Lakes ports.
C. Add 8.9% to product entering West Coast ports.
In general terms, this would add an additional $5,250,000 to
the $52,552,000 imported into the United States during 1969 to
yield an equivalent CIF Value of imports totaling $57,802,000.
VI. Legislation
In 1949, Japan enacted the Industrial Standardization law to
support the standardization of the industry as a whole, and
Japanese Industrial Standards were set up in conformity with
this law with the object of raising production efficiency,
lowering cost, and improving quality of product. The symbol,
JIS, on product indicates quality product guaranteed by the
Japanese government.
Exported product is subject to standards specified in the Export
Control Law. Product designated for export must go through
the inspection of the Japanese Machines and Metals Inspection
Institute, which is the government approved inspection organi-
zation. Only products which pass this inspection are authorized
for export.
VII. Consumers of Industrial Fasteners in Japan
The four largest single consumers of Japanese fastener shipments
are:
1. Automotive - 36%
2. Electrical Instruments (probably including appliances) - 14%
3. Wholesalers (use unknown) - 13%
4. Aircraft Industry - 5%
PAGENO="0179"
3779
Industrial Fasteners Institute
VIII. Valuation of Exports 1956-1963
In 1956, Japan exported 15,173 metric tons having an FOB Value
of $5,030,000. This reduces to about l8.4~ per pound. In 1963,
Japan exported 69,212 metric tons having a value of $19,924,000.
This has a value of approximately l5.9~ per pound. These figures
reflect a drop of 2.5~ per pound of exported product for the
period.
IX. Advanced Mechanical Fasteners
In 1964, Japan produced 28,300 metric tons valued at $15,800,000
having a value of approximately 3l~ per pound. In the same year
United States exports to Japan were 90~ per pound. The commence-
ment of Domestic Production in 1962 of the F 104 jet fighters
under United States license has been the major cause for increased
fastener imports into Japan. It is estimated that nearly 70% of
the imported fasteners are consumed by the Aircraft Industry, for
both domestic manufacture and, repair of aircraft owned by air-
lines, and planes maintained by the United States Air Force in
Japan.
Prepared by:
Industrial Fasteners Institute
1505 East Ohio Building
Cleveland, Ohio 44114
PAGENO="0180"
TABLE I
DOMESTIC PRODUCTION
of
INDUSTRIAL FASTENERS IN JAPAN
Product
$
1961
$
1962
$
1963
$
1964
$
1965
$
1966
Bolts
55,300,000
64,400,000
-
78,408,000
95,733,000
113,316,000
124,638,000
Nuts
29,400,000
30,300,000
31,622,000
39,383,000
46,902,000
56,277,000
-
lachine Screws
22,300,000
25,500,000
29,047,000
34~86l,OOO
41,166,000
53,513,000
Iood Screws
2,900,000
3,600,000
-
3,950,000
6)838,000
6,755,000
5,526,000
OTAL $
109,900,000
123,800,000
143,027,000
176,815)000
-
208,139,000
239,954,000
(Table I continued)
Average growth rate
Production in Japan
is 16.96% annually;
mated that in 1967,
$280,554,000 and in
of $328,154,000.
of Domestic Fastener
for the period 1961-1966
therefore, it is esti-
Domestic Production was
1968 it reached a level
Prepared by:
Industrial Fasteners Institute
1505 East Ohio Building
Cleveland, Ohio 44114
Product
$
1966
1966
Exports
To U.S.A.
% of
Dom. Prod.
olts
124,638,000
6,328,433
5,687 ,723
2,399 ,595
14,415,751
11.6
uts
56,277,000
13,002,000
23.2
achine Screws
53,513,000
3,055,539
-
5.7
ood Screws
5,526,000
-
1,746,710
31.6
OTAL $
239,954,000
32,220,000
13.5
PAGENO="0181"
EXPORTS OF INDUSTRIAL FASTENERS
BY JAPAN TO WORLD
AND
PERCENTAPES OF DOMESTIC PRODUCTION
(FOB Values)
TABLE II
Product
$_~ports
%of
Dom. Prod.
$
T~3T
%of
Bolts Nuts
9,100,000
10.7
Exports
Dom. Prod.
$ Exports
Dom. Prod.
tlachine Screws
2,000,000
6.8
13,800,000
14.6
17,506,000
15.9
Wood Screws
1,300,000
45.0
2,100,000 8.2
2,036,000
6.8
TOTAL$EXPORTS
12,400,000
11.3
1,500,000 41.7
17,400,000 14.1
1,630,000 40.0
21,172,000 14.7
(TABLE II continued)
~
% of % of~
Product $~ports Dom. Prod.
Bolts Nuts
22,349,000
16.5
Exports
Dorn. Prod.
$ E~ports
Dom. Prod.
Machine Screws
4,252,000
12.2
19.2
36,977,000
20.4
ood Screws
2,072,000
-
45.4
9,079,000
22.1
7,945,000
14.8
OTAL$ EXPORTS 128,673,000
16.4
2,461 ,000
36.4 -~
2,155,000
39.0
:~
Assuming 1967 and 1968 Japanese Fastener Exports are at a level equal
$56,000,000 and 1968 were $65,000,000.
Prepared by~
Industrial Fasteners Institute
1505 East Ohio Building
Cleveland, Ohio 44114
to 20% of Domestic Production; Exports for 1967 were
PAGENO="0182"
TABLE III
SU~1F4ARY
OF
DO~1ESTIC PRODUCTION AND EXPORT
OF
INDUSTRIAL FASTENERS FROM JAPAN
1961 1962 1963 1964 1965 1966
lotal Japanese $
Domestic Production
109,900,000
123,800,000
143
,027,000
176
,815,000
208,139,000
239,954,000
Total Japanese
World
12,400,000
17,400,000
21
,172,000
28
,673,000
42,277,000
47,077,000
% of Exports
To Total Production
11.3
14.1
14.7
16.4
20.3
19.6
Total Japanese
E~p9r1sto U.S.A.
6,316,000
10,914,000
13
,263,000
17
,220,000 -
28,075,000
32,220,000
% of Total Japanese
Exports to U.S.A.
49.0
62.8
44.8
50.9
66.5
68.3
otal Japanese Exports
To U.S.A. as a % of
)omestic Japanese Production 5.7
8.8
9.3
9.8
13.5
13.5
United States imports from Japan in 1967 were $36,538,000 or 13% of total Domestic Production.
In 1968, total United States imports from Japan were $37,630,000 or an estimated 12% of Domestic Production.
Prepared by:
Industrial Fasteners Institute
1505 East Ohio Building
Cleveland, Ohio 44114
PAGENO="0183"
Exhibit VII
FAIR INTERNATIONAL TRADE
USA - JAPAN
Net Trade Deficit,
Prepared by:
Industrial Fasteners Institute
1505 East Ohio Building
Cleveland, Ohio 44114
U.S.
- Japan 1953-1969
249 ,36O ,000
~783
A consideration of these statistics clearly illustrates
trends in fastener trade between Japan and the USA:
Total Domestic U.S.
Total Domestic U.S.
Production 1953 (SIC 3452)
Production 1969 (
Increase 1969 vs. 1953
Increase 1969 vs. 1953
the year 1953
the year 1969
1969 vs. 1953
1969 vs. 1953
U.S. Exports to Japan for
U.S. Exports to Japan for
Increase
Increase
the growing unfavorable
$ 826,939,000
$ 1,752,469,000
$ 925,530,000
% 112
$ 151,000
$ 1,705,000
$ 1,554,000
% 1,029
$ 478,000
$ 52,551,000
$ 52,074,000
% 10,892
$ 254,456,000
$ 5,096,000
U.S. Imports from Japan for
U.S. Imports from Japan for
Increase
Increase
Total U.S. Imports from Japan
the year 1953
the year 1969
1969 vs. 1953
1969 vs. 1953
for the years
1953 thru 1969
Total U.S. Exports to Japan for the years
1953 thru 1969
PAGENO="0184"
TOTALS lO854,767,000 004,322,000 533,220,000 254,456,000 5,006,000
S Increase
1953-1969 925,030,800 02,544,000 93,330,000 02,074,000 1 554,000
Increase
1953-1969 112 331 2,005 10,892
TOTAL TRADE DEFICIT WITH JAPAN 1953-1069 (IMPORTS TO U.S. 111305 EXPORTS TO JAPAN) IS $249,360,000.
1. Includes all product reported in SIC 3402, Census of Manufactures.
2. U.S. eoport values are taken from U.S. Department of Commerce report FT 410. The valuation is the value at the
seaport border point or airport of evportation. Valuation is based on the selling price and includes inland
freight, insurance, and other charnes to the point of evportation. Product lines included are similar to those
included in import totals (refer to 3).
3. U.S. import values are taken frcm U.S. Department of Commerce reports FT 110 and FT 246. The dollar value shoan
is defined generally as the market value in the foreign country and therefore, evclsdes U.S. import duties, freight
charges from the foreign country to the U.S., and insurance. Products includes all TSUSA numbers shown in 1968
summary attached.
4. Independent research firms have estimated that nearly 70 percent of the presently imported fasteners in Japan are
consumed by the aircraft industry for both domestic manufacturer and repair for the crafts of air lines as yell as
U.S. Air Force in Japan.
Prepared by:
Industrial Fasteners Institute
1505 East Ohio Building
Cleveland, Ohio 44114
3784
SUMMARY OF UNITED STATES DOMESTIC FASTENER PRODUCTION
AND IMPORTS - EOPORTS
II]CLODINP TRADE 11TH JAPAN 1953-1069
Evhibit VIII
U.S.]
Domestic Production
S
Total 2
U.S. Evports
S
Total3
U.S. Imports
S
U.S. Imports
from Japan
S
3 of
Total Imports
from Japan
U.S. Evports4
to Japan
S
of
Total Evports
to Japan
1953
026,939,000
15,865,003
4,476,003
478,000
10.6
151,000
0.9
1954
706,392,000
12,513,033
4,073,000
592,000
12.6
18,800
0.1
1955
950,681,800
16,975,000
6,732,000
1,843,000
24.5
33,000
0.2
1956
940,897,800
19,509,003
8,578,000
2,109,000
24.6
54,000
8.3
1957
954,454,003
19,849,000
9,732,000
1,723,000
17.7
62,000
0.3
1958
859,446,000
16,490,000
10,316,000
2,376,000
22.9
57,000
0.3
1959
l,80l,2l8,00U
17,254,000
17,794,000
5,033,800
28.6
52,000
0.3
1960
1,805,919,000
17,748,800
17,494,000
5,725,000
32.7
18,000
U.l
1961
969,612,000
18,838,000
15,241,000
5,665,880
37.1
78,000
8.3
1962
1,113,788,808
21,431,800
23,235,000
10,438,000
44.8
180,880
0.4
1963
1,175,719,800
25,594,000
22,707,000
13,263,030
58.4
181,000
8.3
1964
1,288,615,000
29,223,000
33,793.000
17,221,000
49.6
217,000
8.7
1965
1,434,514,000
36,614,000
51,313,000
28,075,800
54.7
285,000
0.8
1966
1,623,874,000
49,307,000
59,769,000
32,220,000
54.0
387008
0.7
1967
l,Sll,575,UUO
55,826,000
70,334,000
36,530,808
52.0
785,009
1.4
1968
1,659,535,000
63,377,000
78,232,000
38,750,000
49.5
1 001 800
1.6
1969
1,752,469,008
O$,4Q9,000
93,.5a6,o.o.LL
52,552,008
53.7
1.785,800
2.4
1 029
PAGENO="0185"
3785
Statement
of the
Industrial Fasteners Institute
OBJECTIVE
The Industrial Fasteners Institute is in favor of international trade - the free
flow of goods in international commerce. The U. S. has made many
contributions to attain this objective. However, there do exist foreign
nontariff trade barriers as well as tariff restraints which prevent a fair and
equitable exchange of goods for U. S. manufacturers.
Our objective, then, is the eliminatiori of foreign nontariff trade barriers and
an equitable tariff schedule so that U. S. manufacturers can operate on the
same basis as foreign manufacturers.
To maintain U. S. sales, and jobs affecting the hardcore unemployed, it is
crucial that foreign nontariff trade barriers be eliminated and tariff schedules
be equalized.
The alternative to reciprocal fairness is unhealthy for the industry as well as
for employment in the U. S. - manufacturers of fasteners may be
increasingly forced to move their operations abroad to take advantage of
lower wage costs and to avoid the trade and tariff barriers inimical to U. S.
manufacturers.
if it is not possible to eliminate punitive foreign tariff and nontariff trade
barriers, we strongly favor exploring the use of countervailing duties on a
country-by-country basis and, in addition, as a less desirable but necessary
alternative, the creation of export incentives for U. S. manufacturers that are
equal to the deterrents imposed by foreign countries.
PAGENO="0186"
3786
PURPOSES
The Industrial Fasteners Institute (IFI - an
Association of manufacturers in the U.S.) has
prepared this Statement in support of the
elimination of artificial trade barriers which
now substantially prevent export sales of
Standard fasteners. The purposes of this
Statement are:
(1) to place the fastener industry in sharp
focus- with reference to its importance to all
other manufacturing industries, the govern-
ment, and military establishments,
(2) to present the manufacturing and im-
port-export facts regarding fasteners,
* . . (3) to document the high tariff duties im-
posed on United States fastener exports and
the significant nontariff trade barriers that
face United States fastener exports,
(4) to explain that United States exports
are high-value special fasteners that do not
enter normal, competitive foreign market-
places,
* . . (5) to emphasize that the United States
market is as encouraging to imports as foreign
markets are discouraging to exports,
(6) to state what the consequences will be
if the present inequities in trade opportunities
continue, and
(7) to sugg~st that, if United States fasten-
er manufacturers were able to operate under
the same rules and conditions in exporting to
foreign countries that foreign manufacturers
operate under in exporting to the United
States, then U. S. exports of fasteners could
be substantially increased.
Foreign tariff and nontariff barriers are cumu-
latively preventing United States manufac-
turers of indu~trial fasteners from competing
fairly for export sales with foreign manufac-
turers overseas selling in their own markets, to
third countries, and to the United States.
One immediate result is a needless harmful
effect on the United States balance of trade.
On nontariff barriers alone, the President of
the United States has declared it national
policy to realize an improvement of $500
million to the trade surplus by international
consultation and new domestic legislation.
The export market sought to be opened to
United States manufactures is not only of
great significance to the expansion of the
fastener industry, but to the United States
balance of payments. The IFI believes that
exports could be expanded about 2Y2 times -
an increase of $135 to $140 million.
A second result of foreign trade barriers
higher than domestic tariffs is that imports
into the United States displace United States
sales without a reciprocally fair opportunity
to replace those sales in foreign markets.
Imports of standard fasteners at the low end
of the product line will continue to enter
United States commercial markets in quantity
and have an impact out of all proportion to
their reported dollar value. On the other
hand, United States manufacturers cannot
enter foreign commercial markets with stand-
ard fasteners and are limited to exporting
fasteners of special kinds that are not pro-
duced in foreign countries.
The volume of imports is increasing rapidly.
United States firms, if they are to malntain
their relative market share, must be able to
sell top-of-the-line fasteners with a higher
per-unit cost abroad. These higher-cost, more
specialized fasteners are the ones most subject
to cumulative tariffs and taxes.
PAGENO="0187"
3787
1. MANUFACTURING AND IMPORT-EXPORT FACTS
REGARDING FASTENERS
The annual United States production of fasteners' (in round numbers) is as follows:
Standard fasteners sold commercially $1 100,000,000
Special and proprietary fasteners sold commercially 500,000,000
Total sold commercially $1,600,000,000
Fasteners manufactured by companies who use them in assembly and
do not sell them commercially (estimated) 200,000,000
Total commercial production $1,800,000,000
More than two million fasteners of many well as in atomic submarines, helicopters,
sophisticated types are used in the production tanks, naval vessels, weapon systems, and all
of one United States Air Force Lockheed military hardware. Table I summarizes the
C-5A aircraft. Many sophisticated and com- 1967 import-export facts regarding ferrous
plex fasteners are used in other jet aircraft, as fasteners.
Table FASTENERS* IMPORT-EXPORT FACTS-~967 SUMMARY
(FERROUS NUTS, BOLTS, SCREWS, RIVETS, ETC.(
IMPORTS EXPORTS NET DIFFERENCE
TOTAL U.S. AVG. U.S. $ TOTAL U.S. AVG. U.S. $ IMPORTS VS EXPORTS
$ VALUE VALUE/lOS lb S VALUE VALUE/100Ib (U.S. $)
OTHERS TO U.S.
$ 64,520,000
$17.30
U.S. TO OTHERS
$ 55,000,000
$ 69.40
U.S. DEFICIT
$ 9,520,000
EEC TO U.S.
12,573,000
18.45
U.S. TO EEC
7,276,000
367.45
U.S. DEFICIT
5,297,000
JAPAN TO U.S.
35,457,000
16.45
U.S. TO JAPAN
785,000
168.65
U.S. DEFICIT
34,672,000
CANADA TO U.S.
6,615,000
20.05
U.S. TO CANADA99
32,663,000
U.S. GAIN
26,048,000
* S~C C*t*g*,y 3452 ~*p,~,*,t* f*,,*,*~ p~*d~ti~,, ~, U.S. T*~~ff S*h*d~~I* 6 p~. 3 (It*~~* 646.45-646.42
,*d ,.ith *,,~,, b&t,, m. lw, 646.49-646.78 ~ b~lo, u,
** C***d* ,*p,~,*,l, ,p**i*l ,iu&S,~, ~.hkh ul~*,*,,*,i*!ly f,** p*,,*g~ *1 f*,,***~,
~ 59% *1 U.S. f,,,t ~ p*,t* g* C*,d~.
The products listed bear SIC classification 3452 and include bolts, nuts, screws, studs, threaded rods, rivets, pins,
washers, and other headed or threaded mechanical fastening devices. In the Tariff Schedules of the United States,
they are covered in Schedule 6, Part 3, by Items 646.40 through 646.42 (rivets, cotters, fasteners used with screws,
bolts, etc.) and Items 646.49 through 646.78 (wood screws, bolts, nuts, studs, screws, and washers, etc.).
PAGENO="0188"
3788
It is important, throughout this Statement, to
know that the product mix for imports is
made of standard fasteners that are small in
size and unit value. Exports are an entirely
different product mix; they are special fasten-
ers involving exotic metals and configurations.
U. S. fasteners with high value per hundred
weight do not enter the foreign commercial
marketplaces to compete with foreign fasten-
ers but are special replacement parts for
machinery and vehicles originally made in the
U. S. or for use in foreign countries that do
not manufacture the advanced U. S. special
fastener.
Succeeding tables and illustrations in this
Statement show (1) the punitive use of tariff
and nontariff trade barriers to prevent fair
and reasonable competition by U. S. manufac-
turers of standard and other fasteners in
foreign markets and (2) the incentives given
by foreign governments to increase penetra-
tion of low-unit-cost fasteners in the U. S.
marketplace. Even if a country has no tariffs
or taxes against imports, the requirement to
have an import license for fasteners - as in
Japan - could and does effectively prevent
exports of fasteners to such a country.
In Figure 1, some of the known trade barriers
in the major countries to which American
manufacturers export are compared with the
duties that foreign manufacturers encounter
in the United States. Perhaps the most im-
portant conclusion that can be draivn from
this comparison is that the size of the barriers
alone has a chilling effect on the incentive of
U. S. manufacturers to enter the export
business, notwithstanding the domestic sales
that are being increasingly displaced by
imports.
Figure 1 also illustrates the major impact of a
number of policies discussed separately in this
Statement. It is shown that: (1) foreign tariffs
alone are a serious impediment to exports
from the United States; (2) many desirable
foreign markets impose taxes and other non-
tariff trade barriers, which, as applied to
United States exports, significantly add to the
economic and practical burden upon U. S.
fastener exports; and (3) the combined effect
of both tariff and nontariff burdens is severe
on a U. S. exporter manufacturer.
Figure 1 does not show (because the problems
cannot be readily quantified) that (I) the
U.S. exporter-manufacturer must also contend
with a variety of barriers other than tariff
duties and internal taxes, and (2) in third-
country markets, United States exporters
frequently must sell in competition with
export subsidies and other tax and financial
advantages not accorded to the United States
companies.
Removing trade barriers will not permit U. S.
manufacturers to compete in foreign markets
across the board. However, U. S. manufac-
turers can extend their sales of more sophisti-
cated, top-of-the-line fasteners or other fas-
teners that require specialized manufacturing
capabilities. The effect of such an extension
of sales would be the opportunity to replace
sales lost in the United States with other sales
abroad. The IFI's position is that, if the
nontariff and tariff trade restraints cannot be
substantially reduced, a system of export
incentives should be adopted so that U. S.
fastener manufacturers (among others) can
compete fairly in the markets of the world.2
If trade barriers are not reduced or if counter-
vailing export incentives, one alternative, are
not adopted, the U. S. Fastener industry must
move increasingly abroad. Only by such
action will the industry increase sales to
foreign markets and compete for sales to the
United States markets - but in so doing both
technology and jobs will also move abroad.
The remaining sections of this Statement
amplify the Institute's position and document
the unequal foreign trade burdens its mem-
bers encounter.
2 The Australian Government has recently decided to follow this course. A rebate of payroll taxes and of income
taxes to exporters will be made for money spent promoting export markets.
PAGENO="0189"
I-
z
U
a-
I-
z
U
0.
3789
Figure 1
TRADE BARRIERS AGAINST FERROUS FASTENERS
AVERAGE PERCENTAGES ASSESSED AGAINST VALUE
46-127 0 - 70 - pt. 13 - 13
~~77] NONTARIFF BARRIERS:
LaLLI~L1 Sates Taxes Added Value Taxes
Turnover Taxes Compensatory Taxes
Purchase Taxes Transmission Taxes
LICENSE REQUIRED TO IMPORT
fflflfl~ TARIFF BARRIERS:
LLLLUJJI Import Duty
See Table III footnote.
PAGENO="0190"
3790
2. HIGH TARIFF DUTIES IMPOSED
ON UNITED STATES FASTENER EXPORTS
United States manufacturers of industrial
fasteners desire to export to the European
Economic Community (EEC) countries, Great
Britain, and Japan. Although these countries
are not the only ones to which export sales
must be developed, they are the principal
markets to which this Statement can usefully
pertain.
Tariff duties in these markets impose a
substantial burden on the United States
exporter.3 Table II and Figure 2 illustrate the
burden in ad valorem equivalences that the
exporter must bear.
Table II summarizes duties and taxes, by type
of iron and steel fastener, imported into the
markets under study. The EEC tariff duties
range from 8 through 12 percent now and will
diminish only 1 to 2 percentage points, from
7 through 11 percent, when the staged reduc-
tions under the Kennedy Round are over.
United Kingdom duties now average 14 to 17
percent and will be reduced to 12 percent by
January 1, 1972. Canadian duties range from
23.5 to 27.5 percent, exluding the recently
enacted "free trade" for automotive produc-
tion.
Figure 2 compares in graph form the average
tariffs assessed against the value of ferrous
fasteners in the markets under study with the
effect of low United States tariffs. Although
the Kennedy Round, as President Johnson
said, was a "great success," the present
situation cannot be allowed to persist - a
situation in which the tariffs of the other
principal industrial-fastener consuming and
producing nations are from P/s to more than
5 times higher than those of the United
States.
Refer to the IFI's `Memorandum in Support of Elimination of Tariff and Trade Barriers Abroad Affecting
Industrial Fasteners," in which Attachments 2 through 7 state in some detail the pre-Kennedy Round tariff
schedules for fasteners in the FederaiRepublic of Germany, France, Italy, United Kingdom, Canada, and Japan.
PAGENO="0191"
3791
Figure 2
* See Tab'e III footnote.
PAGENO="0192"
Country Tax
__________ Apptied
Tariff
Duty 73.32
Total Tax
%
Tariff
Duty 73.32
GERMANY Added Value
Total Tax
Tariff
Duty 73.32
tTALY Sales Tax
Compensatory
Total Tax
Tariff
Duty 73.32
BELGIUM Transmission Tax
July 1, t968 28.2
Jan. 1, 1972 27.0
t, 1968
Jan. 1, 1972 7.0
_______________ IC
July t, 968 18.2
12 17.0
8.2
7.0
4.0
6.6
18.8
July
1968
2L2
Over 1/4' & Over
1/4" Under 1/4"
It.8 8.2 1.8
10.0 7.0 _______
20.0 20.0
3t.8 28.2 31.8
30.0 27.0 30.0
2t.8 18.2
20.0 17.0 20.0
lt.8 8.2 11.8
7.0 tO.0
4.0
11.8 8.2
10.0 7.0 10.0
13.0 13.0 13.0
24.8 21.2 24.8
23.0 20.0 23.0
*All data relating to duties, sales taxes, pure/zest taxes, transmission taxes, turnover taxes, added value taxes, and compensatory
taxes supplied by the U. S. Department of Commerce, Bureau of International Commerce.
ttAll sizes refer to diameters where applicable.
3792
Table II - Summary of Duties and Taxes Applied to Ferrous Fasteners*
Initial/Final
Tariff Adj.
Dates: Gatt
FRANCE Sales Tax __________
1/4" &
Under
Rivets Cotter Pins
_July 1, 1968 8.2
Jan. 1,
10.0
11.8
8.2
11.8
.
10.0
7.0
10.0
10.0
10.0
too
21.8
July
July
6.6 6.6
1968
Jan.
1972
Total Tax
22.4 18.8 22.4
8.2
17.6
20.6
17.6
20.6
7.0
13.0
11.8
Jan. 1, 1972 20.0
NETHERLANDS
Tariff
Duty 73.32
July , 1968
Jan. 1.1972
8.2
7 0
16.1
24.3
23.1
11.8
8.2
11.8
10.0
16.1
27.9
26.1
7.0
10.0
TurnooerTax
161
16 1
Total Tax
%
July
1968
24.3
27.9
Jan.
1, 1972
23.1
26.1
SWEDEN
Tariff
Duty 73.32
TurnoverTax
July
, t968
7.2
7.2
7.2
7.2
Jan. 1, 1972
6.0
6.0
6.0
10.0
17.2
16.0
6.0
10.0
17.2
16.0
12.0
7.5
Two Rows
10.0
10.0
Total Tax
¶7
July 1, 1968
17.2
17.2
Jan. 1, 1972
16.0
16.0
JAPAN
Tariff
July 1,1968
12.0
12.0
12.0
Duty 73.32
Total Tax ¶7 No
Jan. 1, 1972
Additional Taxes Exi
7.5
Total Tax
7.5
%as Given
7.5
n Previous
CANADA
Tariff Duty
Sched.A43000..t
Jan. 1, 1968
23.5
23.5
23.5
23.5
Jan. 1,1972
17.5
17.5
SalesTax - No
t'urlher Mfg.
2.0
12.0
35.5
29.5
3.1
1.4
5.0
8.1
12.0
17.5
120
TotalTax
%
Jan.
1968
35.5
35.5
35.5
Jan.
.
, 1972
29.5
3.1
1.4
5.0
29.5
29.5
UNITED
STATES
(See Note I)
Tariff Duty
Sched. 6 646
Jan.
Jan.
.1968
, 1972
17.1
9 5
5.0
22.1
17.1
9 5
50
22.1
State Sales Tax'Ms.Possibte Vat.
Total Tax
¶7
Jan. 1, 1968
8.1
Jan. 1, 1972
6.4
64
14.5
14.5
UNITED
KINGDOM
(See Notes 2 and 3)
Tariff
Duty 73.32
July 1, 1968
13.8
13.8
16.8
16.8
Jan. 1, 1972
12.0
12.0
12.0
12.0
PurchaseTax
11.0
11.0
tt.0
11.0
Total Tax
%
July t, 1968
24.8
24.8
27.8
27.8
Jan. 1, 1972
23.0
23.0
23.0
23.0
PAGENO="0193"
Wood Screws
Bolts
Nuts
Lock Washers
Machine Screws
1/4" &
Under
28.6
Over
1/4"
32.8
1/4" &
Under
28.6
Over
1/4"
32.8
1/4" &
Under
28.6
Over5
1/4"
32.8
1/4" &
Under
28.2
Ooer5'
1/4"
31.8
1/4" &
Under
28.6
Over5
1/4"
32.8
28.0
31.0
28.0
31.0
28.0
31.0
27.0
10.0
18.2
4.0
30.0
10.0
4.0
28.0
31.0
8.6
12.8
8.6
12.8
8.6
12.8
SM
2.0
8.0
11.0
8.0
11.0
8.0
11.0
8.0
11.0 -
10.0
4.0
10.0
228
4.0
10.0
~6
4.0
10.0
4.0
10.0
4.0 -
10.0
4.0
10.0
4.0
10.0
4.0
6.6
8.6
6.6
12.8
6.6
6.6
6.6
6.6
6.6
8.2
6.6
11.8
6.6
~
8..
6.6
.....23~4..
21.6
12.8
11.0
19.2
23.4
19.2
23.4
18.6
21.6
18.6
21.6
8.6
12.8
8.6
12.8
8.0
11.0
8.0
11.0
8.0
11.0
7.0
10.0
UQ
JLQ
13.0
21.6
25.8
21.6
25.8
21.6
25.8
21.2
24.8
21.6
25.8
21.0
24.0
21.0
24.0
21.0
24.0
20.0
23.0
21.0
24.0
8.6
12.8
8.6
12.8
8.6
12.8
8.2
11.8
8.6
12.8
8.0
11.0
8.0
11.0
8.0
11.0
7.0
10.0
8.0
12.5
11.1
12.5
12.5
12.5
12.5
16.1
16.1
12.5
12.5
21.1
23.9
21.1
25.3
21.1
25.3
24.3
27.9
21.1
23.3
20.5
22.1
20.5
23.5
20.5
23.5
23.1
26.1
20.5
23.5
7.2
7.2
7.2
7.2
7 `
7.2
7.2
7.2
7.2
7.2
6.0
T~
7.2
16.0
6.0
~
- I
16.0
6.0
16.0
6.0
16.0
6.0
I
,
16 0
6.0
-
16.0
6.0
16.0
60
10.0
7.2
16.0
6.0
6.0
10.0
10.0
17.2
17.2
16.0
16.0
~0
~0
~0
~0
~0
J.2~
7.5
7.5
7.5
7.5
7.5
7.5
7.5
7.5
7.5
7.5
27.5
27.5
23.5
23.5
23.5
23.5
23.5
23.5
27.5
27.5
17.5
17.5
17.5
17.5
17.5
17.5
17.5
17.5
17.5
17.5
12.0
1 2.0
1 2.0
I 2.0
1 2.0
1 2.0
1 2.0
12.0
12.0
12.0
J~
1~5
29.5
29.5
* 29.5
29.5
29.5
29.5
29.5
29.5
79 6
1
~5.Q
12.5 -*
17.5
12.5
S-I
17.5
3.52
8.52
3.52
8.52
1.26
6.26
1.26
6.26
18.0
23.0
18.0
100
~
23.0
25.2
8.85
17.5
17.5
6.6
6.6
5.48
5.48
15.0
15.0
16.0
8.85
21.0
21.0
16.8/
13.8
16.8/
13.8
16.8/
13.8
16.8/
13.8
13.8
13.8
16.8/
13.8
16.8/
13.8
12.0
12.0
12.0
1 2.0
12.0
12.0
12.0
12.0
12.0
12.0
11.0
11.0
11.0
11.0
11.0
11.0
11.0
11.0
11.0
32.0
32.0
27.8/
24.8
27.8/
24.8
27.8/
24.8
27.8/
24.8
24.8
24.8
27.8/
24.8
27.8/
24.8
23.0
23.0
23.0
23.0
23.0
23.0
23.0
23.0
23.0
23.0
NOTES:
1. Percentages for rivets, bolts, nuts, and machine screws are ad valorem equivalents based upon dollar and weight in pounds of
respective product imports to U. S. for month of April, 1967. Data supplied by the Trade Relations Council of New York City.
2 Percentages for wood screws are ad valorem equivalents based upon dollars and gross of wood screws imported into the U. S. in
April 196Z Data supplied by the Trade Relations Council of New York City.
3. For bolts, nuts, and machine screws, the higher percentage is charged for all products whose value does not exceed 44 cents per
hundred weight or 0.44 cents/pound. The lower percentage is applied to products exceeding a value of 0.44 cents/pound.
3793
PAGENO="0194"
~3794
3. SIGNIFICANT NONTARIFF TRADE BARRIERS
The Industrial Fasteners Institute endorses
the President's concern about "the problem
of nontariff barriers that pose a continued
threat to the growth of world trade and to
our competitive position."4 The Institute
finds it exceedingly difficult to document the
variety and range of nontariff trade barriers.
An individual exporter has even greater diffi-
culty in predicting the exact effect of trade
barriers on his attempts to export to major
markets in Europe, Japan, and Canada.
In the EEC, the internal tax system imposes
high turnover taxes at the point of sale to the
customer. As applied to a United States
export, therefore, the base for the turnover
tax includes such cost factors as transporta-
tion to the entry port of the EEC country,
insurance, high customs duty, markup of the
agent handling the shipment, and freight to
destination. Turnover or similar taxes add at
least 15 percent to the fmal price to the
customer in the European markets. But the
vital point is that the high turnover tax is
applied to a tax base already inflated by a
high tariff.
The combination of the tariff duty plus the
turnover tax applied to it, as well as the other
elements of the tax base, adds about 25
percent to the other transportation handling
charges. Therefore, the European competitor
of the American exporter is at a substantial
advantage, because the turnover tax he pays is
not applied to a high tariff element. The
application of the tax to the tariff, in addition
to the other costs and charges for transporting
goods, imposes an additional tax comparable
to the tariff and, in effect, doubles this
particular form of burden on exports.
Please note that statistics referring to imports
into the United States are valued on a lower
and different system than that valued on
exports from the United States. In other
words, the effect in the United States of $1
million imports is much greater than the
effect in the foreign country of $1 million
exports from the United States.
Figure 3 shows nontariff barriers in percent
assessed against the value of ferrous fastener
imports in the countries under study. Where
(as in the United Kingdom) tariff duties are
higher than those in the EEC, the cost
imposed by the purchase tax over and above
its imposition on domestic manufacture may
not be as high as the tariff. Taken together,
however, the impact on exports in the United
Kingdom appears greater than the impact in
the EEC. The very high Canadian duty on
nonautomotive fasteners, plus the high sales
tax, means that the burden in Canada is even
greater. No percent or amount can be applied
to Japan, which has a complete and positive
control of imports by not permitting them
without a license. Japan also uses maximum
incentives to increase exports.
In third-country markets within the EEC, ex-
port incentives or subsidies make competi-
tion an even more unequal contest. Not only
does the EEC product have less distance to
travel and need not bear the external tariff of
the EEC, but its transportation and sale are
further facilitated by special tax reliefs and by
special export insurance and services.
In all probability, the most substantial pro-
gram of export benefits exists in Japan. This
program accounts for the fact that the bulk of
imports into the United States market are
Japanese (53.6 percent in 1967). Other for-
eign markets have a similar variety of diverse
but exceedingly effective laws and practices
that discourage the importing of United
States products, plus incentives to increase
their own exports. These laws and practices
(discussed after Section 6) are currently the
subject of study by the United States Govern-
ment, and the Institute supports and encour-
ages such study.
Message of January 1, 1968, to the Congress on the balance of payments.
I
PAGENO="0195"
3795
Figure 3
AVERAGE NONTARIFF BARRIERS BY COUNTRY
AVERAGE PERCENTAGES ASSESSED AGAINST VALUE
24 JAPAN* NONTARIFF BARRIERS INCLUDE:
Sales taxes
22 / Added value taxes
2O~ ~ FRANCE Transmission taxes
~ Turnover taxes
//// // Purchase taxes
1 8 - 7/// / LICENSE REQUIRED TO IMPORT
16////
/~ NETHERLANDS
/ / BELGIUM
- CANADA K~~M ITALY GERMANY SWEDEN
1.1.1.1.1.1.1
BARRIERS AS OF JULY 1, 1968
°Jopon hos maximum nonlariff barriers and maximum export incentives. No imports ore permitted without special license.
PAGENO="0196"
3796
4. UNITED STATES EXPORTS ARE HIGH-VALUE-PER-HUNDREDWEIGHT
SPECIAL FASTENERS THAT DO NOT ENTER THE NORMAL COMPETITIVE
FOREIGN MARKETPLACE
Several tables arid graphs presented in this
Statement demonstrate the burden carried by
United States exports. Table III dramatizes
the cumulative burden on United States
exports by summarizing the total percentage
of duty plus other taxes assessed against
imported iron and steel fasteners in the
markets under study.
Figure 1 (see Section 1) contrasts the high
assessment in the markets under study with
the low assessments in the United States.
The main point illustrated in Table III and
Figure 1 is that the range of such combined
charges in the EEC is now from 19 to~ 30
percent and, after the deductions in the
Kennedy Round have taken full effect, will
continue to be in the range of 17 to 28
percent - a decrease of only 2 percentage
points.
Parallel charts have been developed to show
the inequitable burden that is borne by
United States exports as against the tariff
burden borne by United States imports.
Figure 4 shows, in the markets under study,
the high total percentage assessed on bolts of
all sizes - and contrasts the quite low United
States assessment. Figures 5 and 6 show
comparable data for ferrous nuts and rivets,
respectively.
With these tariff and tax figures in mind, one
can examine the actual fastener exports of the
United States in order to demonstrate the
inability of exporters to place United States
manufactured fasteners~ in the European
markets.
In 1967, about $55 million in exports were
reported - about 3.6 percent of all domestic
fasteners sold commercially in terms of dol-
lars. But these exports are even less significant
than the 3.6 percent figure suggests:
1. Only about 16.8 percent of the
United States exports go to the mar-
kets under study, such as the United
Kingdom, France, Germany, and
Italy. (Exports to South America ac-
count for 11.6 percent, and 13.1
percent go to about 40 other coun-
tries. Japan imports an insignificant
1.4 percent [$785,000] of U. S.
fastener exports. Yet, Japan is one of
the most highly industrialized coun-
tries in the world.)
2. In 1967, 58.5 percent of these U. S.
exports went to Canada, which is a
highly specialized market for a num-
ber of reasons, including the U. S.-
Canadian Automotive Treaty.
3. In non-Canadian foreign markets,
United States exports do not enter the
normal competitive markets. The ex-
ports are limited to (a) replacement
parts for United States equipment, (b)
proprietary items, and (c) specialty
items of limited applicability, such as
those of very-high-alloy steel.
A comparison of the cost per hundred weight
of the United States products exported with
the overall average price per hundred weight
for fasteners manufactured in the United
States corroborates the reported finding that
manufacturer-exporters are selling only spe-
cialty items abroad. The overall average price
per hundred weight for fasteners manufac-
tured in the United States is about $38.00.
United States exports at $69.40 perhundred
weight for 1967 averaged nearly twice the
value per hundred weight of domestic manu-
factures but about four times the value per
hundred weight of imports.
Note that the product mix is especiaily
different. And this comparison is somewhat
PAGENO="0197"
July 1, 1968 35.5 35.5
Jan. 1, 1972 29.5 29.5
TABLE III.
SUMMARY OF TOTAL PERCENTAGES OF DUTIES AND TAXES
ASSESSED AGAINST FERROUS FASTENERS BY COUNTRY
35.5 35.5 35.5 35.5 39.5
29.5 29.5~ 29.5~ 295 - 29.5
Country
Total Tax
% On
Rivets
Cotter Pins
1/4" & Over 1/4" &
under 1/4" under
Wood Screws
Over
1/4"
Bolts
1/4" & Over 1/4" & Over
under 1/4" under 1/4"
Nuts
1/4" &
under
Lock Washers Machine Screws
Over 1/4" & Over 1/4" & Over
1/4" under 1/4" under 1/4"
Avg. %*
F
rance
July 1, 1968
Jan. 1, 1972
28.2
27.0
31.8
30.0
28.2
27.0
31.8
30.0
28.6
28.0
32.8
31.0
28.6
28.0
32.8
31.0
28.6
28.0
32.8
31.0
28.2
27.0
31.8
30.0
28.6
28.0
32.8
31.0
30.4
29.07
*
United
Kingdom
July 1, 1968
Jan. 1, 1972
24.8
23.0
24.8
23.0
27.8
23.0
27.8
23.0
32.0
23.0
32.0
23.0
27.8/
24.8
23.0
27.8/
24.8
23.0
27.8/
24.8
23.0
27.8/
24.8
23.0
24.8
23.0
24.8
23.0
27.8/
24.8
23.0
27.8/
24.8
23.0
26.90
23.0
Netherlands
July 1, 1968
Jan. 1, 1972
24.3
23.1
27.9
26.1
24.3
23.1
27.9
26.1
21.1
20.5
23.9
22.1
21.1
20.5
25.3
23.5
21.1
20.5
25.3
23.5
24.3
23.1
27.9
26.1
21.1
20.5
25.3
23.5
24.3
23.0
Canada
Belgium
35.5
29.5
35.5
29.5
39.5
29.5
July 1 1968 21 2 24 8 21 2 24 8 21 6
Jan. 1, 1972 20.0 23.0 20.0 23.0 21.0
39.5
29.5
35.5
29.5
35.5
29.5
25.8
24.0
21.6
21.0
25.8 21.6
24.0 21.0
25.8
24.0
21.2
20.0
24.8
23.0
39.5
~29.5
25.8
24.0
21.6
21.0
36.6
29.5
23.4
22.1
Ital
y
July 1, 1968
Jan. 1, 1972
18.8
17.6
22.4
20.6
18.8
17.6
22.4
20.6
19.2
18.6
23.4
21.6
19.2
18.6
23.4
21.6
19.2
18.6
23.4
21.6
18.8
17.6
22.4
20.6
19.2
18.6
23.4
21.6
21.0
19.7
Germany
July 1, 1968
Jan. 1, 1972
18.2
17.0
21.8
20.0
18.2
17.0
21.8
20.0
18.6
18.0
22.8
21.0
18.6
18.0
22.8
21.0
18.6
18.0
22.8
21.0
18.2
17.0
21.8
20.0
18.6
18.0
22.8
21.0
20.4
19.1
Sweden
July 1, 1968
Jan. 1, 1972
17.2
16.0
17.2
16.0
17.2
16.0
17.2
16.0
17.2
16.0
17.2
16.0
17.2
16.0
17.2
16.0
17.2
16.0
17.2
16.0
17.2
16.0
17.2
16.0
17.2
16.0
17.2
16.0
17.2
16.0
apan
July 1, 1968
Jan. 1, 1972
12.0
7.5
12.0
7.5
12.0
7.5
12.0
7.5
12.0
7.5
12.0
7.5
12.0
7.5
12.0
7.5
12.0
7.5
12.0
7.5
12.0
7.5
12.0
7.5
12.0
7.5
12.0
7.5
12.0
7.5
United
States
July 1, 1968
Jan. 1, 1972
8.1
6.4
8.1
6.4
22.1
14.5
22.1
14.5
17.5
17.5
17.5
17.5
8.5
6.6
8.5
6.6
6.3
5.5
6.3
5.5
23.0
15.0
23.0
15.0
25.2
16.0
8.9
8.9
9.3
7.7
* Values shown for all countries except the U S. are simple numerical averages of sveighted to more accurately reflect the svide spread in U S. assessment percentages.
duties and taxes by product size alone. Average values shown for the U S. are This spread is four times greater for the U S. than for other countries (see Table II).
PAGENO="0198"
Figure 4
TRADE BARRIERS AGAINST FERROUS BOLTS =
TOTAL PERCENTAGE ASSESSMENTS AGAINST VALUE 1968
(TARIFF AND OTHER TAXES) 1972
BOLTS OVER 1/4-IN. DIAMETER
PERCENTAGE ASSESSMENTS
0 10 20 30
I I I I
JAPAN
CANADA
FRANCE
UNITED
KINGDOM
BELGIUM
NETHER-
LAN DS
ITALY
GERMANY
SWEDEN
U.S.
JAPAN
CANADA
FRANCE
UNITED
KINGDOM
BELGIUM
NETHER-
LANDS
ITALY
GERMANY
SWEDEN
U.S.
I I I I I
1
I
I
I I
I
I I I
I
I
I I I
I I
j
I I
I
I
3798
BOLTS UNDER 1/41N. DIAMETER
PERCENTAGE ASSESSMENTS
10
20
~
30
°Japan has maximum nontariff barriers and maximum expott incentives. No imports are permitted without special license.
PAGENO="0199"
Figure 5
TRADE BARRIERS AGAINST FERROUS NUTS
TOTAL PERCENTAGE ASSESSMENTS AGAINST VALUE
(TARIFF AND OTHER TAXES)
3799
NUTS OVER 114-IN. DIAMETER
PERCENTAGE ASSESSMENTS
10
1968
1972
NUTS UNDER ¼-IN. DIAMETER
PERCENTAGE ASSESSMENTS
0 10 20 30
I I I
UNITED
KINGDOM
I I
NETHER-
LANDS
ITALY
GERMANY
SWEDEN -
U.S. I
I I
I *
I
I
I I I
ajapan has maximum nontariff barriers and maximum expart incentives. No imparts ane permitted withaut special license.
PAGENO="0200"
3800
Figure 6
TRADE BARRIERS AGAINST FERROUS RIVETS
TOTAL PERCENTAGE ASSESSMENTS AGAINST VALUE
(TARIFF AND OTHER TAXES)
1968
RIVETS OVER V4-IN. DIAMETER 1972
PERCENTAGE ASSESSMENTS
1~D 20 30
I I -
I I
NETHER __________________________________________________________________-
LANDS I -
UNITED
KINGDOM
BELGIUM I ________
GERMANY I
cwrnni ~
RIVETS UNDER ¼-IN. DIAMETER
PERCENTAGE ASSESSMENTS
0 10 20 3C
IAPAII4
-
I I
FRANCE4
NETHER
LANDS 1~~~
UNITED
KINGDOM M
I
ITALY 4
MANY~ I
EDEN I
~ I _______________ _______
°Japon tat maximum nontariff borriers and maximum export incentixe S. No imports are permitted without special license.
PAGENO="0201"
distorted by Canadian experience: if Canadian
exports are removed from the comparison,
the average value per hundred weight for
United States exports is significantly increas-
ed. For example, in 1967 the average value
per hundred weight for the United States
exports to the EEC was $367.45, or 20 times
the value per hundred weight of imports. As a
consequence, trade in fasteners with such
desirable markets as the EEC is out of
balance.
Table IV reveals the favored position of
imports and the high costs at which United
States manufactures must enter the European
market.
Table IV
Fasteners Balance of Trade
1962-1967
EXPORTS IMPORTS
TO* U. S. FROM* U. S.
Belgium
$ 5,822,000
$ 4,770,000
France
9,077,000
5,025,000
Italy
21,960,000
3,543,000
Netherlands
7,375,000
2,247,000
West Germany
10,553,000
7,831,000
Total S54,787,000 $23,416,000
If allowance is made for proprietary items,
special fasteners, and replacement parts,
which are indicated by the disparity in the
average value per hundred weight, Table IV
indicates that the EEC countries export to the
United States possibly ten times the volume
of standard fasteners the United States ex-
ports in competition to the EEC markets.
A comparable situation exists in the United
Kingdom, to which United States exports in
the same five-year period amounted to
$10,869,000, while United Kingdom imports
into the United States amounted to
$15,200,000. The $226.20 average value per
hundred weight of United States exports to
the United Kingdom clearly shows that our
exports did not enter the stream of commerce
in the United Kingdom but were special parts
and replacement parts not manufactured in
Europe or the United Kingdom.5
The Institute concludes that there is a serious
deficit in export trade. Overall, for the five
years discussed above, total exports amounted
to $174 million, and total imports amounted
to $245 million. Since trade with Canada is in
a special category, largely influenced by the
automotive industry, we believe that the truer
balance is in comparing the balance with
other markets. With Canada eliminated, total
exports for these five years were $49 million,
and total imports were $223 million - a ratio
in terms of dollars of about 4.6 to 1.
We believe this deficit can be overcome in
substantial part through increased exports at
the "top of the line" of United States
products. The removal of the barriers dis-
cussed in this Statement, we believe, would
permit true competition in foreign markets on
a price-quality basis.
It is, of course, impossible to prove that the
added cost deriving from a high tax on a tax
base that includes, among other uncompeti-
tive charges, a high tariff, is the reason why
American manufacturer-exporters cannot
penetrate major desirable markets. However,
it is the judgment of the members of the
Institute that removal of the barriers would
permit an appreciable increase in United
States exports.6 -
3801
U. S/EEC
EEC NATION
*Average value of exports from the U S. to these EEC nations is $192.55 per hundred sveight svhile the average
value of exports from these nations to the U S. is $15.95 per hundred weight. However, since foreign exports are
based on foreign value, rather than a c.i.f value, their value should be increased by 10 to 15 percent to be stated
more realistically.
Fasteners exported to Canada in 1967 under the special circumstances relevant to the market had an average value
per hundred weight of $53.55.
6 This judgment does not apply to Japan. Japanese imports, because of their volume, low price, and national policy
of export subsidy, pose issues of particular seriousness to the U S. fastener manufacturer. In terms of dollars,
Japanese imports into the U S. currently represent 53.6% of total U S. imports. While 75% of all Japanese exports
go to the U S. market, only 1% of U S. exports go to Japan. Recent reports indicate that Japan intends to increase
substantially its exports to the United States.
PAGENO="0202"
3802
5. UNITED STATES MARKET IS AS ENCOURAGING TO FOREIGN IMPORTS
AS FOREIGN MARKETS ARE DISCOURAGING TO U. S. EXPORTS
High tariff and nontariff barriers are only
one-half the total picture facing a United
States manufacturer-exporter. One of the
strong incentives for him to develop exports is
the impact of fastener imports upon the
United States market. The experience of the
members of the Institute has been that this
impact is appreciable, both in terms of the
market gained by the imports, the effect on
the prices of American fasteners, and the
displacement of American sales with attend-
ant loss of jobs in the United States.
With one exception, the United States im-
poses oniy minimal or nominal tariff duties.
There are no nontariff barriers that discrimi-
nate against imports competing with domestic
manufactures. The product entering the
United States enters directly the market with
which it competes and displaces United States
sales. Although previous statements of the
Institute have documented each of these
points, a brief recapitulation may be helpful.
The relatively low United States tariff duties
include virtually no duty on the common
fastener items and, in general terms, oniy a 20
percent duty, which will be halved by the
Kennedy Round, on other fasteners. This
tariff system no longer reflects the Congres-
sional intent behind the original treatment of
fasteners. In the 1922 and 1930 Tariff Acts,
Congress accorded bolts and nuts a specific
duty (i.e., Paragraph 330 of the 1930 Tariff
Act), while other fastener products, including
screws, were given a comparable duty stated
in terms of an ad valorem rate (i.e., Paragraph
397 of the 1930 Tariff Act). Congress' inten-
tion, we believe, was to protect United States
manufacturers of bolts and nuts by a specific
duty that would increase in protection during
a depression (a consideration that proved
initially successful in the 1930's).
However, since World War II, an infiltration
of unanticipated proportions has had the
effect of lowering the initial duty approxi-
mately 25 to 30 percent in ad valorem
equivalency to one that has no present com-
mercial effect. Screws and other fastener
items, not specifically provided for, have
maintained only a part of their relative
position, because the duty with respect to
them was imposed on an ad valorem basis
under former Paragraph 397 of the 1930
Tariff Act.1
Using import figures for the month of April
1967, we have computed the weighted aver-
age tariff of. fastener items to be approxi-
mately 4.6 percent, as based on current TSUS
rates. As of January 1, 1972, the weighted
average for the importations (applied for the
same imports) will be reduced to 2.8 percent.
United States duty in terms of the weighted
average is less than half of the duties in the
EEC countries, less than a third of the duties
in the United Kingdom, and less than a fourth
of the duties in Canada.
To repeat, the U. S. has virtually no duty on
the common fastener items, and the duty
after negotiated concessions on screw and
However, the actual burden imposed on importers is effectively less than this statement suggests because of
classification problems. The Institute is quite certain that many imports subject to the screw rate are invoiced and
dutied at the lower bolt rate. The disparate rates are an incentive to circumvent the screw duty by misclassification
and to pass fasteners into the United States without any real tariff burden. This conclusion is verified by import
statistics which show that, in 1965, bolts and nuts of iron and steel (which carry an average duty of 0.4 cents per
pound) in and of themselves accounted for 64.5 percent of imports by dollars, and 83.4 percent of imports by
hundred weight.
PAGENO="0203"
other nonspecified Paragraph 397 items will
be reduced from 20 to 10 percent under the
Kennedy Round agreements.
If United States tariffs decline further, the
United States will have no bargaining position
with which to reduce foreign trade barriers
through negotiation. The Institute thus
strongly opposes any further disintegration in
the United States tariff duties unless and until
a fair balance in duties can be obtained. The
several items carrying the screw level duties
represent virtually the only bargaining lever-
age available to the United States, and it
should be retained to negotiate reciprocably
fair conditions.
The impact of imports on the United States
market is more significant than their market-
share percentage would indicate. In 1967,
fasteners manufactured in foreign countries
and imported into the United States account-
ed for approximately 4 percent of the domes-
tic fasteners sold commercially (65 million of
1.6 billion).
There are two important reasons why the
impact of foreign imports is more significant
than their percentage share of the U. S.
market indicates. First, these imports are
low-value-per-hundred-weight standard prod-
ucts and directly displace sales of United
States manufactured fasteners (and the jobs
those sales represent). The imports also have a
disproportionate depressing result on the en-
tire commercial market. The average value of
imports in 1967 was $17.30 per hundred
weight This figure is to be compared with the
average value of United States products of
$38.00 per hundred weight Thus, all the
imports carry an average value of 45 percent
of the United States manufacture.
Second, the imports are exceedingly respon-
sive to opportunities in the United States
market. The decade 1952 to 1962 witnessed
an eightfold increase in bulk items under
Paragraphs 330 and 332 of the 1930 Tariff
Act (bolts, nuts, rivets, and other common
fastener items on which a specific rate of duty
has been imposed and on which the ad
valorem equivalency became commercially
insignificant). Because of the change in statis-
tical reporting under the 1962 Tariff Act,
there is some difficulty in continuity of
import statistics. Nonetheless, the accelerating
impact of fasteners on the United States
market is clearly evident There has been at
least 1350-percent increase in the dollar value
of imports during the last 14 years, as Table V
reveals.
Table V
INCREASE OF U. S. FASTENER IMPORTS
1953-1967
Imports Increase
Year into U. S. (5) from 1953 (%)
1953
$ 4,476,000
...
1954
4,673,000
4.4
1956
8,578,000
91.6
1958
10,316,000
130.5
1960
17,494,000
290.8
1962
23,235,000
419.1
1964
34,492,000
670.6
1966
58,411,000
1205.0
1967
64,520,000
1350.0
In summary, the low average value of imports
and their increasing volume does not permit
an opportunity for price competition, and
there is no way for the domestic manufac-
turer to recoup lost sales except by obtaining
the opportunity to compete in foreign mar-
kets. The Institute's members are willing to
match their competitive know-how with for-
eign competition in America or abroad, but
they must also be given a fair opportunity to
sell in the foreign markets as well. In short, a
reciprocal opportunity to participate in the
world-wide market is mandatory; such an
opportunity has been utterly prevented by
existing foreign trade barriers.
3803
TABLE V INDICATES THAT IMPORTS
DOUBLE IN VALUE EVERY OTHER YEAR
-A DANGEROUS RATE OF INCREASE!
PAGENO="0204"
3804
6. CONSEQUENCES OF PRESENT INEQUALITY
IN TRADE OPPORTUNITIES
The result of continued trade barriers is clear.
United States manufacturers must shift their
manufacturing operations to foreign markets.
In so doing, they would by one move avoid
the trade barriers and have the benefits of the
lower cost of manufacture. Under present
competitive conditions, such a shift in the
locale of manufacture would not only permit
competition in foreign markets but would
also permit a much greater volume of imports
into the United States from United States-
backed foreign manufacturers.
The fastener industry in the United States has
maintained technical leadership in the science
JAPAN
In this study, Japan is the only country that
does not have any additional tax over and
above the established duty rate. There are
several reasons for the absence of this tax. To
export fasteners from a given country to
Japan, it is necessary for the importer in
Japan to obtain an import license from the
Japanese government. Several attempts were
made to determine what restrictions and cost
might be placed upon an importer trying to
obtain an import license. No satisfactory
answers were obtained. It has been currently
established by a Department of State report
that the Japanese government maintains elab-
orate export promotion programs.
of producing fastener products for aerospace
vehicles and other sophisticated manufac-
tures. As an example, United States manufac-
turers will supply the most complex fastener
items for the assembly of the Concorde
supersonic aircraft - one of the applications
for which there is no adequate substitute for
United States technology. Any move of
technical know-how and capital to foreign soil
can only erode the technical capacity of the
United States fastener industry. Such a move
would severely diminish in the United States
the capability of an industry that lies at the
heart of virtually all assembly operations for
aerospace, military, and consumer products.
I. Favorable Tax Treatment
A. Reserve for Foreign Market Develop-
ment
Japanese exporters are permitted to
account up to one percent of their
profits from exports as a reserve for
foreign market development, which is
considered as an expense for tax
purposes, whether it is spent or not. If
the exporter is also the manufacturer
of the exported product, he may place
up to 1.5 percent of his income from
export contracts into this reserve
under the same condition. These re-
serves must be written up with equal
credits of income in the succeeding
five years after their establishment.
The above is the statement of the Government and International Affairs
Committee of the Industrial Fasteners Institute.
SUPPORTING DATA-EXPORT INCENTIVES AND SUBSIDIES IN
JAPAN, FRANCE, ITALY, BELGIUM, NETHERLANDS, AND GERMANY
PAGENO="0205"
B. Small and Medium Enterprise Re-
serves for Foreign Market Develop-
ment
A small or medium enterprise, which
is a member of a commercial or
industrial association that has been
authorized by the Ministry of Inter-
national Trade and Industry to accum-
ulate a joint reserve for foreign market
development, may count as a tax-
deductible expense up to 1.5 percent
of its income from foreign trade, if a
like amount is deposited in its associa-
tion's foreign market development
reserve. The association may count
the entire amount of this fund as a
tax-deductible expense if it is actually
used to develop foreign markets.
C. Special Depreciation Allowances
A firm designated as an enterprise
contributing to national export pro-
motion is issued a special depreciation
rate for its plant and equipment. This
rate is 80 percent of the normal rate
multiplied by the ratio of export sales
to total sales (maximum multiplier
is 2).
D. Reserve for Overseas Investment Losses
A firm investing abroad may accumu-
late a fund equal to 50 percent of its
investments abroad as a reserve against
overseas investment losses. The money
placed in this reserve is counted as a
tax-deductible expense.
E. Special Exemptions for Technical
Exports
A tax exemption is granted in the
amount of either 1 or 2, below,
whichever is lower.
1. 70 percent of the amount paid
for the use of the patent or
other technical knowledge.
2. 50 percent of the income ac-
cruing from the above con-
tract.
F. Entertainment Expense
A certain percentage for expenses for
the entertainment of foreign buyers
may be authorized as tax-deductible
expense on a case-by-case basis.
G. Tax Refund for Exporters
Exporters and export manufacturers
may be refunded a portion of the
import duties paid on raw material
and components to be used in the
manufacture of products that are sub-
sequently exported from Japan (up to
a maximum of 0.5 percent of the
price of the exported product may be
refunded).
II. Special Financial Treatment
A. Export Trade Bill System
At the direction of the Finance Minis-
try, an export trade bill drawn by an
exporter with the letter of credit as
security may be discounted at 4.645
percent per annum, if it qualifies for
rediscount by the Bank of Japan.
1. A nonsecured export trade bill
may also qualify for a loan
from a city bank. If an export
trade bill, drawn by an export-
er after the conclusion of an
export contract is qualified for
rediscount by the Bank of
Japan but is secured by a
letter of credit, a city bank
may loan money against the
export trade bill at 5.475 per-
cent per annum.
2. Under this system there is no
limit on either the size of the
applicant company or the
value of the letter of credit,
but loans cannot be granted
more than one year before
shipment.
Foreign Trade Exchange Fund Loan
System
The bank of Japan maintains a fund
from which loans can be made to city
banks to facilitate the purchase of
export bills by foreign exchange
banks. When a city bank purchases an
export bill that is a time draft, the
equivalent of the export bill may be
loaned to the city bank at an annual
interest rate of 2.555 percent. This
policy allows the city bank to release
more funds for the purchase of addi-
tional export bills.
3805
B.
46-127 0 - 70 - pt. 13 - 14
PAGENO="0206"
3806
C. Overseas Economic Cooperation Fund
This fund can loan and invest in
projects to Japanese firms engaging in
industrial development that will accel-
erate economic interchange between
the recipients and Japan. The rate of
interest on these loans is 3.5 percent
per annum or higher, and normal
maximum terms are for 20 years.
D. Japan Development Bank
If a private enterprise contributes
appreciably to national economic
growth through foreign trade, and if
the modernization for that enterprise
is considered important for the
growth of the national economy,
Japan Development Bank loans may
be available to that company for the
purchase of new equipment. Firms
qualified for this financing are general-
ly capitalized at less than S5.6 million.
III. Export Insurance System
There are eight insurance plans adminis-
tered by the Ministry of International
Trade and Industry under the Japanese
Export Insurance Law of 1950: Ordinary
Export Insurance, Export Price Insurance,
Export Bill Insurance, Export Loan Insur-
ance, Consignment Sale Export Insurance,
Overseas Advertising Insurance, Insurance
on the Principal of Overseas Investments.
Of these, approximately 62 percent of the
total insured amount occurs under the
first plan of Ordinary Export Insurance.
IV. Wage Differences
The current wage scale in the Bolt, Nut,
and Rivet Industry in Japan has been
reported as approximately $150 per
month. This rate compares to the average
monthly wage in the Bolt, Nut, and Rivet
Industry in the United States of $550 per
month. Thus, it is readily apparent that
Japan does not require any other taxes
beyond duty to establish significant barri-
er to the importation of foreign fastener
products. In 1963 Japan exported fasten-
ers to the United States for a total Lo.b.
value of $13,263,000. Total fastener
exports to Japan in 1963 had a value of
$1,820,000. Thus, a ratio of almost 12 to
1 exists between exports of fasteners to
the United States and all imports entering
Japan.
V. Summary
Fasteners exported by Japan to the
United States:
1962 -$11,205,000 1965 -$29,494,000
1963 - $13,680,000 1966- $32,270,000
1964 - $18,751,000 1967 - $35,457,000
Total fastener exports from Japan to the
United States for the six-year period:
$140,857,000
Fasteners exported by the United States
to Japan:
1962 - $100,000 1965 - $289,000
1963 - $101,000 1966 - $387,000
1964 - $217,000 1967 - $785,000
Total fastener exports by the United
States to Japan for the six-year period:
$1,879,000. Total trade deficit:
$138,978,000
FRANCE
I. Exemptions from Sales Tax
All exports are exempted from~ sales tax.
II. Tax Relief Measures
Producers exporting at least 20 percent
and merchants exporting at least 50 per-
cent of their total sales volumes may be
allowed to delay payment of taxes be-
yond the due date if they can show that
their temporary inability to pay is due to
their efforts to export. Expenses connect-
ed with services and market research
carried out with the view of establishing a
sale abroad may be deducted from a
firm's taxable income over a period of
three years, but must be put back into
taxable income later. The restitution may
be spread over a period of five years and
may be waived with respect to certain
countries designated by the Administer of
Finance.
Exporters may establish a tax-free reserve
to recover possible losses on exports made
on medium-term credit, but reserves not
used to cover such losses must be taken
back into taxable income in the last tax
year.
III. Export Insurance
A. Credit Risk Insurance
The French Export Insurance Com-
pany issues insurance to cover risks
PAGENO="0207"
3807
for nonpayment of goods exported on
credit, when risks cannot ordinarily be
covered commercially. This company
is a quasi-governmental organization.
B. Export Promotion Insurance
Export insurance is provided by the
French Export Insurance Company
against financial risks arising from
export promotion projects in foreign
markets. The insurance enables firms,
if their export programs fail wholly or
in part, to recover up to 50 percent
and more in some cases, of the
amount disbursed and not amortized.
C. Exhibitors Insurance
The same French company covers
firms against risks involved in efforts
to sell abroad through participation in
foreign trade fairs. An insured firm
receives an advance of 50 percent of
authorized expenses. If the firm's
effort is successful, it reimburses the
advances in installments, over a period
of a year or two, as a percentage of
sales in the area where the trade fair
took place.
D. Credit Term
The Bank of France provides a special
rediscount rate of 3 percent on ex-
ports payable. The regular rate is
currently 3.5 percent. Loans with
terms of over eight years may be
granted by French commercial banks
directly to foreign companies to
finance export sales of equipment
valued at more than $5,000,000. The
portion of the loan in excess of five
years is drawn from government
funds.
E. Export Awards
Export awards are given annually for
outstanding export performance to
firms employing less than 5000 work-
ers. The first prize in each category
(of which there are eight) consists of
6000 miles of air travel credit with Air
France.
turnover taxes levied on the product
during the course of its production and
distribution. The rates vary from one to
6.5 percent, calculated on the f.o.b. or the
actual sales price, as proved by the expor-
ter to the Italian Customs.
II. Export Credit
A. Mediocredito
Direct participation by Mediocredito
consists of refinancing 75 percent of
the export credit principal financed
by an Italian medium-term lending
institute. The interest rate applicable
to financing by Mediocredito Centrale
is 3 percent. The interest rate to the
foreign importer for the amount refi-
nanced by Mediocredito must not
exceed 5.9 percent. The balance of
credit is charged the normal rate of
8.5 percent.
B. Interest Rate Subsidy
An interest rate subsidy of 2.6 percent
to cover part of the interest payable
on credit exists. The maximum allow-
able rate of interest on export credit is
8.5 percent. If the interest rate sub-
sidy ,is paid, the effective rate charged
a foreign importer may not exceed 5.9
percent.
C. Combined Participation through Refi-
nancing and Subsidy
Mediocredito may refinance 25 per-
cent of the export credit principal
financed by the lending institute, and
may grant a subsidy toward payment
of interest of 2.3 percent per annum
on the remaining 75 percent of the
principal.
BELGIUM
I. Exemptions and Rebates
An exemption from the transmission tax
is granted on sales of goods by manufac-
turers or traders to destinations outside
Belgium and on the purchases by manu-
facturers or traders on goods for export.
Partial or total exemptions from the
transmission tax are given at the time of
re-exportation of imported goods, whether
they have been altered or not.
H. Preferential Discount Rate for Export
Acceptances
The Belgium International Bank discounts
ITALY
I. Tax Rebates
Exporters receive a rebate of turnover on
their sales. Different rates of rebate are
established according to the amount of
PAGENO="0208"
3808
export acceptance at a preferential margin
below its normal discount rate for com-
mercial acceptance of up to 120 days
term. For acceptance of 120 days or
longer term, the Institute of Rediscount
and Guarantee offers a similar preferential
margin.
HI. Export Credits
The Belgian Government aids export pro-
motion by granting credits to exporters
through the Institute of Rediscount and
Guarantee, Credit Export, and the Export
Financing Pool.
NETHERLANDS
I. Tax Rebates
An exporter may obtain a rebate on
turnover taxes paid on goods exported
and on raw materials and semimanufac-
tures used in their production. Provision is
also made for rebates of taxes paid on
solid fuels, gas, and electricity consumed
in the manufacture of exports.
II. Reinsurance Facilities for Export Credit
Insurance
The Dutch Government reinsures export
credits granted by the Netherlands Credit
Insurance Company, a private firm. There
is no ceiling on the amount the govern-
ment may reinsure, and all categories of
goods and services are eligible for this
insurance.
III. Netherlands Council for Trade Promotion
This Council is financed on a 50-50 basis
by the government and private industry.
Government contributions amount to
over $400,000. The Council covers the
following subjects to promote Dutch
exports: Market Analyses, Trade Fairs,
Trade Missions, Trade Directory, and
Economic Information Services.
GERMANY
In June, 1967, Germany published its new
Added-Value Tax Law, which became effec-
tive January 1, 1968. The purpose of this law
is to eliminate the tax-upon-tax situation that
had existed under the previous turnover tax
structure. Under that tax structure, imported
goods were taxed at 6 percent, while under
the new value-added structure they will be
taxed at 10 percent. The new added-value tax
on imports is a deductible pre-tax, and there-
fore, a transmitted item. By comparison, the
old import equalization tax was the base for a
pyramid of accumulated taxes. Thus, the
difference between the new rate and the old
rate could be less than appears obvious,
depending upon the number of stages be-
tween importer and consumer.
As under the old system, the computation of
tax on imports is based on the customs value.
Both systems include in the customs value the
duty and excise taxes, but not the import tax
itself. The value-added tax system also in-
cludes the transportation costs in Germany to
the first point of destination, if these costs are
not already included in the invoice price.
Indications are that the value-added tax
adopted by Germany could be the forerunner
of a new taxing method to be used by all EEC
participants to replace their present turnover
tax structure.
At the time of import, an equalization tax
equivalent to the added-value tax applicable
to domestic goods will be levied, together
with the customs duty. Import equalization
tax rates are identical with added-value tax
rates.
PAGENO="0209"
3809
The Industrial Fasteners Institute gratefully acknowledges the gracious help received from:
1. U. S. Department of Commerce 8. Notice by the Commissioners
Bureau of International Commerce of Customs & Excise
Washington, D. C. Great Britain Notice No. 78,
November, 1966
2. U. S. Department of Commerce
Field Office 9. International Commerce
Cleveland, Ohio U. S. Department of
Commerce Weekly
July 31, 1967
July 17, 1967
3. Canadian Consulate January 22, 1968
Cleveland, Ohio
10. German American Trade News
4. British Consulate Volume 21 #9 Sept. 1967
Cleveland, Ohio #10 Oct. 1967
#11 Nov. 1967
#12 Dec. 1967
5. Office of the Special Representatives for
Trade Negotiations:
Report on U. S. Negotiations, 11. Consulates General of Japan
Volume I East 42nd Street
New York, New York
6. Trade Relations Council
122 East 42nd Street 12. Ernst & Ernst
New York, New York Union Commerce Building
Cleveland, Ohio
7. Overseas Business Reports
OBR 65-11 March, 1965 13. Bureau D'Etudes Economiques
OBR 67-70 November, 1967 10, Rue St. Augustin
(U. S. Department of Commerce) Paris, France
PAGENO="0210"
3810
The Government and International Affairs Committee of the Industrial Fasteners Institute* has, to
the best of its abilities, verified the schedules and other data that support the analysis given in this
Statement. However, member companies of significant size and experience in exporting have
encountered a number of difficulties in assembling the necessary data. The information presented is
as precise as possible but can be supplemented (and extended to other markets) if useful.
The Institute will respond to any questions raised by the material presented in this Statement or to
supplement it in any way that might be helpful in further developing the significant points which it
believes the Statement raises.
Respectfully submitted,
James A. Graham, Chairman,
Government and International
Affairs Committee,
Industrial Fasteners Institute
~ Industrial Fasteners Institute is an association representing United States manufacturers of fasteners. It is
particularly concerned with technical matters, such as United States and international standards, standardization,
and engineering, but also serves as the trade association representative of the mechanical fastening indust,y.
PAGENO="0211"
3811
Mr. BtrRLESON. Thank you very much, Mr. Graham. It is a most
interesting and informative statement.
Mr. Masterson, do you have anything to add?
Mr. MASTERSON . No, sir.
Mr. B1JRLESON. Mr. Pettis, do you have some questions?
Mr. PETTIS. Thank you, Mr. Chairman.
I would like to pursue one point~ that you make where I think you
state that our exports to Japan amounted to approximately $1,750,000
last year.
Mr. GRAHAM. That is correct.
Mr. PETrIS. And that was primarily in the area of replacing fas-
teners on military equipment, probably American military equipment,
things of that nature.
Mr. GRAHAM. That is correct.
Mr. PETTIS. I gather little or none of this was used in Japanese manu-
facture or in products that originate in Japan.
Mr. GRAHAM. That is our impression.
Mr. PETTIS. Is it possible that some of the products that we see on
the American market made in Japan with American labels on them
could use these fasteners or are their prohibitions against that today,
the fasteners?
Mr. GRAHAM. I do not know that we are really prepared to answer
that question, but I can offer an opinion that if there is a Japanese
product on the market in the United States in an assembly of some
type that was assembled with mechanical fasteners the chances are
very high that the fasteners included are Japanese in origin.
Mr. PErrIs. This is certainly not intended to pose a solution to your
problem. I was just wondering where the American companies got
their fasteners who are producing products in Japan, at least with an
American label on them.
Mr. GRAHAM. My impression is that they would get them either in
Japan or some other country other than the United States because our
export into Japan is so small that we could not support much of a
product export program for any company; $1.7 million worth of fas-
teners is a very small amount. We have analyzed the mix of products
involved in the $1.7 million and you will find fasteners in there of
beryllium, titanium, very, very exotic types of fasteners mostly related
to the aerospace industry, or the electronics industry, where the price
per pound is extremely high; $1.7 million represents very few fasten-
ers in number. They are exotic special fasteners, in other words?
Mr. PErrIs. I have just one more question, Mr. Chairman.
Where does the great bulk of the exporting of fasteners go? To what
countries?
Mr. MASTERSON. Mostly to Europe and again they are mostly pat-
ented or proprietary items. Low value per ton standard. fasteners com-
ing into the United States have a depressing effect on the entire mar-
ketplace. Exports are essentially high value per ton special fasteners
that cannot be produced in Europe but the biggest user would be
European countries, to some extent as replacement parts for U.S.
vehicles and machinery and so forth, in Europe. We do not penetrate
foreign markets. They penetrate us at will.
Mr. PETTIS. This is non-Japanese markets?
PAGENO="0212"
3812
Mr. MASTERSON. This is correct.. Bitt we do have an export capability
and would have a favorable U.S. balance of trade in spite of European
non-tariff barriers.
In Japan with the export licensing required we can not jump over
that wall. In their own statement which they have given to us they
say that they have created a very favorable fastener balance of trade
with the United States while the imports of fasteners are very low.
This is in their own language and this is quoted in the text.
At the request of our State Department and Department of Com-
merce the last. 12 years we have been very cooperative w-ith the Japanese
fastener industry. They have set up an institute somewhat similar
to our own. We are friendly and helpful to them. They have markets
behind the Iron Curtain and they can sell wherever they want to w~here
we do not have free access because either we do not w-ant to or the
Government says you should not.. This is not true with the Japanese.
They sell to Red China, any market in the world.
Mr. PErrIs. If you exclude the items you talk about as replacement
items you really have a zero market, then, in Japan?
Mr. MASTER5ON. This is corrcet..
Mr. BURLESON. Thank you, Mr. Graham and Mr. Masterson, for
coming.
Mr. GRAHAM. Thank you, Mr. Chairman.
(The following statements were received for the record:)
STATEMENT OF BUILDERS HARDWARE MANUFACTURERS ASSOCIATION, CLYDE T.
NISSEN, EXECUTIVE DIRECTOR
PURPOSE OF STATEMENT
1. It is the purpose of this statement to present viewpoints of the builders'
hardware manufacturing industry relative to proposed Bill H.R. 14870, The
Trade Act of 1970.
With qualifications, the builders' hardware manufacturing industry favors the
broad purposes contained in the proposed legislation. It is believed that the in-
terests of the American Economy and of American industry can be advanced
through legislation of this type provided proper safeguards to prevent unwar-
ranted damage to industry are also enacted.
2. We urge that that basic objectives outlined in the proposed legislation be
accomplished without serious and needless injury to American industry. Such
damage can, w-e believe, be kept to a minimum through retention of adequate
safeguards and the clarification and strengthening of Congressional powers and
control.
INTRODUCTION
Builders' hardware includes hinges, cabinet hardware, door controls, locks
and lock trim, exit devices, sliding and folding door hardware, padlocks, archi-
tectural door trim and a wide variety of miscellaneous shelf hardware such as
coat hooks, window locks, door stops, key blanks, etc.
The Builders Hardware Manufacturers Association is a trade group of Ameri-
can companies who manufacture builders' hardware items. The membership of
the association accounts for approximately 75% of the total dollar value of
builders' hardware items manufactured and shipped in the United States.
In general, the industry is composed of more than 200 manufacturing organi-
zations, ranging in size from those who employ less thna 2h~i to companies whose
employment exceeds 3,000. The companies are located nation-wide, with special
concentrations in the lower New England area, in the Chicago area, and in Cali-
fornia. In 1969. the net shipments of the industry amounted to approximately
$700,000,000 according to projected survey figures of the Department of Com-
merce.
Although industry members are sympathetic with the over-all purpose of the
proposed legislation, we believe it necessary that the following points should he
made clear:
PAGENO="0213"
3813
1. Oontinued reductions in tariff rates on builders' hardware products may
well cause irreparable economic injury to American producers of builders' hard-
ware.
2. Foreign producers of builders' hardware need no additional import duty
reductions to become competitive in the domestic market. Under current tariff
rates, foreign producers of builders' hardware have been able to increase their
share of the American market by 824% over the past `ten full years, according
to government reported import statistiès.
3. The reduction or elimination of foreign tariffs and non-tariff barriers to
American-made builders' hardware products will not assist this industry in the
expansion of its export markets. In August 1963, representatives of the builders'
hardware manufacturing industry met with Department of Commerce repre-
sentatives for the purpose of advising the Department relative to specific foreign
tariff and non-tariff barriers to the export of industry products. The meeting
report substantiates the statements contained herein and supports the conclu-
sions reached.
REASONS FOR LIMITED INDUSTRY EXPORTS
Exports of builders' hardware products have continued to decline during the
past decade. The reasons for the low export position of this industry are
numerous.
a. Wage rate differentials. High production cost for American builders' hard-
ware products tend to make such products non-competitive in European and
other foreign markets. A major portion of these costs are labor charges, includ-
ing soical benefits, which in the Common Market countries are only about one-
third of the rate in the United States and even lower in other markets.
b. ~tylc differences. American builders' hardware styling has little acceptance
in foreign markets. The streamlined, clean cut of many American designs does
not appear to fulfill the foreign desire for builders' hardware that is heavy and
decorative, extra costly by American standards. American style cylindrical locks,
slim surface-applied door closers and hardware for lightweight doors appear to
create little interest in the European marketplace. For American hardware manu-
facturers to tool-up for production of European styles and standards would be
prohibitively costly in view of the available market size and other deterring
elements.
c. Diverse standards. Technical standards for builders' hardware items in the
various foreign markets `differ from American standards. The cost of tooling to
produce the different types to meet foreign standards solely for export sale
would be uneconomic and prohibitive for American manufacturers.
d. Nationalistic tendencies. In most European countries, small but well estab-
lished manufacturing plants satisfy the needs of the market for builders' hard-
ware items. Their market is protected by local product standards, a preference
by consumers for products of their own country and a favorable price differential
already noted.
THREAT OF INCREASED FOREIGN IMPORTS
As previously noted, foreign producers of builders' hardware are presently en-
tering the American market and obtaining an increasing volume in spite of the
existing import duty rates. The volume of imports has been increasing heavily
over the `last five years and certain foreseen elements would indicate that this cx-
pansion of builders' hardware imports will continue. European hardware manu-
facturers, since the close of World War II, have been working at capacity to
answer the needs of a re-building Europe. Now that this boom is over, foreign
hardware manufacturers can be expected to turn their attention to the American
marketplace. H
Even in meeting the current competition of foreign imports, American builders'
hardware manufacturers are faced with certain unquestioned facts. Builders'
hardware specifications published by the Department of Commerce tend to make
for a huge, mass market of builders' hardware products to which a foreign manu-
facturer may quickly and easily gear his production.
The less complicated products manufactured by the domestic builders' hard-
ware industry such as hinges, cabinet hardware, sliding and folding door hard-
ware, shelf and closet items, etc., have no important differences in general ap-
pearance or `obvious performance characteristics to shield them from being
displaced by closely competitive foreign imports. Foreign manufacturers are
mechanized and have equivalent productive skill. Their production per man hour
is equal to ours;. however, their labor charges, including soical benefits, as noted.
PAGENO="0214"
3814
are only about one-third or less of the American rate. The effect of this tre-
mendous disparity in wage rates can be judged by the fact that payroll represents
a major percentage of the industry dollar volume.
Among the more complicated items manufactured by the domestic builders'
hardware industry such as door closers, floor checking hinges, cylindrical and
tubular door locks, exit devices, etc., increased labor is required to fabricate
products to meet American standards of quality. Accordingly, because of the
high percentage of labor cost in the finished product, the industry's competitive
position against imported merchandise is vastly weakened. It is becoming more
difficult for performance characteristics and design features to overcome the
heavy price advantage enjoyed by imported hardware, even w-ith present small
import duty rates.
Another problem which faces the American builders' hardware manufacturer
is the requirement that he comply with certain Federal enactments not binding
upon the foreign manufacturer. An example is a recent purchase order by the
Navy Department open to bid by both domestic and foreign manufacturers.
American bidders are forced to meet U.S. product standards, comply w-ith min-
imum wage and hour laws and adhere to applicable sections of the Waish-Healy
Act. Foreign competitors need not meet these restrictions, with the result that
the foreign supplier can usually submit the lowest bid.
The continued lowering of domestic import duty rates is usually a one-way
street. Imports increase substantially w-hile exports, for reasons previously
noted, struggle to hold their own or fall off. In time this can substantially affect
the balance of trade in builders' hardware products.
CONCLUSIONS
It is the opinion of industry members that foreign tariff and non-tariff barriers
to the import of American-made builders' hardware products are not factors of
major importance in limiting the amount of industry exports. The present barriers
to the export of builders' hardware items are not those imposed by foreign gov-
ernments. The true barriers to export are, as already indicated:
a. The lower production costs enjoyed by competing foreign manufacturers,
mainly because of vastly lower wage rates, an advantage which cannot be com-
pensated for by so-called American know how and efficiency.
b. The lack of ready acceptance in European markets of American-style
hardware.
c. The prohibitive ëosts which an American manufacturer faces if he decided
to tool-up to meet the diverse technical standards of each nation of the European
community.
d. The nationalist tendencies of both purchasers and installing craftsmen
which make the sale of competing foreign builders' hardware products practically
impossible.
Continued cuts in the U.S. tariff rates on builders' hardware items which
w'ould probably be sought should the United States reque~t removal of foreign
tariff barriers, could be most damaging to the American industry and w-ould
most certainly open our doors to increased, harmful, low-cost imports of builders'
hardware items. It should be noted that the barriers to export of builders' hard-
w'are items noted above, are mainly non-governmental, involved w-ith labor rates,
styling, consumer preferences and differing standards. w-hile the barriers to im-
ports are solely the small existing tariff rates (already reduced by more than
75% of the rates of 20 years ago) imposed by the United States government.
There are no w-age rate advantages, no nationalistic approaches to builders'
hardw-are preferences, no particular style objections, and no discriminatory
standards, only those published by the government-an invitation to participate
in the greatest mass market the world has ever known.
The builders' hardware manufacturing industry of the United States currently
enjoys no effective protection against low--priced foreign imports. We would
support legislation under which the indu~try can continue to grow and serve
the American public with fine quality hardware products at economical prices.
In pursuit of this goal, the industry is confronted w-ith these hard facts:
a. The import duty on all important classifications of builders' hardware has
already been reduced more than 75% under the Reciprocal Trade Agreement Acts
and their extentions. (In addition, it should be recalled that the effectiveness of
the remaining specific duties have been greatly weakened through years of
monetary inflation.)
b. The industry's products are articles of prime essentiality and of strategic
PAGENO="0215"
3815
necessity. The industry, because of its primary product and its manufacturing
versatility, is essential to the national welfare in times of war and peace.
c. Since the industry faces serious difficulties due to rising costs, loss of export
markets, excess manufacturing capacity and intense domestic competition, a large
influx of foreign builders' hardware, which would follow a further reduction in
import duty rates, could be fatally damaging to American manufacturers.
d. The American builders' hardware manufacturing industry cannot readily
convert its main productive facilities into the manufacture of other products.
For these reasons, the builders' hardware manufacturing industry respectfully
recommends that (a) adequate safeguards for American industry be included in
any proposed legislation which involves a further reduction of import duties;
and (b) provision be made in any new trade legislation to require appropriate
government agencies to hear representatives of affected industries before and/or
during negotiations with foreign governments concerning the import duty rates of
industry products.
Uxn'im SPATES WOOD SCREW SERvICE BunEAu,
New York, N.Y., June 5, 1970.
Subject: Urgent Appeal for Legislation to Prevent Plant Closings Due to Imports.
HON. WTn~BIn~ D. MILLS,
Chairman, Committee on Ways and Means, U.S. House of Represent a~tives,
Longworth House Building, Washington, D.C.
DEAR Mn. MILLS: On behalf of the domestic manufacturers of wood screws,
machine screws, rivets, aircraft locknuts and related threaded fastener prod-
ucts, we respectfully request and urge that the Committee on Ways & Means of
the U.S. House of Representatives add an amendment to Import Quota Bill HR
16920 which would include in that Bill an absolute import quota on the above
mentioned threaded fastener products.
This urgent appeal is made to you because of the critical conditions which,
as a result of substantial increases in imports, have arisen in the domestic
threaded fastener industry and which now threaten to completely eliminate our
domestic industry and eliminate thousands of American jobs.
The facts of this situation are as follows:
1. As indicated by the enclosed chart marked Exhibit "A", in the period from
January 1, 1964 through 1970 imports of all types of screws, nuts, bolts, and rivets
entering the USA will increase more than 254%. Back up figures on the chart
indicate that in 1964 the annual imports of these products amounted to
$34,123.536.00 while in 1970, projected, they will increase to approximately
$120,900,000.00.
2. A glaring example of the serious erosion `of our domestic induStry by imports
now in progress is clehrly `shown by the atttached black and red chant marked
Exhibit "B". This `shows that `IMPORTS OF WOOD SCREWS HAVE ALREADY
CAPTURED 72% OF THE AMERICAN MARKET.
3. Based upon recent statistical `Studies by `the domestic industry, where an-
nual sales of `$26,218.00 are required to support the job ~f one employee, we find
that the `impact of imported `screws `on `the U;S. market, prevents employment of
between 8,000 `and 9,000 factory workers.
4. Three `appeal's for "escape" and relief from injury filed with the U.S. Tariff
Commission by the U.S. Wood Screw `Ser~ice Bureau have been of no avail.
Accordingly, we respectfully submit `that the only solution to this problem is
quota legislation Ito protect our American producers `and their employees as sug-
gested by the addition of an absolute quota provision `on these thi-eaded fastener
products to Import Quota Bill HR 16920.
We respectfully `request that this letter be included in the Record bf the Inter-
national Tm do Hearings now being conducted `by `the `Committee on Ways &
Means of the U.S. House of Representatives.
I'n accordance with your Committee requiremen't~s three copies of this letter
are sent to you `herewith.
Please note lth!ait this appeal is submitted `to you on behalf `of the manufacturing
concern's appearing on the li'~t also attached to this letter.
Yours very truly,
GEORGE P. BYRNE, Jn., E~ecreiary.
PAGENO="0216"
9.5
9.0
8.5
8.0
7.5
7.0
6.5
6.0
5.5
5.0
4.5
4.0
3.5
3.0
2.5
3816
FROM
GEORGE PBYRNE,JR EXHIBIT `A"
R*RRRRR,NR ~T0TAL IMPORTS OF SCREWS.NUTS.BOLTS&RIVETS INTO U.S.A~
DATA FROM BUREAU OF CENSUS - U 5 DEPT OF COMMERCE THESE LEVELS
COMBINED TOTAL DOLLAR VALUATION OF 17 MAJOR GROUPS IN 1971?
AS CALCULATED FROM
IMPORTER'S OWN OPTED LOW-LOW DECLARED VALUA1~ON FOR EACH ITEM SUB~CT TO DUTY
198
C ~
9.5
9.O-----------------
ii i
-
III~~~"
4.0
3.5
3.0
2.5
1964 $ 34,123,536 $ 2,843,628
1965 49,940,088 4,161,674
1966 56,141,580 4,678,465
1967 65,568,828 5,464,069
1968 70,979,256 5,914,938
1969 97,547,231 7,295,634
*1970 120,900,000 10,075,000
MONTH & QUARTERLY COMPARISONS
1968 1969 1970
JAN $6,469,584 $2,596,956 $10,196,344
FEB 4,580,346 5,141,059 8,335,563
lStQO. ~441 ~ ~
APR 5,025,213 7,259,391
MAY 5,704,985 8,309,160
JUN 5 823 248 7 514 948
QU. 3~3TT~8os 7~EQT~3oo QT1~ooo*
JUL 5,300,190 8,700,432
AUG 7,237,629 7,074,744
3PSQO ~ 07593,000*
OCT 6,444,305 8,316,947
NOV 5,895,370 8,164,459
AtOM. ~ ~ 11,224,000*
YEAR 5,914,938 7,295,634 10,075,000*
*1970 Rh,t pP*J~RR~d RN
PAGENO="0217"
3817
PAGENO="0218"
C,)
I-
w
>
Cl)
0
I-
2
C,~
L~J
U
0
Cl
U
F-
Cl
I-
Cl
I-
0
0~
3818
PAGENO="0219"
U)
F-
w
>
U)
0
U)
F-
z
U)
U
U)
0
U)
U
F-
3819
PAGENO="0220"
EXHIBIT "B" W7O PROJECTED MO. AVG. RATE-'
DOMESTIC WOOD SCREW MANUFACTURERS NEED AN IMPORT QUOTA NOW IN ORDER TO
MORE FACTORY CLOSINGS AND EMPLOYEE LAYOFFS IMMINENT!
-WOOD SCREWS IMPORTED - IN NUMBER OF GROSS - 000 OMITTED
FROM:
2000 JA~..Y.~OOD SCRE~5ERVICE BUREAU
IMPORTS OF WOOD SCREWS INTO U. S. A.
1:800
DATA FROM U. S. DEPT. OF COMMERCE
1,700 Note! HN THOUSANDS OF OROSS
1600 ..~ THIS CHART SHOWS ENORMOUS INCREASE IN IMPORTS OF WOOD SCREWS INTO U.S. A.
IT REPRESENTS THE SUM TOTAL IMPORTS FROM ALL OF THE FOLLOWING LOW LABOR
1,500--~ ~ .~ ,,-... -.,..
& LOW MATERIALS COST COUNTRIES:
1,400
BELGIUM UNITED KINGDOM HONG KONG INDIA
1300 SWEDEN NETHERLANDS TAIWAN DENMARK
1200 ~. JAPAN AUSTRIA YUGOSLAVIA &
GERMANY ITALY MEXICO OTHERS
1,100
US. TARIFF ACT OF 1930 DUTY RATE
1,000 - ___ --- -
COMMODITY NO. 6200820
900 - --- .. -.
800
700
600
500
400
300
200
100
JI
--SE
YEA,,. ~ TO
LESS THAN 1/~ OF l.% OF
TOTAL U.S.A. SALES
DURING WORLD WAR II DURING THE FOST WAR PERIOD, FOREIGN WOOD
AMERICAN WOOD SCREW SCREW FRODUCERS OFERATING UNDER A TWICE
FRODUCERS BUILT LIF THEIR REDUCED (G.A.T.T.) TARIFF RATE OBTAINED 42% OF
PLANTS AND SUFFLIED THE THE TOTAL U.S. MARKET IN 1962. WHEN PROJECTED FOR TEAR 1970-IT IS ÷72%
FREE WORLD WITH SCREWU
FOR WAR FRODUCTU
PAGENO="0221"
U.S. WOOD SCREW SERVICE BUREAU
331 Madison Avenue
New York, N. Y. 10017
3821
WOOD SCREW~ CONSUMPTION IN THE U.S.A.
43 YEAR COMPARISON - IMPORTS vs. DOMESTIC
YEAR
1928
1929
1930
ORDERS
JGross)
4,658,837
4,651,367
(1)
14 DOMESTIC MANUFACTURERS
MONTHLY AVERAGE RATES OF:
(U.S. Wood Screw Service Burppp,)
-
(2)
IMPORTS OF WOOD SCREWS
INTO THE U.S.A.
-Monthly Average Rates
--
PERCENT
OF
..`- c
(U.S.
(Gross)
4,900,829
4,740,092
`~ nsa ~flQ
(Gross)
7,879
29,204
17~9~
.177.
.63
36
.167.
.62
.58
1931
1932
1933
2,293,745
1,570,658
2,397.476
2,339,854
1,627,570
12:923
5,342
10,671
.56
.34
.44
.55
.33
.46
1934
1935
1936
2,254,589
3,140,866
3,049,753
2,277,835
2,891,017
3,031,882
14,491
27,155
43,852
.64
.86
1.44
.64
.94
1.45
1937
1938
1939
2,344,171
1,925,929
2,749,412
2,654,333
1,936,490
2,621,773
48,782
13,918
12,042
2.08
.72
.44
1.84
.72
.46
1940
1941
1942
2,803,477
4,540,936
3,810,778
2,668,931
4,351,851
3,812,598
2,229
11
None
.08
--
--
.08
--
--
1943
1944
1945
3,744,580
3,153,931.
3,337,249
3,791,818
3,247,862
3,199,669
None
None
5
--
--
--
--
--
--
1946
1947
1948
5,253,600
3,874,916
3,029,845
3,936,848
4,210,695
3,637,110
41
156
57
--
--
--
--
--
--
1949
1950
1951
2.674,422
4,992,249
4,053,356
2,628,030
4,239,436
4,365,027
. 776
146,689
528,~2l4
.03
2.94
13.03
.03
3.46
12.10
1952
1953
1954
3,238,101
3,530,049
3,405,458
3,301,706
3,578,088
3,362,306
T394,448
460,141
336,896
12.18
13.03
9.89
11.95
12.86
10.02
1955
1956
1957
3,255,423
2,829,452
~
3,147,195
2,807,322
2,408,141
744,026
816,558
605,489
22.86
28.86
25.30
23.64
29.09
25.14
1958
1959
1960
2,290,339
2,453,429
1,914,835
2,201,109
2,454,731
1.922.138
603,836
985,537
972.422
26.36
40.17
50.78
27.43
40.15
50.59
1961
1962
1963
1,902,043
1,614,901
1,441,717
1,930,188
1,637,345
1,419,717
804,826
1,198,476
1,146,422
42.31
74.21
79.53
41.70
73.20
80.75
1964
1965
1966
1,436,517
1,504,597
1,447,618
1,428,761
1,489,656
1~4Q~,~09
1,410,828
1,592,144
1,690,476
98.21
105.82
116.77
98.74
106.88
119.99
1967
1968
1969
1,159,635
1,148,731
1,005.972
1,217,691
1,147,939
965.396
1,232,069
. 1,691,625
. 1,989,570
106.25
147.26
197.77
101.18
147.36
206.08
`~l970-lst Qu. 751,319
By Months.
823,062
1,956,218
~
260.37
237.67
1969-Jan. 1,175,025
- Feb. 1,041,916
Mar. 1,199,117
*1st Qu. 1,138,686
Apr. 1,091,913
May 1,203,457
Jun. 1,086,454
1,074,633
1,026,566
1,136,603
1,079,267
1,128,016
1,037,455
1,082,Q~.6
555,031
1,413,665
2,078,816
1,349,170
2,610,860
2,154,726
2,280,166
47.24
135.68
173.36
IT8Z8~
239.11
179.04
209.87
51.65
137.71
182.90
125.01
231.46
207.69
210.73
Jul.
Aug.
Sep.
921 533
904,895
840,654
798,925
826,109
899,006
z'Uub,ozO
1,601,279
~ ngg ngg
O~T
Nov.
Dec.
1,154,671
826,081
625,945
I~f03
843,355
6~~~59
2,504,105
1,893,995
2,687,294
216.86
229.27
429.31
240.98
224.57
387.79
LI I. 11
176.95
74g - 39
193:83
232 27
1970-Jan. 736.534
Feb. 703,012
Mar. 814,410
*1st Qu. 751,319
828.827
773,240
867,121
823,062
2,382,066
1,485,325
2,001,264
1,956,218
323.42
211.28
245.73
~65~7
287.40
192.09
230.79
~T7T~7
* NOTE (1) TOTAL U.S. MARKET FOR WOOD SCREWS DURING let QUARTER OF 1970 AMOUNTED TO
- 2,707,537 GROSS. IMPORTED SCREWS OBTAINED 1,956,218 GROSS OR 72.0% WHILE
AMERICAN MANUFACTURERS RECEIVED ORDERS FOR ONLY 751., 319 GROSS ~
(2) COMPARING TRENDS DURING let QUARTER OF 1969 WITH let QUARTER OF 1970,
IMPORTED SCREWS GAINED +457. WHILE DOMESTIC MANUFACTURERS ORDER VOLUMES
DECLINED 337~~
46-127 0 - 70 - pt. 13 - 15
PAGENO="0222"
U.S MANUFACTURERS OF SCREWS AND RELATED FASTENER PRODUCTS
LOCATION
LANCASTER, PA.
OARTF0RN, CORN.
UNION, N.J.
WATERRURY, CONN.
FRANKLIN PARK, ILL.
OETIIEVILLE, VA.
RERFORW OEICIITS, 01110
WAT005000, CONN.
REDFORD 1IEICI1TS , 01110
hARTFORD, CR1111.
CL.EVE1.RND, 01110
REA1IFOOT, S.C.
SOUTI1 CATE, CALIF.
CIIESTER, COND.
ROCKFOOII, IlL.
1100ADVIER, ILL.
RELL000R, 11.1..
DUO I1EOFO11D, MASS.
LAKE000D, CALIF.
1IASS ILLON, 01110
I1OCISFWRD, ILL.
ChICAGO, IL!..
DETROIT, MICII.
ClEVElAND, 01110
ClEVElAND, 01110
CIIICACO, ILL.
MOIITON 000VE, ILL.
COMDERLAND, II. 1.
WEST 11R1ITF000, CORN.
1IRIDGEFOICC, CONN.
CIIICAEO, ILL.
ROCIIESTER, IND.
FULLERTON, CALIF.
ClEVELAND, 01110
CLEVElAND, 0111W
STUOLING, ILL.
STERLING, ILL.
MICIIICAN CITY, INC.
lANCASTER, PA.
IIIALEAII, FLA.
C1IICAGR, ILL.
MIL,FOOD, CONN.
WALTIIAM, MANN.
I1OC1CF000, ILL.
OOCICFORD, ILL.
GREENVILLE, MISS.
NATIONAl. I1IVEY P. MANRFACTURIRG COMPANY
NATIONAL SCIIUW U. MANUFACTURING COMI'ANV
I'IANT
- CLEVELAND lIly.
- CA1.IFI)IUNLA lIly.
- CIIANI1I.ER l'OURUCTS CRRPOOATIUN
- S1)11L11E11N IIIVIS ION
ULYRI'IC SELlER P. IIIVET CORPORATION
OR. II. O1UEMIL.LILR CISM1'ANV
I'AIUKCO-KAlON CIII1FORA'CION
1'. II. FASTENERS
FIIEI1I,l, MANUFACTURING COOlANT
(IF NEW ENGLAND
l'IONEEIl SEllER 0. NUT COR1'ANY
l'llECIS ION I1IYET CISMI'ANY
11EED U I'IlLNCE MRN1JFAGTORING COMPANY
11E1'IJDI.IC STEEl, COIlIRRATION
DOCKF1IR11 AEIRIS1'ACE FU000CTS, INC.
110CKF1SI1D SCREW I'IIODUCTA COOlANT
SAFETY S1)COE'C SC 11CR CRRI'OOATION
SC. 1.O1IIS SCREW P. 001.0 COMI'ANY
SEllER U llOL;r DIV. 0001II.ES CORPORATION
SC1O~O U. IIIII;r lILY. MUI)Yl,US CORI'ORATNON
SET BElIER P 1IAN1IFRETURING COMPARE
AOTTIIINETWR IIAI1IIRWIIE DIV. MODULUS COWL'.
SOUTIIEION SCI1EW C1101'ANO
STAN1AI1I1 l'IlESSED STEEL COMPANY
- CLEVELAND CAl' SCREW PLANT
STANDAI111 SCIOUW COMI'ANO
STANSCI1UW FASTENE11S
TEAL.E MWCIILNE COMI'ANY
J. L. EIIOMSON RIVET CORPORATION
TIME AChIER U. MANUFACT1JRING COOP.
TORNE 000INSOD FASTENEO COMPANY
TOWNSEND CRMI'ANY
TOWNSEND COMI'ANT
- ROOTS AI1SCDAFT NUT DIVISION
- CIIERRT 1110EV DIVISION
TOIIOLRR IIIYUT & STUD DIV.
TROJAN RIVET COMI'ANV
11110-FIT SCREW PRODUCTS COOP.
UNITED SCOUR AND DOLT CORPORATION
ONI0000AL SCREW COMI'ANV
VRI-NIIAN/DIV. OF VSI CORPORATION
OALER-UEECI1 CORI'ORATION
OEJ-IT EXPANSION PRODUCTS, INC.
WILITNEY SC1IER COIIPORATION
LOCATION
WA1IFUD, RISC.
CLEVELAND, 01110
MUNTOI1, 0111W
Cl.EVEIANW, 01110
LOIS ANGELES, CALIF.
CLEVELAND, 01110
CULL.MAN, AIADAMA
EL, SEGUNDO, CALIF.
YOI1K, IA.
CLIFTON, N.J.
EARI)ENA, CALIF.
CIILCAGR, 11.1..
T1)11I1INGTON, CONN.
ELK GIU)VE VILLAGE, ILL..
WORCESTER, MASS.
CIJIVE1ANI1, 1)1110
SRNTA ADA, CALIF.
OOCKFISOII, 11.1..
CIIICAUII, 11.1..
ST. 1.1)1)15, MR.
1'ITTSIIOIlGII, PA,
CII ICUEW, ILL..
I1AIICL.ESC, 11.1..
SOIJTIIINGT11N, CONN.
STACESVIL.L.E, D.C.
JENKINTOWN, PA.
CLEVELAND, 01110
ILAIEUFOIIII, CONN.
IIELL500D, ILL.
I1I1CIIESTEII, N.Y.
RALTILADI, MANS.
IIOCKPUIIL1, ILL.
DEAI1I1RIUN, RLICII.
IIEAVEIL FALLN, PA.
SANTA AMA, CALIF.
SANTA ADA, CALIF.
DOAINTI1EE, MAWR.
GLENDALE, CALIP.
CLEVELAND, 01110
CLEVELANI, 01110
FRANKLIN PARK, ILL.
COLVER CITY, CALIF.
I1DCKFORD, ILL.
DI100MFIELD, 01110
NAWIIOA, Nil.
COMPANY
WOOD SCREWS - MACHINE SCREWS - TAPPING SCREWS - SOCKET SCREWS - CAP
SCREWS - RIVETS - AIRCRAFT LOCKNUTS - RELATED THREADED ITEMS
/98 FACTORIES7
______________ COMPANY
ACCURATE TUII1EA000 FASTENERS, INC.
AILED MAN0JFACTORING CUMI'ANY
AVUIIACE-ESNA CORPORATION
ADUI1ICAN CIIAIN & CARLO CODIPANV, INC.
AMEIIICAN I1IYET COMPANY, INC.
AMEIIICAN SCI1EW COMPANY
AYERICAN SCREW I'RODUCTS COMPANY
ANCIIOII FASTENEIIS, DIV. OP DUELL IND. , INC.
ANCIIIU FASTENEIS, DIV. UP RUELL IND. , INC.
ATlANTIC SEllER ROOKS, INC.
llEl.L,i'URD METAL, l'IlODUCTS , INC.
TIlE (LAKE U. JUIINSON EOMI'ANY
(LAKE 1110EV COI)I'ANO
Dl. S. Dll(II)KS & SODS, INC..
CAMCAII SCIUEW U. MANOFACTOR1NG
Ci!) TOOL. SCI0EW COMI'ANY
CIIICAGO I1IVET U. MACIIINU COMPANY
CONTINENT.\I, SCI1UW COMPANY
OUMONT AVIATION ASSOCL,TES, INC.
EATON YALE U. TOONY, INC.
ELCO TOO!. U. SEllER COlll'WMATIUN
EYEIILOCK CIIICACO, INC.
FELIEIIAL, SCREW OOIIKS
U. UI. FEI1I1Y SCREW PRODUCTS COMI'ANY, INC.
TIlE FEI1RY CAl' P. SET SCREW COMI'ANV
EIIEAT LAKES SCREW, DIV. U.S. INDUSTRIES, INC.
11. M. IIAI1I'Ehl COMI'ADY
IIINDL.EV MANOFACTIIIIINU COMPANY
1IIILR-KROMU COMI'ANY
IIIIILIIELL DIV ISbN, 1LA000Y II0000LL, INC.
ILLINOIS TOOL. 0011KW, INC.
INDIANA OUTAL I'RONOCTN
INTEI1NATIONAL, SCREW COMPANO
KAUNAR MANUPAETODIDG COMPANY, INC.
KERR-LAKESIRE INDUSTRIES, INC.
LAKE ERIE SCREW COIIPOMATIRN
CIIAOL.ES 0. LARSON COMPANY
LAWI1ENCE DROTIIERN
LUIGII PR000CTS, INC., GERWIN INDUSTRIES DIV.
MAE-IT I'AIITS COMPANY
MERRILL MANOPACTERING COOPOVATION
MIAMI RIVET COMI'ANV, INC.
PLIDIAND NEREW CORPORATION
MILFOI1D RIVET & MAChINE COMPANY
GEORGE W. MOORE, IDE.
NATIONAL. LOCK COMI'ANY
- FASTENER DIVISION
- DElTA METAL-FORMING DIV.
- STEEL INDUSTRIES DIV.
PAGENO="0223"
~3823
DESIGN PRODUCTS, INC.,
Sarasota, Fla., May 20, 1970.
JOHN MARTIN, Jr.,
Chief Counsel, House Ways c~ Means Committee,
Longworth Building, Washington, D.C.
DEAR Mn. MARTIN: I am writing to you regarding the hearings on foreign trade
competition.
I am president of Design Products, Inc. and wish `to `lodge my pretest regarding
merchandise which we manufacture and which `has been copied by Japanese
manufacturers.
The result `has been that we have lost our customers to `this unfair competition.
Why `should `these people be permitted to ship into `this country manufactured
goods made with lalyor costs far below `our standard? A tariff `should be placed
on this merchandise to protect the American manufacturer.
The `items `in question are the various rod holders shown on `the enclosed
catalog.
I am `sorry that I cannot attend `the hearings, as I would like to voice my
concern.
I am sending a copy of this letter to Congressman J. A. Haley. Also enclosing
a j~h'otostat of `our letter to Mr. Halely, mailed 6/22/67.
With bent regards, I am
Very truly yours,
HARRY GOODMAN, President.
Mr. BURLESON. The next witness is Sidney Silver, vice president
of Foreign Trade Division of the National Association of Secondary
Material Industries, Inc.
We are glad to have you, Mr. Silver.
STATEMENT OF SIDNEY SILVER, VICE PRESIDENT, FOREIGN
TRADE DIVISION, NATIONAL ASSOCIATION OF SECONDARY MA-
TERIAL INDUSTRIES, INC.
Mr. SILVER. Mr. Chairman, we have submitted a full brief of our
position. I would like to give a more concise one in the interest of
keeping within `the time designated.
Mr. BURLESON. Very good, sir. Thank you.
Mr. SILvER. Mr. Chairman, my name is Sidney Silver and I am the
vice president of the Foreign Trade Division of the National Associa-
tion of Secondary Material Industries, a national trade organization
now in its 58th year. The Foreign Trade Division represents the lead-
ing importers and export; of secondary materials in the United States,
including such commodities as nonferrous metals, paper stock, and
secondary textiles.
The Foreign Trade Division strongly believes in the principle of
free international trade. It is firmly convinced that U.S. trade policy
must move in the direction of free trade through the elimination of
restrictive export controls, as well as oppressive tariff and tax laws.
Our `members have, over a period of many years, built very excellent
relations with foreign `customers. They travel abroad, on a regular
basis, to maintain their contracts with these foreign customers; many
of the companies have offices abroad; and many exporters are mem-
bers of the Bureau International de la Recuperation, the international
secondary materials trade association. Our U.S. export firms have
been able to develop overseas markets and maintain them despite sharp
world competition.
1. This has aided the United States balance-of-payments position.
2. It has helped strengthen `the U.S. economy.
3. It has established outlets for certain secondary materials which
PAGENO="0224"
3824
either had no market iii this country or had limited demand domesti-
cally. As a result, it has played a vital role in the concept of recycling
secondary materials which otherwise would have to be dumped or
destroyed. This has aided our country in removing obsolete and dis-
carded materials from the streets and highways and thus helped in
the program of beautification.
4. It has led to the cementing of good will with other nations and
friendly relations with U.S. allies broad.
5. Helps to maintain worldwide equilibrium in supply demand
which, in turn, helps stabilize the price in the United States.
The rapid rate of industrialization abroad has given impetus to the
worldwide demand for secondary materials. This is particularly true
of many of the Western European countries, as well as Japan. Tradi-
tionally, the United States has been the major exnorter of scrap to
overseas consumers, who have been dependent on U.S. supplies. By not
making scrap available to them, these consumers have had to search
for other sources of raw material, thus depriving the United States of
those copper sources in the form of ores and concentrates. Because of
the inability of U.S. exporters to meet commitments as a result of
embargoes and quotas, the relationships developed by U.S. suppliers
over many years are slowly being eroded.
We might point out here that secondary metals, for example, nlay
a vital role within the total metal industry operations. Over 3 million
tons of nonferrous scrap metals are annually processed by dealers and
consumed by the domestic consuming industry in the United States.
Approximately 45 percent of the total available copper is recovered
from scrap, as is about 30 percent of all aluminum and 18 percent of
all zinc. More than 50 percent of the total domestic lead supply is
recovered from scrap and approximately 15 to 20 percent of all nickel.
The United States remains the largest exporter of nonferrous scrap
metals in the world and many of our allies in Western Europe and the
Far East depend on our supplies of secondary metals to help them in
the process of industrialization. Unless these countries-and many of
the emerging nations, too-can secure these available secondary
materials, they will be forced to turn to other countries to meet their
requirements. Some of the Soviet satellite nations have already begun
to compete w-ith the United States in foreign markets. A loss in U.S.
export business will mean a loss in the balance of payments for this
country.
One of the major problems facing us today is the need to reutilize
and cycle secondary materials in order to help create an improved
environment. Unless the effort is made to recycle vast tonnages of
secondary resources `back in the industrial mainstream, we will be. faced
with a pileup and accumulation of staggering quantities of solid wastes
in this country. One of the ways to stimu'ate this recycling process
is to export those secondary materials which cannot be readily utilized
in the United States but which have markets abroad.
It is apparent that this will become an important phase of the entire
recycling effort. The more material we can export. or reuse overseas,
the better for our economy and the better for our environmental man-
agement. It is therefore vitally important that every effort be made to
encourage the movement of secondary material to those outlets w-here
it can be recycled.
Unless this encouragement, is forthcoming, there will be a break-
PAGENO="0225"
3825
down in the collection machinery in the United States among scrap
dealers which would be most harmful for the future collection and
processing of solid wastes domestically.
We therefore urge that steps be taken to permit the widest possible
latitude in exports of secondary materials from the United States in
the interests of both the economy of the United States and of its
future environmental programs.
The harmful effects of restrictive export controls can be gaged in
two specific metals: (1) Copper and copper-base scrap; and (2)
nickel and stainless steel scrap. We should like to describe these two
developments in somewhat greater detail.
(1) In November 1965, export quotas were established by the De-
partment of Commerce for copper and copper-base scrap. Under the
terms of these quotas, export shipments for these commodities were
drastically reduced one-third of what they were formerly (from
90,000 tons to 30,000 copper content tons.) While there has been a slight
liberalization of these quota figures, the export industry has been
operating under these restrictive quotas for about 5 years.
It has become obvious that the long-term maintenance of the quotas
has had deleterious effects on U.S. export firm relationships with for-
eign consumers. It has given other countries a change to move into
areas supplied by U.S. exporters and thken away their business. It has
stratified a system of controls intended to be temporary and made it
into a permanent method of operation. it has eliminated initiative
among new firms who might ha~eA entered into the export business
by freezing them out because of the restrictive quota system. It has
caused a dislocation of the movement of raw material supplies on an
international basis which in turn has contributed to the widening of the
price gap in the two-tier price system.
Perhaps most of all, it has not cured the disease it was supposed to
cure. The export controls were established in 1965 in order to ease the
shortage of copper and to reduce the inflationary trend which the
Government felt was becoming a threat in the copper market. But any
statistical study would show that export controls have accomplished
neither: the supply-demand situation in copper today is hardly any
different than it was in 1965; and the price of domestic primary copper
has gone up substantially since 1965.
It was the contention of the Foreign Trade Division when quotas
were first introduced in 1965 that they would not stabilize the copper
situation but would, on the other hand, cause further dislocation of
supplies and tend to disrupt the international market situation. What
has happened is that the supply of scrap hopper in the last 5 years has
shown substantial growth; more and more scrap has been supplied to
the domestic consumers; but portions of t.his scrap might normally be
exported to foreign consumers has had to be kept in this country de-
spite the fact that during the past 5 years many domestic consumers
have not been in the market for it.
Obviously, export controls can, theref ore, become a device for admin-
istering price controls. By shutting out one possible market-the
foreign market-the movement of material can only be directed to
domestic consumers who can then "control" the prices they pay for the
scrap. The original intent of the export quotas may therefore be sub-
verted, in favor of one particular segment of the U.S. industrial corn-
rnunity at the expense of another.
PAGENO="0226"
3826
We might point out that the sum total of copper and copper-base
scrap export in prequota. years was roughly about 5 percent of the total
volume of scrap generated. We feel that the export of this small per-
centage of material could not in any way injure the domestic industry
in this country. There are today adequate supplies of copper available
for all consumers. To have put into effect. a control mechanism that has
lasted 5 years is of inestimable harm, however, to the entire U.S. export
trade and the U.S. economy.
(2) An even more dramatic example of Government export restric-
tions can be found in the tota.l embargo of nickel and stainless steel
scrap exports which was instituted by the Department of Commerce
in July 1969. The embargo was the result of a major strike among
Canadian nickel companies which brought the flow of nickel to a
virtual halt.
Exporters of nickel and stainless scrap showed understanding of the
need for such an embargo when it was first announced. In meetings
with officials of the Department of Commerce they indicated their co-
operation in seeing to it that domestic consumers of nickel and stain-
less steel scrap would receive all available supplies of material through-
out the emergency. It might be pointed out that were it not for the
tremendous flow of nickel and stainless steel scrap during the strike
period, many U.S. consuming plants might have had to close down. As
it was, not a single plant closed its doors.
During this period we urged the Department of Commerce to pre-
pare for the time when the emergency was ended, in order to permit
immediate resumption of exports of nickel and stainless scrap to cus-
tomers a.broad with whom our industry has had longstanding com-
mitments.
The strikes ended in November 1969. But it was not until 6 months
later that the Department of Commerce took action to ease the
embargo. In the meantime, the nickel shipments by the major Canadian
nickel companies returned to normal and the market for scrap declined
sharply. Prices fell below prestrike levels. After constant urging by
our association, the Department of Commerce finally took initial steps
to end the embargo and eliminated earlier announced plans to insti-
tute quantitative export quotas on July 1, which our association had
strongly opposed. -
Quantitative controls would have brought about chaotic conditions
within the industry and stratified a system of controls which had no
reason for being imposed under existing market conditions.
We bring these two cases to the attention of the House Ways and
Means Committee as evidence of what can happen once the Govern-
ment embarks on tactics of controlling the free flow of materials. The
result is frustration, dislocation, inequality, and discrimination. The
United States should be encouraging, rather than discouraging, the
movement of secondary materials in international trade.
One other point has to be made, and that is the consistent rise in
transportation costs. Because of this, our export industry is facing
severe world competition in moving our commodities.
The shipping interests are piling on successive freight boosts on
ocean transport of our materials. In some instances the transportation
costs have become greater than the actual cost of the material. As a
result, some types of secondary material have to remain in this coun-
try, accumulating as solid waste, rather than finding outlets abroad
PAGENO="0227"
3827
where they could be sold to consumers who could utilize them. Such
mounting freight costs are doing permanent harm to American ex-
ports.
We urge Congress to reexamine the very basis of our trade policy
in order to encourage foreign trade. Our association last month met in
London with many other secondary trade organizations throughout
Europe, at the meeting of the Bureau International do la Recupera-
t~on, in an attempt to eliminate world trade barriers and to build
international good will.
The 1970's will see a greater world demand for raw materials, par-
ticularly in the emerging nations. If the United States is to play a
major role in the future as a supplier of such goods and commodities,
it is vitally important that restrictions and impediments to the flow of
secondary materials be eliminated and that the Government do every-
thing in its power to encourage and enforce the free trade policies
which have helped the United States become a major force in the world
market.
On behalf of the association we wish to thank you for letting us
be here today. H
Mr. B~JRLESON. Thank you for coming, Mr. Silver. That is a very
interesting statement.
Mr. Pettis, do you have questions?
Mr. PETrIS. No, thank you.
Mr. BTIRLESON. Again we thai~k you, Mr. Silver.
(The following statements were received for the record:)
STATEMENT OF THE ALUMINUM ASSOCIATION, SUBMITTED BY MONROE LEIGH,
COUNSEL, INTERNATIONAL POLICY COMMITTEE
This statement is filed on behalf of The Aluminum Association, whose mem-
bership and purposes are set forth in Appendix A. The Association's comments
are directed to general United States trade policy as it has evolved since 1962
and as it may be expected to develop during the decade of the 1970's. This pres-
entation does not deal specifically with the detailed provisions of H.R. 14870 or
any other particular trade bill except~ to note that the Association favors con-
tinued expansion of world trade on a genuinely reciprocal basis. Instead, the
focus of these comments is related to ~he methods of trade negotiation and the
elimination of trade barriers as seen from the perspective of the aluminum in-
dustry at this time.
It is a common observation that the problems of trade policy are infinitely
more complicated for the United States now than they were in 1934 when the re-
ciprocal trade program was launched. Nevertheless, the basic objective of United
States foreign trade policy remains valid: to press for continued encouragement
of reciprocal world trade through the elimination of inequities and the reduction
of trade barriers generally with the objective of expanding that trade on a world-
wide basis. At this stage in our history, however, it is far more important to
develop the techniques for achieving this condition than to reiterate that general
objective.
The principal recommendations offered by The Alumnium Association may be
summarized briefly:
1. The fundamental purpose of American trade policy should be to foster and
maintain world market conditions which permit genuine international competi-
tion on the basis of business considerations. By this we mean competition based
on business skills and on more efficient use of resources, rather than on subsidies
and advantages resulting from national procedures and policies. Accordingly, the
Association strongly recommends that a major effort be made to eliminate ineq-
uities in tariff treatment and to reduce nontariff barriers and other restrictive
techniques which prevent genuine international business competition.
2. Tariffs, i.e., customs duties, on aluminum products should be harmonized at
the lowest possible level. In this respect we point out as we have in earlier state-
ments to this Committee, that one of the major unresolved problems in aluminum
PAGENO="0228"
3828
trade is the substantial disparity between United States and European Economic
Community traiffs on aluminum products. Both the Kennedy Round negotiations
and subsequent price changes have resulted in even greater disparities than ex-
acted at the time of the 1962 Trade Expansion Act. A major concern for the
American aluminum industry is the elimination or narrowing of these disparities
in aluminum tariffs.
3. In the Kennedy Round negotiations a tentative effort was made to negotiate
tariff reductions on a "sector" basis. Aluminum was one of the sectors identified
for this approach but unfortunately this approach was not pursued adequately.
The Association continues to believe that in an industry as complex, as interna-
tional, and as dynamic as aluminum a sectoral approach holds promise for sig-
nificant steps toward expansion of aluminum trade.
INTERNATIONAL CHARACTER OF THE ALUMINUM INDUSTRY
The Association's recommendations as summarized above are based on the
special characteristics common to the aluminum industry both in the United
States and in Canada and overseas:
1. The major aluminum companies have substantial and growing foreign in-
vestments which are seriously affected by such factors as availability of resources
including bauxite resoures. costs of electric power, and access to mass markets.
The existence of trade barriers, whether of a nontariff or of a tariff variety, is also
an important consideration in investment decisions by reason of their effect on
market access.
2. United States exports of aluminum have risen rapidly during the last ten or
fifteen years, despite the restraints imposed by various trade barriers. Thus, the
marketing and sales activities of the North American aluminum industry may be
fairly described as already substantially international in character.
3. Aluminum technology has been internationalized to a highly significant
degree. Thus, since no producer has a significant technological advantage, market
development activities cannot fail to benefit all producers. It is shortsighted,
therefore, to adopt restrictive practices which inhibit market development.
EQUAL OPPORTUNITY TO COMPETE
In the hearings on the Trade Expansion Act of 1962, spokesmen for the
Aluminum Association emphasized the `importance of `securing equal access (i.e.,
equal opportunity to compete) to aluminum markets abroad. Indeed, the Associ-
ation proposed at that time that `the statement `of purposes in the 1962 `legisl'aion
should include a's a specific objective in trade n~go'tiation's the achievement of
equal access for American products in foreign market's. Unfortunately, in our
view, this recommendation was not adopted, pa'etly because it was believed that
this `specific objective was embraced within the scope `of ~ther, more broadly
stated objectives.
The Kennedy Round negotiaitions did not go far enough in eliminating in-
equities affeeting aluminum foreign trade. Most aluminum tariffs of the major
industrial nations were lowered `and in some eases the gap between the generally
lower United States tariff and `the higher foreign tariff was narrowed. However,
there were important instances in which the gap or disparity was actually
widened. This wa's especially true with respect to the European Common Market
which, next to the United States, is `the largest market for `aluminum in the
world.
It is particularly significanlt that the most important United States negotiating
objective with respect `to aluminum tariffs, i.e.. a reduction `of `the C'omm'on Mar-
ket ingot tariff, was not achieved during the Kennedy Round negotiations. Ingot
is `the `largest product group involved in `aluminum foreign trade, whether one
looks at the import `side `or the export side. The EEC `aluminum ingot tariff stood
at 9% ad valorem prior to `the Kennedy Round and remains at that level today
with the fo'U'owing technical exception: In the Kennedy Round the EEC agreed
to bind `an EEC quota of 130,000 tons per year at 5% `ad valorem whereas prior
`to `the Kennedy Round negotiations there was a year-to-year 5% `tariff quota for
the individual members `of the `Common Market. On the other `hand, the United
States agreed during the Kennedy Round to reduce its ingot tariff by 20%. The
net result wa's `that `the Kennedy Round worsened the United `States tariff position
in aluminum ingot as compared to `the EEC. Thus, the EEC tariff prior to the
Kennedy Round was 60% `higher than `the United States tariff. The EEC tariff
is now more than 100% higher `than the United States tariff.
In the light of the foregoing the Aluminum Association feels justified in reiter-
PAGENO="0229"
3829
ating its basic recommendation regarding trade policy: The United States should
seek to establish conditions for equal opportunity to compete in all major alum-
inum markets. There is no justification for differentials in tariff rates and other
trade restrictions among the major industrial countries. We believe, therefore,
that tariff levels in particular should be reduced to the lowest possible levels. How-
ever, we call attention to the fact that the equal opportunity principle also im-
plies that if other major aluminum trading countries or trading blocs such as
the European Common Market refuse to reduce aluminum tariffs, then the United
States should be prepared to adjust its tariff upward to achieve equality. It should
be noted that the trade agreements program since its inception in 1934 has pro-
vided authority for the President to negotiate upward adjustments in `tariffs
as well as downward adjustments. This authority should be used when necessary
to promote equality. In this connection the Association believes that the Presi-
dent's proposal in Section 203 of the pending bill (H.R. 14870) to amend Section
252 of the Trade Expansion Act of 1962 is highly desirable and indeed long over-
due. As presently written Section 252 permits the President to impose additional
duties or other import restrictions on the products of any foreign country which
maintains unjustifiable restrictions "against United States agricultural prod-
ucts.' The President has proposed that the word "agricultural" be deleted so that
the President will have the power to take forceful action against unjustifiable
foreign restrictions against any United States products. The Association strongly
supports this change.
THE SECTORAL APPROACH
During the Kennedy Round negotiations Eric Wyndham-White, the Director
General of GATT, came to the conclusion that special progress in dealing with
foreign trade problems could be made in certain sectors of industrial production.
Specifically he pointed out that the sectoral approach should be productive of
negotiating progress in industries "characterized by modern equipment, high
technology and large scale production, and by the international character of their
operations and markets This approach was considered in a tentative way
for aluminum among .other industries during the Kennedy Round negotiations
but was not pursued. The Association continues to believe that sectoral negotia-
tions offer promise.
IMPORT QUOTAS
The major nontariff barrier affecting aluminum trade is the import quota. In
1968 when testimony was presented to this Committee on behalf of the Associa-
tion, this problem was discussed at length. We quote below from that testimony
since it is still entirely relevant:
"Another nontariff barrier issue-one that has been receiving increasing
attention at home-is that of import quotas. The interest of The Aluminum
Association in this subject derives from the fact that aluminum foreign trade
takes place in the same economic and political climate as does other United
States foreign trade. Thus, major developments in other industries also affect
aluminum foreign trade conditions. For example, the United States-EEC Kennedy
Round controversies over agriculture undoubtedly added to the United States
negotiators' difficulties in dealing with the EEC on aluminum. Similarly, the
current efforts of some domestic industries to obtain import quotas are bound
to influence the policies and practices of those nations which feel that such quotas
would restrict their sales in the quota-protected markets."
"Many of the quota-sensitive countries also export aluminum products to the
United States and, to some degree, are markets for United States aluminum ex-
ports. Quota action for other United States industries could thus have a two-
way effect on United States aluminum foreign trade: (a) heavier imports of
aluminum or aluminum-containing products into the United States than the
domestic market could absorb in healthy fashion, and (b) more difficulty in
maintaining or expanding United States exports of aluminum or aluminum-
containing products."
"Should import quotas be established by the United States for other major
domestic industries, fairness would require safeguards for the United States
aluminum industry from the possible repercussions of such quota action. Alumi-
num tariffs are low here, and there are virtually no tariff barriers to keep im-
ports out. Without appropriate safeguards, foreign nations seeking dollar ex-
change, but kept out of other product markets in the United States by quotas,
might concentrate disproportionately on selling in the readily accessible alumi-
nuni markets here. This type of import, stimulated by frustration elsewhere
rather than by regular business competition, would not make for healthy foreign
trade in aluminum."
PAGENO="0230"
Acme Aluminum Foundry Oompany.
AE Division, Hoover Ball and Bearing
Company.
Alcan Aluminum Corporation.
Alloys and Chemicals Corporation.
Aluminum Limited, Incorporated.
Aluminum Casting & Engineering Com-
pany.
Aluminum Company of America.
Aluminum Mills, inc.
Amax Aluminum Company.
American Aluminum Casting Co.
Anaconda Aluminum Company.
Anaconda Wire and Cable Company.
Arc Products Manufacturing Division.
Archer Products, Inc.
P1w Arcola Wire Company.
The Castings Corporation.
Clendenin Bros., Inc.
Cliff Manufacturing Company.
Club Products Company.
Coilyer Insulated Wire Company.
Copperweld Steel Company.
Detroit Gasket & Manufacturing Com-
pany.
Eastern Casting Corporation.
Ekco Products Inc.
Fischer Castling Company, Inc.
Foote Mineral Company.
General Cable Corporation.
Harvey Aluminum (Incorporated).
The Harvey Metal Corporation.
Heillg Brothers Company.
Howmet Corporation.
Intalcb Aluminum Corporation.
Kaiser Aluminum & Chemical `Corp.
Mansfield Brass & Aluminum Corpo-
ration.
Mideast Aluminum Industries Corp.
Midwest Aluminum Corporation.
Minalex Corporation.
National-Standard Company.
National Steel Corporation.
New Jersey Aluminum Company.
New York Wire Company.
Nichols-Home~hield, Inc.
Noranda Aluminum, Inc.
Oberdorfer Foundries, Inc.
The Okonite Company.
Olin Corporation.
Permold, Inc.
Phifer Wire Products, Inc.
Revere Copper and Brass Incorporated.
Reynolds Metals Company.
Ross Pattern & Foundry, Inc.
Russell Aluminum Corporation.
Saramar Aluminum `Company.
Schick Products, inc.
Scovill Manufacturing Company.
S-G Metals `Industries, Inc.
Simplex Wire & Cable `Company.
Southwire Company.
Straua'han Foil Company, Inc.
Texas Aluminum Company, Inc.
Triangle Conduit & Cable Co., Inc.
United Aluminum Corporation.
U.S. Reduction Co.
V.A.W. of America, Inc.
Warner Mfg. Corp.
Wellm'an Dynamics Corporation.
Wells Aluminum Corporation.
Wolverine Tube Division, Universal
Oil Products Company.
Wyman-Gordon Company.
3830
"Because of the pressure of governmental policies, we can no longer take for
granted that the international market place can make adjustments rapidly
enough or sufficient to assure healthy competition or the most efficient utilization
of natural and human resources. Nevertheless, trade policy should favor, as
much as possible, reliance on business competition, rather than on governmental
regulation."
"When national interest or the basic health of an essential industry does re-
quire the intervention of governmental regulation, it should be a's temporary
and flewible as possible. Accordingly, limitations on imports should not take the
form of fixed `ceilings' over extended periods."
"It may prove necessary, in specific instances, to place temporary and reason-
able limits on market participation by imports when disparate national policies
undermine the conditions of international business competition. However, com
peting domestic and foreign suppliers should have the incentive and opportunity
to increase their shipments to a market, and even to increase their share of that
market. The emphasis should be on flexibility and on providing the opportunity to
stimulate, and participate in, market growth."
We are grateful for the opportunity to present the views of The Aluminum
Association.
APPENDIX "A".-NATTJRE OF THE ALUMINUM ASSOCIATION
The Aluminum Association is a non-profit, unincorporated organization com-
posed of companies within the Un'ited States engaged in the production and fab-
rication of aluminum. The Aluminum Association was tu~ganized in 1935 to
promote the general welfare of the aluminum industry, its members, and all
others `affected by it, and to increase the usefulness of the industry to the general
public. As of the present time, the Association is comprised of 69 members ac-
counting for nearly 100 percent of the primary aluminum production in the
United States `and manufacturing roughly 80 percent `of the country's semi-fab-
ricated aluminum products. The following companies are members:
PAGENO="0231"
3831
REYNOLDS METALS COMPANY,
Washington, D.C. June 26, 1970.
Hon. WILBUR D. MILLS,
Chairman, Ways and; Means Committee,
House of Representatives, Washington, D;C.
DEAR CHAIRMAN MILLS: In the area of trade policy, the position of the United
States primary aluminum industry, including that of Reynolds Metals Company,
has been and continues to be in support of free access by all producers to all
markets of the world.
The domestic industry believes that there is no justification for a differential
in tariff rates and other trade restrictions applicable to aluminum among the
major industrial countries. What is needed is the establishment of conditions for
equal opportunity for all nations to compete in all major aluminum markets
throughout the world.
Implicit in this position is the elimination of tariff and non-tariff barriers in
all countries trading in aluminum. In the case of primary aluminum, which is
by far the largest product group in aluminum foreign trade, the United
States tariff already is less than one-half that of the current tariffs of other
major aluminum trading countries, including Japan and the European Common
Market.
The first step in reaching the objective of equal access must be the equaliza-
tion of the differentials in such tariffs~ and non-tariff barriers. In other words,
the gap between the rate of duty which exists between the United States on the
one hand, and the combination of tariffs and non-tariff barriers of other major
aluminum trading countries and blocs on the other, must first be eliminated.
Until this has occurred the United States Government should not consider a
further reduction in the United States aluminum tariff. Once tariff parity has
been achieved, then the United States and the other aluminum trading countries
and blocs could move together pursuant to a mutually agreeable timetable to
the ultimate elimination of the remaining tariffs and non-tariffbarriers.
It is respectfu1ly requested that this letter be included in the Record of the
current hearings before the Ways and Means Committee.
Sincerely,
MAXWELL CASKIE,
Vice President.
STATEMENT OF ERIC A. TRIGG, PRESIDENT, ALCAN ALUMINUM CORPORATION
The United States aluminum industry is deeply engaged in the foreign trade of
the United States, as well as the trade of other countries. The industry, of which
Alcan Aluminum Corporation is a part, is therefore concerned with certain legis-
lative proposals before the Committee. In this statement Alcan presents a brief
outline of certain aspects of trade in the aluminum industry and makes two sug-
gestions respecting provisions of bills before the Committee, which affect the
aluminum industry.
Alcan Aluminum Corporation is one of the larger aluminum fabricators; its
main office is in Cleveland, Ohio. It is the United States operating unit of Alcan
Aluminum Limited of Montreal, Canada. It has 12 fabricating plants in seven
states, employs 5,000 employees and operates 17 metal service centers. It is the
largest user of aluminum ingot produced by the Aluminum Company of Canada,
Ltd. It is also the largest U.S. exporter of semi-fabricated products.
Until recently total U.S. imports of, primary aluminum and aluminum products
historically exceeded exports. As the re.sult of the strong demand in other coun-
tries, total U.S. aluminum exports for the first quarter of 1970 exceeded imports
by a substantial margin. On the other hand, bauxite is largely imported and im-
ports of alumina are increasing.
The multinational character of the aluminum industry is probably well known
to the Committee. Alcan has operated on an international basis for over forty
years and today each of the other major aluminum companies operating in the
U.S. also conducts its business on a world basis. The amount of primary aluminum
capacity outside the United States with which U.S. primary producers have
affiliations totals more than 900,000 tons, which output is greater than the
aluminum capacity of any single country of the free world other than the United
States and Canada, and equal to 24% of U.S. domestic aluminum capacity.
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We know of no case of a primary aluminum plant in any country of the free
world which has ceased operating in the last twenty years. Most of them have
been expanded or modernized and 44 new primary aluminum plants have been
completed in the free world since 1950, a capital investment of some $5.5 billion.
The U.S. industry and the users of aluminum have benefited as a result of this
multinational development. The number of primary aluminum producers here
will have grown from three in 1947 to fourteen by the end of 1971.
Independent fabricators in the United States have seen their share of the mill
product market rise from less than 5% in 1952 to 32% in 1969. Many of these
fabricators rely on imported aluminum and as a group get about a quarter of
their primary aluminum from foreign sources.
The principal products of the aluminum industry moving in world commerce
are bauxite, the ore of aluminum-approximately 25 million tons a year; alu-
mina, the intermediate producit-6 million tons; primary aluminum-2 million
tons. Bauxite and alumina rank fourth among the leading dry bulk cargoes in
world commerce. Foreign commerce in these basic products of the aluminum in-
dustry are a high percentage of total world production of these porducts, perhaps
higher than for any other basic industry, except petroleum. Trade in primary
aluminum between nations of the free w-orld has quadrupled since 1955.
However, only a relatively small percentage of the fabricated aluminum prod-
nets-sheet, foil, extrusions-move in w-orld commerce. Most of these products
are used in the country of area of manufacture because of freight costs and appli-
cations specialized to the particular user.
Once all the tariff reductions agreed to in the Kennedy Round are in effect,
there w-ill be no duty on bauxite in any of the major consuming areas. Tariff
duties in alumina and aluminum will be as follows:
United States
(per ton)
EEC
(percent)
Japan Un
(percent)
ited Kingdom
(percent)
Alumina
Aluminum
$2.40
20.00
8.8
(1)
0
9
8
0
1130,000 mt. at 5 percent, remainder at 9 percent.
Note: On an ad valorem basis the U.S. duties were in 1969 equivalent to 3.86 percent in the case of alumina and 4.3
percent in aluminum.
These tariff duties serve no useful function. They add to the cost of production
and are therefore inflationary. The duties are vestiges of the local and national
condition of the industry before it became multinational.
It is well known that the world aluminum industry requires very large capital
investment; its prices and its profits are relatively low. During 19G4-68 the aver-
age profits after tax of the four largest aluminum producers, including Alcan,
were 9.4% on shareholders' equity, compared with 12.4% for U.S. manufacturing
industry as a whole. Tariff duties amounting to millions of dollars are, therefore,
particularly burdensome on the earnings required for growth. The industry and
the users of aluminum would benefit if the duties were removed.
The United States is the world's largest importer of alumina, as well as a lead-
ing exporter. Imports in 1969 amounted to 1,700,000 tons, most of which came
from Australia and Surinam. The U.S. also exported almost a million tons. The
U.S. duty on alumina when used to produce aluminum is suspended under P.L.
90-615 until July 1971. If the U.S. alumina duty is not removed or suspended, the
duties on imports into this country will be a heavy burden on these companies
importing.
Alumina imports into tile Comm ois Market in 1969 were 300,000 tons, mostly
from Surinam and Guinea. The plans for building large amounts of new alu-
minum capacity in the Common Market by T5.S.-affihiated companies and others
may result, unless compensated by equivalent alumina capacity, in increased
imports of alumina. At 8.8% on an assumed dutiable value of $60 a ton, the duty
will be $5.28 a ton and thus a burden to the development of aluminum consump-
tion in the Common Market.
It should be mentioned that the Common Market duty on alumina will be 5.5%
by 1972 instead of 8.8% if Congress revokes the American Selling Price provision.
Japan is neither a large importer nor exporter of alumina; it imports bauxite
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3833
which is free of duty in that country. The United Kingdom, when `it becomes a
major aluminum producer next year, will be an importer of alumina. Only one
of the three smelters being built there will be supplied by alumina produced with-
in the country. The U.K. duty of 8% is not applied to imports from Common-
wealth sources, nor from EFTA countries, but will apply to alumina from the
United States. The U.K. is seeking admission into the Common Market and the
duties on alumina and aluminum entering the U.K. may change. Norway relies
entirely on imported alumina, but has no duty on the product nor on aluminum.
Its imports of alumina too would be affected if it joins the C~mmon Market.
The situation regarding tariff duties on primary aluminum in the major coun-
tries is similar to alumina. Both the U.S. and the Common Market, as well as
Japan, are major importers of aluminum and the duties on aluminum in these
areas are unnecessary and financially burdensome. The United States is a major
supplier of aluminum to Common Market countries while imports into the U.S.A.
come mainly from Canada and Norway.
The two principal bills before the Committee, HR-14870 and HR-16920, fail to
provide the `President with sufficient authOrity to negotiate to remove these du-
ties, either with respect to the U.S. or to major foreign countries. As indicated,
U.S. duties on alumina nn'd aluminum are on an ad valorem equivalent to `less
than 5% `but exceed the 2% level suggested in HR-14870.
We believe that the legislation being considered `should include an affirmative
program to roduce `some tariff duties, and we suggest `that the authority which
was contained in the Trade Expansion Act of 1962, Section 202, authorizing the
President to reduce `or `remove entirely rates `of duty amounting to less `than 5%
ad val'orem or its equivalent, should be `included in the legislation under con~id-
erat'ion. Such `low `rates `serve no purpose `on most products and in connection
with `the aluminum industry, where `the volume `of foreign tnt'de is `so groat; such
rate's `on alumina `and primary `aluminum represent `a wholly unnecessary `and
onerous burden `on the industry with n'o benefit `that we can see `to any `domestic
manufacturing or `labor interest.
We also `suggest that authority, perhaps limited, `should be given to the Presi-
`dent `to `reduce certain U.S. tariff duties without `necessary regard to compen's'a-
tion or offset `to `any increase in other duties made as a result `of escape clause
proceedings. We refer `t'o `those `situations where only part of the President's
Tra'de Expansion Act t'uthori'ty to `reduce `the U.S. `duty was used in the Kennedy
Round. This `occurred with respect `to primary `aluminum where `the rate was
reduced `by `only 20%.
W'e hope `that this brief `outline of `the ctrcumstances in `the aluminum industry
will prove `helpful to `the Committee and tha't the Committee Will consider our
suggestion's concerning the proposed `legislation. We `believe `that `the United
State~s should continue `its leadership in moving `towards freer world trade in
alumina and aluminum and `th'a~t in `such `effort's `the basic `materials of the `alu-
minum industry-bauxite, `alumina and, primary aluminum-should be foremost
in such considerations.
Mr. BURLESON. The committee will adjourn until 10 o'clock tomor-
row morning, June 12.
(Whereupon, at 4:05 p.m. the committee was adjourned, to recon-
vene at 10 a.m., Friday, June 12, 1970.)
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