a few million pounds of foreign beef in a falling market can have a disastrous effect on cattle prices in this country. In the General Agreement on Tariffs and Trade signed at Geneva, Switzerland, October 30, 1947, and effective January 1, 1948, the import duty on beef and veal, fresh, chilled and frozen, was reduced from 6 cents to 3 cents per pound-a reduction of 50 percent. The former rate of 6 cents per pound had been in effect since 1930—a period of 17 years. During the period from 1930 until 1948 dressed beef and veal imports from Canada to the United States averaged less than one-half million pounds a year. After January 1, 1948, the Canadian packer found that the reduction in the United States import duty from 6 cents to 3 cents per pound enabled him to enter the United States market and sell his product at a price below the cost of production in the United States. Therefore, imports of Canadian dressed beef and veal into the United States increased from 28,791 pounds in 1947 to 71,634,000 pounds in 1948. By 1949, imports of Canadian dressed beef and veal jumped to 74,534,000 pounds and in 1950 were close to 100 million pounds. The 50-percent reduction in the import duty caused a serious situation for the United States meatpacker in an area like Seattle which receives large quantities of Canadian beef and veal. The Seattle packers have wage rates 29 percent higher than their foreign competitors in Vancouver, British Columbia. For some jobs, such as splitters, beef trimmers, and sausage stuffers, the rate in Seattle was 35 percent higher than in Vancouver, and for power-saw splitters and truckdrivers the differential in rates was more than 50 percent. The Canadian packer is also favored by the fact that he can purchase livestock at a lower cost than his United States competitor and his overhead costs are lower. A little research work will show that the United States meat-packing industry profits are extremely low in contrast to other industries. Meat-packing profits average about seven-tenths of 1 percent for each dollar of sales. Packers make less margin that any other major industry, based on percent of sales or percent of net assets. Consequently, the reduction of the import duty from 6 cents to 3 cents per pound in 1948 has severely damaged meat packers in the United States, especially in the Seattle area and in other areas near the Canadian border who have found Canadian beef and veal selling in their markets at prices below the United States cost of production. In 1950 the Western States Meat Packers Association made an application to the United States Tariff Commission for an investigation of injury to the domestic meat-packing industry resulting from the reduction of the import duty. We petitioned the Tariff Commission for relief under the escape clause procedure. Our application was filed on March 16, 1950. In June we were notified that 3 Commissioners voted for our petition and 3 voted against it. Thus we received a tie vote, which under the Commission rules meant that there would be no investigation of injury to the domestic meat packers, and no consideration given to our request that the trade concessions made on fresh and frozen beef and veal be withdrawn and that the 6 cents per pound import duty in effect prior to January 1, 1948, be restored. In order to eliminate tie votes in the future we favor the provision beginning on page 21, line 11 of H. R. 4294, which states that the Tariff Commission shall be composed of 7 Commissioners appointed by the President by and with the advice and consent of the Senate. We favor the features of H. R. 4294 which would permit a great use of import quotas, broaden the peril point and make it easier to raise tariffs when a showing of injury to American producers and workmen is manifested. It is evident that expanding trade between nations is a good thing, only when it is mutually advantageous to each country. When other countries reduce their tariffs and barriers and increase their payment to labor as we have done, we will be in a position to work out some further reductions in our own tariffs. Our first responsibility is to the citizens of America. The few huge United States corporations and the foreign cartels that would benefit from further reductions in the United States tariffs should not be permitted to enrich themselves at the expense of the American people. We hope this committee will vote in favor of H. R. 4294 because we sincerely believe the best interests of the country as a whole will be served if this bill becomes law. If Congress is going to help decentralize industry and is going to foster small business and encourage individual ownership, we must protect ourselves against cutthroat competition produced abroad with cheap labor. We should not be denied the right to safeguard the job of the American worker and the free enterprise system which has given us the high standard of living that we enjoy. The CHAIRMAN. Thank you very much. That was an excellent statement. Mr. LILJENQUIST. Thank you, sir. The CHAIRMAN. The committee will stand adjourned until 10 o'clock tomorrow morning. (Whereupon, at 4: 25 p. m., a recess was taken until Friday, May 1, 1953, at 10 a. m.) TRADE AGREEMENTS EXTENSION ACT OF 1953 FRIDAY, MAY 1, 1953 HOUSE OF REPRESENTATIVES, Washington, D. C. The committee met, pursuant to recess, at 10 a. m., in room 1102, House Office Building, the Honorable Daniel A. Reed, chairman, presiding. The CHAIRMAN. The committee will come to order. The committee will resume its hearings this morning on H. R. 4294. It will be our pleasure to hear from Mr. Richard H. Anthony, secretary of the American Tariff League. Mr. Anthony, if you will please come forward, we will be happy to hear what you have to say. You might identify yourself for the record. STATEMENT OF RICHARD H. ANTHONY, SECRETARY, THE AMERICAN TARIFF LEAGUE, NEW YORK, N. Y. Mr. ANTHONY. My name is Richard H. Anthony. I am secretary of the American Tariff League, with headquarters in New York City. Mr. Chairman and members of the committee, during this initial week of the hearings on H. R. 4294, your committee has heard recitals of the unhappy experiences that domestic producers have had under the trade-agreements program as it has been administered. A sizable segment of the American economy has lost confidence that the Tariff Commission and the executive branch of the Government will treat it fairly and objectively in tariff matters. These American producers with a stake in the tariff, many of them members of this league, have no such complaint to lodge with respect to Congress. In the 1951 Extension Act, Congress seemed to have declared its intent clearly enough. The trade agreements approach to tariff setting is so unscientific that further clarification of congressional intent, as proposed in H. R. 4294, important as it is, does not attack the basic problem. It is no news to this committee that the league would like to see an end of the trade-agreements approach and, in its stead, the creation of a system whereby tariff-setting would be the responsibility of a qualified commission or agency, independent of the executive branch, and operating under the guidance and control of Congress. The President has asked Congress to extend his authority under the Trade Agreements Act for another year, during which time a basic and comprehensive study of our foreign trade and tariff policies can be made and new policies determined. Recent studies have been superficial. A basic and comprehensive study is long overdue. It was 23 years ago that our basic tariff rates and commodity classifications for tariff purposes were last enacted by Congress. They are now in a chaotic and unrealistic state, not only due to the many changes in rates by trade agreements now fully or partially effective, or in suspension, or terminated, but also to the many new products since developed. Although a revision of rates and classifications is in order, there is no enthusiasm in Congress or among private groups, including the league, for the omnibus bill method of revision employed in 1930. Rather, it is hoped that the study the President proposes will recommend methods of revision that will relieve Congress of the burden of wholesale legislation of individual rates and classifications, yet will put the process of revision under the surveillance of Congress and subject to its approval. For that reason and, in general, to carry out its constitutional tariff functions, Congress, it seems to the league, should have a primary role in the President's study. Our complex tariff structure has become entangled in the tradeagreements machinery. The league recognized the advisability of legislating within the scope of the trade-agreements program pending the study and revision of our basic tariff and trade policies. However, it is important to reassert and make effective the principle that the United States has always reserved the right to avoid injury to American producers through the workings of the trade-agreements program and the right to withdraw or modify any tariff concession in a trade agreement that causes or threatens such injury. In essence those are the objectives of H. R. 4294. The league approves of the objectives of the bill, although not all of its provisions, for the reasons to be explained. These objectives are much the same as those urged by the league in a resolution passed at its 67th annual meeting on October 22, 1952. We would appreciate having the league's resolution inserted at this point in the record of testimony. The CHAIRMAN. Without objection, it is so ordered. (The material referred to follows:) The following 10-point ATL resolution on United States foreign-trade policy and tariffs was unanimously adopted by a membership vote at the afternoon public-affairs session of the league's 67th annual meeting held at the Plaza, New York, on October 22, 1952: "RESOLUTION "Be it resolved by the American Tariff League, Inc., at its annual meeting, October 22, 1952, That the following statements of position shall constitute the basis for its educational program and legislative and administrative recommendations for 1953: "1. To maintain national security, economic strength, and diversity of production in the United States, continued regulation of its foreign trade is necessary. The tariff is universally admitted to be the fairest, most equitable, and most liberal method of trade regulation and should be favored over other methods where applicable. "2. Whenever administration of the tariff prevents it from acting effectively or promptly enough to safeguard fair American domestic-market conditions as between American and foreign producers of like commodities, the United States must perforce resort to quotas and other forms of regulation until proper tariffs can be determined and applied. |