"(b) TERMS OF OFFICE.-The term of office of a Commissioner shall expire seven years from the expiration of the term for which his predecessor was appointed; except that any Commissioner appointed to fill a vacancy occurring prior to the expiration of the term for which his predecessor was appointed shall be appointed for the remainder of such term." (b) Notwithstanding section 330 of the Tariff Act of 1930, as amended by this Act (1) existing terms of office shall expire at the time provided therefor by such section 330 as in effect on the day prior to the date of the enactment of this Act; (2) the first term of office of the additional Commissioner provided for by this Act shall expire at the close of June 17, 1960; and (3) the terms of office of the Commissioner appointed to succeed the Commissioner whose term of office expires June 17, 1953, shall expire at the close of June 17, 1959. The CHAIRMAN. This morning, the committee is scheduled to begin public hearings on H. R. 4294, introduced by Mr. Simpson of Pennsylvania, to extend the authority of the President to enter into trade agreements under section 350 of the Tariff Act of 1930, as amended. These hearings were originally scheduled to begin on the 22d of April with testimony from members of the executive department. The necessary absence of these officials at the NATO Conference has made it necessary to schedule them on May 4, 5, and 6. The first group of witnesses scheduled to appear on this legislation is composed of independent proponents. The first witness this morning is Mr. O. R. Strackbein, chairman of the Nationwide Committee of Industry, Agriculture, and Labor on Import-Export Policy. Mr. Strackbein, if you are ready we will be glad to hear you. Will you state your name and the purpose for which you appear? STATEMENT OF 0. R. STRACKBEIN, CHAIRMAN, THE NATIONAL LABOR-MANAGEMENT COUNCIL ON FOREIGN TRADE POLICY, AND CHAIRMAN, NATION-WIDE COMMITTEE OF INDUSTRY, AGRICULTURE, AND LABOR ON IMPORT-EXPORT POLICY Mr. STRACKBEIN. My name is O. R. Strackbein. In my appearance before you, I am speaking in behalf of the Nation-wide Committee of Industry, Agriculture, and Labor on Import-Export Policy, but I am also appearing in my capacity as chairman of the National LaborManagement Council on Foreign Trade Policy. This new committee, that is, the nationwide committee just mentioned, is spokesman in matters of foreign trade policy for a wide range of industries, branches of agriculture and labor organizations that are confronted with damaging import competition and threatened with worse to come. I offer for the record a list of the organizations that attended the meeting of March 5, 1953, which gave rise to the nationwide committee. Added to that list is an additional small list of organizations that attended a meeting this past Saturday, and which were not at the previous meeting. The CHAIRMAN. Without objection, those names will be inserted in the record. (The names referred to are as follows:) LIST OF ORGANIZATIONS REPRESENTED AT MEETING ON TARIFFS AND TRADE, WASHINGTON, D. C., MARCH 5, 1953 Almond Growers Exchange, California Band Instrument Manufacturers, Domestic, Tariff Committee Book Manufacturers' Institute, Inc. Bookbinders, International Brotherhood of, AFL Camillus Cutlery Co. Cattlemen's Association, American National Chemical Manufacturers' Association, Synthetic Organic Chemical Workers' Union, International, AFL New York State Canners and Freezers Association Coal Association, National Cordage Institute Cotton Manufacturers Institute, American Dairy Industry Committee: National Cheese Institute American Butter Institute National Creameries Association Milk Industry Foundation Etc. Diamond Match Co., The Fig Institute, California Fish Canners' Association, California Fish Cannery Workers and Fishermen's Union, Pacific Coast, AFL Fishermen's Union, Atlantic, AFL Fishery Products Division, National Canners' Association Fishing Vessel Owners' Association, Inc., of Seattle Florida Fruit & Vegetable Association Glass Workers' Union of North America, American Flint, AFL Glassware Association, American Glove Manufacturers, Inc., National Association of Leather Grain Cooperatives, National Federation of Handwear Association, American Knit Harley-Davidson Motor Co. (motorcycles) Hat Institute, Inc., The Wool Hat Manufacturers Association Hatters' Fur Cutters Association of the U. S. A. Straw Hat Group Hatters, Cap, and Millinery Workers' International Union, United, AFL Kimberly Clark Corp. (paper) Lace Manufacturers Association, Inc., American Meat Packers Association, National Independent Meat Packers Association, Inc., Western States Milk Producers Federation, National Mine Workers of America, United Mushroom Institute, The Nut Growers Association, Northwest Oakville Co. Division, Scovill Manufacturing Co. (metal products) Paper & Pulp Association, American Pen & Pencil Association, Fountain Petroleum Association of America, Independent Photo-Engravers' Union of North America, International, AFL Pin, Clip & Fastener Association Potters Association, United States Regens Lighter Corp. (cigarette lighters) Renderers Association, National Reynolds Metals Co. (Aluminum) Risdon Manufacturing Co., The (metal and wire goods) Seafarers' International Union of North America, AFL Seafood Producers' Association of New Bedford, Inc. Sunkist Growers (citrus) Tuna Research Foundation Vegetable Products, Inc., Basic Walnut Growers Association, California Wine Institute, The Wood screw industry-United States Wood Screw Bureau Wool Growers Association, National Wool Growers, Pacific American Mining Congress American Tunaboat Association Anthracite Institute Clock Manufacturers Association of America, Inc. National Small Businessmen's Association Optical Manufacturers Association Southern Coal Association United Textile Workers of America, AFL United Wall Paper Craftsmen and Workers of North America, AFL Mr. JENKINS. How long is that list? I would like to know who attended the meeting. Mr. STRACKBEIN. I could very easily read the list. Mr. JENKINS. I do not want to take much time. How many are there? Mr. STRACKBEIN. I would say about 75. Mr. JENKINS. Just insert them in the record. That is all right. Mr. STRACKBEIN. Nearly all these groups have had years of experience in this field and therefore speak from direct knowledge of the subject as distinguished from a mere theoretical, idealistic, or doctrinaire contact with the import problem. Contrary to widespread characterizations of these groups as representing only a "tiny" segment of the economy or as being merely marginal, uneconomic, and fringe industries, they include industries and branches of agriculture that are basic to our national economy and national security and employ directly 4 to 5 million people. It is true that they are not numbered among the large mass-production industries. Nevertheless, some of the industries or branches of agriculture in this group are large in the aggregate because of their wide dispersal and numerous producing units. And the various groups combined have roots in all parts of this country and in every State of the Union. Not to be numbered among the huge mass-production industries is not synonymous with being inefficient or marginal or uneconomic as some distorted thinking would have us believe. It is a libel on the tens of millions of people whose livelihood depends directly or indirectly upon these economic pursuits to characterize them in such a depreciatory manner. The tariff history of this country in the past 19 years has been one of progressive tariff reduction in a world that has not been economically in a normal state since 1939. The average duty collected on our dutiable imports has been cut drastically. The average rate during the 1931-35 period was 50.02 percent. In 1952 this average had declined to 12 percent, a reduction of over 75 percent. About a third of this decline came from increased prices of articles on which we levy a specific as distinguished from an ad valorem duty. A number of other countries have increased their specific rates in order to compensate for the rise in prices. We have not done so. On the contrary, in making tariff reductions we have cut specific rates no less than ad valorem rates. If we spread the total duty collected over our total imports we find that in 1952, the average burden on our inflowing trade was only 5 percent. This is lower than the burden imposed by any of the other leading trading nations. Japan is not included because her postwar trade laws are not yet fully settled. In 1952, 58 percent of our imports were entirely free of duty. Many other countries impose various nontariff restrictions that impede the flow of trade more effectively than the tariff itself. We need mention only exchange control, import licenses, quotas, bilateral trading arrangements and embargoes. The United States, on the other hand, has made relatively little use of these various devices. I wish to insert a table at the end of my statement, Mr. Chairman, showing the average rates of duties collected by other countries, in comparison with the United States. The CHAIRMAN. Without objection, it is so ordered. Mr. STRACKBEIN. Because of the abnormality of the war and postwar years not only in the flow of international trade but in the internal economies of the principal trading nations; and, since most of the tariff reductions that have been made since 1934 were made during the war and postwar period, it is natural that a question should arise about the soundness of such reductions once the war-torn countries had regained their feet and were ready to compete again for the markets of the world. The desirability of a change in direction of our tariff policy is increased by the further fact that our wholesale tariff reductions were made without adequate study and preparation. The method of cutting our duties in international conferences could best be described as the meat-ax approach. The tariff on thousands of items was reduced in single international parleys lasting only a few months. This meant hasty and reckless action. The degree of recklessness of these tariff-slashing forays may be appreciated when we compare the procedure followed in the international conferences with the procedure followed by the Tariff Commission under the escape clause. Whereas thousands of items came under the knife at one time in the conferences, applications under the escape clause are confined to one item or possibly a few closely related items at one time. In 10 years only some 40 such applications have been filed. Whereas the international conferences dealing with thousands of items only ran for 5 or 6 months, the Tariff Commission ordinarily devotes approximately a year to each application. It makes a preliminary investigation, then holds a public hearing and follows this, if necessary, by field studies of its own. To date, only three cases have resulted in a restoration or partial restoration of duty. At that rate it would require several thousand years to restore all the original rates. No one, of course, has such a goal in mind, but the pace may be appreciated in its strong contrast to the headlong attack characteristic of our tariff-reduction conferences. Until a year or two ago the Department of State chose to regard the relatively small number of applications made to the Tariff Commission under the escape clause up to that time as evidence that little injury had been inflicted upon American industry and labor by the trade-agreements program. Few applications meant few injuries, they said. That period, namely, from 1943-the year in which the first escape clause was inserted in a trade agreement-to 1949, however, coincided with the prolonged sellers' market in this country, and not much injury was to be expected from imports. Domestic demand was strong enough until the summer of 1949 to absorb both domestic output and imports at high prices. There were, of course, some exceptions. However, when the rescession of 1949-50 set in, domestic producers and labor became alarmed. Then, in 1950, the expanded defense spending lifted the pressure, but the domestic producer and labor had had a preview of what may be expected from a leveling off or a decline in defense spending. Under the statutory escape clause, carried in the Trade Agreements Extension Act of 1951, the number of applications made to the Tariff Commission rose rapidly. To date 25 such applications have been filed; i. e., in less than 2 years' time. Let us see what happened. No sooner had the number of such applications taken a sharp upward turn than the Department of State began publicly to deplore recourse to the escape clause. This reflected a strange attitude indeed, considering (1) that that Department readily admitted that mistakes might be made in reducing the tariff under the method followed, and often referred to insertion of an escape clause into the trade agreements as evidence of the wholly reasonable attitude of the Department, and (2) that if a low number of applications up to 1951 reflected relative absence of injury, as the Department contended, an increase in such applications should, by the same measure, have been interpreted as an indication of a rising trend in the injury suffered from imports. The State Department, however, chose not to follow the logic of the case. We may summarize the situation as follows: 1. The tariff was cut deeply without the benefit of adequate data to determine how far it might safely be cut. Calculated risks were taken. 2. Duties were reduced in wholesale fashion during a period when the effects of the reductions could not be tested adequately. 3. The escape clause was introduced professedly to provide a means of correcting errors committed in the wholesale tariff-reduction process. 4. Relief under that clause has been the exception rather than the rule; and the operation of the clause has been slow and cautious in very sharp contrast with the swift space of the tariff-reduction procedure. 5. The relatively infrequent recourse to the escape clause during the first 8 years of its existence was interpreted as evidence that our industry had suffered only slight injury. 6. When the number of applications rose sharply in 1951 and 1952 · alarm was expressed over the effect produced upon European countries. The "calculated risks" were forgotten. The fair words about a remedy against error were thrown to the wind. Injury, it began |