oncentrates The proposed tax (60 percent) is equivalent to $66 per ton, or a total tax of 2,904,000 on the 44,000 tons exported. (2) Peru, during the last war, supplied large quantities of lead and zinc the United States, in order to help in the war effort. Huge capital investents were made for this purpose. The proposed law, however, would make almost impossible for Peru to sell these raw materials in the United States. or example, the present price of Peruvian zinc is 11 cents a pound f. o. b. ast St. Louis, Ill. This zinc, under the proposed legislation, would be subject a tax of 51⁄2 cents per pound. Hence, the Peruvian producer would receive ly 5% cents gross per pound for his zinc, a price which does not even cover esent transportation, smelting, and refining expenses of 8% cents per pound. he lot of the Peruvian lead would not be much better. (3) It is evident that the proposed tax would exclude Peruvian zinc and ad from the American market. This situation would immediately affect our reign trade and national economy. First, this would bring about the forced utting down of the mines in the Andean region, with the attendant unemployent of thousands of workers who will not be able to find jobs in other indusies. Secondly, the loss of about $46,555,000 in dollar exchange, which was e value of our lead and zinc exports in 1952, would tend to reduce the volume our imports from the United States. In this respect, the proposed legislation ems to run counter to the announced policy of the present administration of rade, not aid." (4) On the other hand, sliding-scale tariffs would lead to violent fluctuations the prices of lead and zinc. Supplies would be withheld from the United ates market when the price is low and the tariff is high, and unusually large ipments would come into the United States when the reverse is the case. his alternating condition of feast and famine would work to the disadvange, in the long run, of both the consumers in the United States and the proicers outside the United States. Logically, such conditions would discourage e investment of capital by United States nationals in such countries as Peru, here large undeveloped potential supplies are believed to exist. The effect this violent fluctuation in prices might be magnified and accelerated in the onomy of countries which are the source of supply in the United States for rge quantities of these important raw materials. (5) The proposed legislation admittedly might result temporarily in higher rices for lead and zinc in the United States. But if the effect were to encourage e use of substitutes for these metals, the long-range result would be distinctly armful to the lead and zinc industry everywhere. For these reasons, the Peruvian Government expresses the hope that the ongress will not see fit to adopt the proposed legislation and that the Deartment of State will exercise its good offices toward this end, in order to ard off this serious threat to the very existence of the Peruvian lead and zinc dustry. WASHINGTON, D. C., April 24, 1953. C/R file: 411.233/4-2453 DEPARTMENT OF STATE, DIVISION OF LANGUAGE SERVICES MBASSY OF MEXICO: The Ambassador of Mexico presents his compliments to His Excellency the ecretary of State and has the honor to inform him of his Government's concern ver the part of the Simpson bill (H. R. 4294) which refers to the establishment f a graduated rate of duty on imports of lead and zinc. A very serious aspect of the proposed rate is that the tax increases as the price uotation for the respective metal goes down. Under these circumstances, the Mexican producer's situation will become doubly aggravated. In the case of uotations for lead and zinc a few cents lower than present prices, say $0.09 er pound, the proposed duty will affect Mexican production of lead and zinc o deeply that it will force the closing of many mines, with serious damage to The economy of Mexico. The United States Government is not unaware of the following circumstances: 1. Mexican production of lead and zinc is exported almost entirely to the nited States and constitutes the most important branch of the Mexican mining 32604-53-123 industry. Moreover, the mining of lead and zinc produces considerable amours of gold, silver, copper, and cadmium, so that the proposed rates on lead and z2 will affect all the metals which constitute essentially the mining production Mexico. 2. At the recent quotations for lead and zinc, 132 cents (United States ez rency) per pound in New York and 11 cents (United States currency) per pun in East St. Louis, respectively, it is estimated that the proposed duty will ca a reduction of 103 million pesos in the value of Mexican production of these: metals, which amount will go to the United States Government and of wa amount the Mexican mining industry would lose about 83 million pesos and th Government of Mexico 20 million pesos, through the drop in tax collection. 3. Even though more than 80 percent of Mexican production of lead and r comes from mines controlled by American companies, the unfavorable effect c the closing of these mines or the reduction of their activities would fall aims 100 percent upon Mexican workers, creating unemployment which would a doubtedly have repercussions on the general economy of the country. 4. Mining in Mexico is of great importance to the industrial development of the United States and this is shown by the cooperation which Mexico has receive from this country in the search for and development of Mexican mining resouros 5. Should the United States put into effect the increased duty on imports lead and zinc, it is unquestionable that the price in other world markets wi decrease in proportion to those duties, because this country's normal consump tion of world production will be eliminated, and it will be found detrimental Mexico to attempt to divert its production of lead and zine to other markets 6. Lead and zinc occupy second and third place among Mexico's exports. Int year 1952, exports of refined lead amounted to 635,828,012 Mexican pesos al those of zinc, in ore and concentrates, amounted to 411,091,305 Mexican pese Should the proposed increases in import duty on these metals be put into effet Mexico's exports would decrease considerably and would cause not only a pr portional decrease in the purchases that Mexico would make in the United Sta but also serious dislocations in its balance of payments the scope of which s difficult to foresee. 7. During the last World War, Mexico contributed to the cause of the dem cratic nations by sending, at ceiling prices fixed by the United States, lead. and all kinds of metals, a situation which continued until a few months ago, t ing the emergency period caused by the war in Korea. 8. Mexico has been supplying scarce strategic materials to the United Stat such as cadmium, fluorite, and others, allowing their exportation at nota rates and even reducing them, as in the case of fluorite. 9. When in past months the United States urgently demanded lead and zi the Mexican tax rates remained unchanged, notwithstanding that the prices these metals in European markets were higher than the ceiling prices fixed the United States, where practically the entire Mexican production of metas was sold. Mexico did not resort to the expedient of requisitioning the la from the companies in order to gain the advantage which the difference in pr meant. The Ambassador of Mexico sincerely trusts that His Excellency the Secrets? of State will accord friendly consideration to the points set forth in this note 27 that careful examination of them will lead him to the conviction that the 7′′ posed increase in import duties will not only have repercussions on the econ of a country which, like Mexico, is glad to maintain and expand its trade r tions with the United States, but also almost certainly affect, to the detriment the two Republics, those relations, which constitute a valuable factor of coope ation between Mexico and the United States of America. WASHINGTON, D. C., April 30, 1953. LOS ANGELES CHAMBER OF COMMERCE, May 13, 1953 Hon. DANIEL A. REED, Chairman, House Ways and Means Committee, House Office Building, Washington, D. C. DEAR REPRESENTATIVE REED: In connection with the current hearings of the Ways and Means Committee on the Reciprocal Trade Agreements Act, we went like to submit the views of this chamber. After considerable study and discussion, the board of directors of the Los geles Chamber of Commerce has again voiced its approval of the reciprocal de agreements program and has specifically gone on record as favoring the tension of the present act for at least 1 year. Now, as in the past, this chamber pports in principle the reciprocal trade agreements program with retention of e legitimate safeguards of domestic industries, agriculture, and labor. We hope your committee will see fit to report out favorable legislation extendg the Trade Agreements Act for another year without crippling amendments. We would appreciate your incorporating this letter in the hearings record. Sincerely, R. M. HAGEN, President. UFFALO CHAMBER OF COMMERCE STATEMENT ON H. R. 4294 To EXTEND THE TRADE AGREEMENTS ACT AND FOR OTHER PURPOSES This bill, extending the Trade Agreements Act for another year, would so strict the President's power to negotiate tariff agreements that it would do many years' past work of developing our present system of flexible tariffs. In making mandatory the Tariff Commission's recommendations on the "peril int" system and the “escape clause" provisions, the bill could severely hamper "trade, not aid" policy upon which European nations are depending for their onomic rehabilitation. By imposing mandatory duties on lead and zinc and by setting a quota system the importation of petroleum products, the bill would hinder trade agreeents from being concluded which under our present laws could be based on anging conditions. The Reciprocal Trade Agreements Act should be extended for a substantial riod of time but without such extreme conditional restrictions. SAN FRANCISCO CHAMBER OF COMMERCE, on. DANIEL A. REED, San Francisco 4, Calif, May 8, 1953. Chairman, Ways and Means Committee, House of Representatives, MY DEAR MR. REED: We have just learned that your committee has commenced earings on the renewal of the Reciprocal Trade Agreements Act. We wish to ke this opportunity to make our views known to your committee. The World rade Association of this chamber of commerce concurs in the views expressed rein. The subject of reciprocity in trade originated in this chamber of commerce 1932. Since that time we have consistently supported a liberal trade policy ad a continuation of the reciprocal trade agreements program as we have felt at this is a proper procedure to secure the reduction of excessive tariffs and elp in the removal of trade barriers including quotas, exchange, and other ontrols. We are confident that the reciprocal trade agreements program has chieved these objectives and must be maintained on as liberal a basis as possible. Since January 1, the chamber's world trade committee and World Trade Assoation have given extensive study to a revision of our chamber's policy stateent of 1944 and this revision has just been completed and approved by our irectors. In its present mimeographed form the document is too lengthy to ubmit to your committee for its consideration, but we are attaching a sumary of the various subjects covered in our current declaration as compared with mat issued in 1944. We have taken from our current declaration the full statement with regard o reciprocal trade agreements and the general agreement on tariffs and trade. n this statement it will be observed that we recommend a continuation of the rade agreements program for at least a 4-year period, preferably without expiraion date and in its present form. We feel this is necessary in order to mainain a continuity in our international trade policy to assure the European counries in particular that our trade policy is long range and not subject to shorterm changes motivated perhaps by political expediency which result in lack of onfidence on their part. We are aware that President Eisenhower has requested an extension of the Trade Agreements Act in its present form for 1 year to permit full and com plete study of all phases of the program, its objectives and operations, W are in accord with the President's desire. We also recommend that the escape-clause and peril-point provisions, wher have been operating as a means of curtailing prompt action under the tri agreements policy, be reviewed with a view to simplifying procedures and avoidance of delays in administration of the act. This will be accomplished the study proposed. Present legislation before you appears to add additional amendments whi in effect may make the trade agreements program less effective. Without goi into detail on these we urge that your committee endeavor to keep in m the efficient administration of the act and the reaction abroad to additio amendments that may make the principle of reciprocity ineffective and the ai ministration of the act more cumbersome. Many proposed revisions require mandatory actions on the part of the Pres dent, thus limiting the freedom of the executive branch to act in matters wi have an overall bearing or influence on our foreign policy as a whole. It appea these new restrictive amendments are designed to defeat the purpose of t Reciprocal Trade Agreements Act. The President has already expressed 2 opposition to the several mandatory provisions. The provisions to estabs, quotas on imports of petroleum appears unnecessary especially on the Pri coast where current production and stocks of crude are at a minimum 5 such imports have been necessary for some time. Furthermore, such restrict in of imports may seriously affect the economies of such countries as Venezne and Indonesia by restricting their ability to earn dollars needed to pay f essential equipment and supplies purchased in the United States. Attached please find editorial and cartoons on this subject, which appea in the San Francisco News (Scripps-Howard) of April 29 and 30, which we we like to have made a part of the record.' We shall appreciate your consideration and that of the committee regards these recommendations. Very truly yours, J. W. MAILLIARD III, President. CHAMBER OF COMMERCE OF FORT WAYNE, Representative DANIEL A. REED, House Office Building, Washington, D. C. DEAR REPRESENTATIVE REED: Your committee is currently conducting hear on the extension of the Trade Agreements Act, due to expire on June 12. would like to give you our views in connection with this legislation. Consideration of the United States policy in foreign trade today extends beyond the original concern for the welfare of our domestic economy. concern must now include a consideration of the welfare of the economy of entire free world, and the effects of American trade policy on the economies of all free nations. Developments since World War II have made it necessary for many nations" obtain from us foodstuffs and other necesities which they formerly obtained fr lands now behind the Iron Curtain. If we are to supply these allies with the basic requirements, we must either pay the cost of this ourselves at the expe's of our taxpayers (which we have been doing), or we must place these pe in a position where they can pay with goods for the cost of things they have, not only for their own survival, but also to bear their share of the cost the free-world defense. The trade-agreements program is only one phase of our overall foreig nomic policy. The success of this program in the final analysis will be depende.. upon the accomplishment of other related steps which must be taken. In light of the overall situation today we believe: (1) The trade Agreements Act should be extended for a period of 3 ye to prevent a return to the application of the Hawley-Smoot Tariff Act of 15(which would become applicable if the present act is allowed to expire), 12 to furnish a stable basis for trade during a period in which a long-range progra. 1 Also enclosed is an editorial from a recent issue of the San Francisco Chronicle. (The material referred to herein is filed in the committee office.) an be developed. This will stimulate confidence in the program on the part of hose foreign countries with which we may negotiate. (2) The extension of the act should broaden the authority of the President grant tariff concessions beyond the present limits. The present 50-percent imitation of rates in effect on January 1, 1945, bears little relation to actual ariff needs today. It substantially restricts the scope of possible trade negoiations, and also narrows the area of any further negotiations. (Less than ne-half of the authorized reduction authority remained unused by 1951.) (3) Reasonable modification should be considered of the peril-point and scape-clause sections of the act, in order to bring these more in line with the pirit of reciprocal reduction of trade barriers and with emphasis on the proection of the national interest. In our sincere desire to help other countries strengthen their respective econonies, care must be taken not to destroy our own economic strength. While the 5 billion gap between imports and exports in this country can and should be arrowed, it is essential that we maintain a profitable trade balance at all times. This factor should be a major criterion in any action taken by the Tariff Comaission or executive branch of our Government. A long-range program should be adopted in terms of our present and future esponsibilities. Such a study should include the overall problem of foreign rade in its relationship to national security and the needs of the domestic conomy. It will necessarily include a revision and modernization of our entire ariff structure. It should also include the following considerations: (1) Removal of tariff consideratons from political pressures. (2) Inconsistency between our agricultural and trade policies. (3) The costly and cumbersome customs procedure. (4) The operation of the so-called buy American acts. (5) Better correlation of the administration of our overall program to avoid conflict and overlapping between various agencies involved. (6) Elimination of the very serious barriers to American private investments broad, and adequate protection for such investments. (7) Stabilization of foreign currencies. (8) Increased standardization along certain lines, to permit broader interhange of foreign-made products, both between foreign countries and the United States. (Some Commission similar to our own Bureau of Standards should work on this problem from an international standpoint.) This is one of the most complex and important problems facing Congress today. We know it will have your thoughtful and serious attention, and we will appreciate your consideration of our views. Sincerely yours, WARD E. DILDINE, Chairman, National Policies Committee. [The Detroiter, May 25, 1953] AN OPEN LETTER TO CONGRESS No one will deny that a reduction in tariff barriers will expose some American irms to greater competition, but this in itself is no argument against lower ariffs. Against an injury to a single business or industry must be weighed the benefits which will accrue to consumers, to export industries (which employ many more people than the protected industries in question) to the economy as whole, and to the free world. Protectionist groups which have appeared before the House Ways and Means Committee do not reflect either business or public opinion. There was a time when the business community was protectionist in viewpoint. That is no longer rue. The United States Chamber of Commerce, representing some 11⁄2 million usinessmen, the Detroit Board of Commerce, the National Foreign Trade Counil, the United States Council of the International Chamber of Commerce have ll declared themselves for freer trade. A recent survey made by the Council on reign Relations of the views of leading citizens in 25 cities showed, in the great majority of cases, including those of businessmen, a solid rejection of the rotectionist thesis. |