would be no change. Sixteen percent estimated an increase and 32 percent anticipated a decline. Half the respondents estimated no change and half an increase in their 1975 exports over 1970, assuming the U.S. had converted to the metric system. None estimated a decline in exports, in contrast to the 32 percent estimating a decline assuming the U.S. had not converted to the metric system. However, nearly all of those respondents anticipating an increase from conversion to the metric system had relatively small exports except for one large exporter. Respondents' Estimated Percentage Change in Export Shipments in 1975 Compared with 1970 Using Two Assumptions* (1) The 8 percent annual growth rate in Free World International trade for the last 6 years will continue for the period 1970-75. (2) United Kingdom, Canada, Australia, and New Zealand have substantially completed conversion to the metric measurement system by 1970. (3) Estimate based on current 1970 dollars. (A) The United States and your company will continue to use the current customary measurement units and/or engineering standards (this assumes that among all major industrialized countries only the U.S. will not have converted). (B) The United States and your company had converted to the metric measurement units and/or engineering standards by 1970. (This assumes there would be no changes in the cost of producing the subject product in metric units and/or engineering standards.) U.S. Foreign Trade Summary for Construction Machinery and Equipment, 1965-691 (In Millions of Dollars) A. Construction machinery and B. Countries, total.. 1 SIC 3531 2 Includes both SIC 3531 and 3532 (mining machinery and equipment) Factors Affecting U.S. Exports of Construction Machinery Promoting 1. Reputation and reliability of product..... 2. Superior technology...... 3. Higher quality products... 4. Product maintenance and servicing is available... 5. Vigorous company export promotion program.. 6. Products are designed and manufactured in U.S. customary units and engineering standards....... 7. Products are designed and manufactured in metric units and engineering standards.... 8. All others.... Total...... Percent of total ranking 22.7 19.3 16.3 11.6 9.9 ..... 20.2 100.0 6. Products are designed and manufactured in U.S. customary measurement units and standards..... 5.1 7. Products are designed and manufactured in metric units and engineering standards... 8. All others.... Total.... 14.3 100.0 OBJECTIVES AND METHODOLOGY OF STUDY Public Law 90-742, dated August 8, 1968, authorizes the Secretary of Commerce to undertake a study to determine the effect on the United States of increased worldwide use of the metric system. Pertinent to the report is section 2 of the Law which states ". . . the Secretary, among other things, shall (1) investigate and appraise the advantages and disadvantages to the United States in international trade and commerce, . . . of an internationally standardized system of weights and measures." The Secretary of Commerce delegated to the National Bureau of Standards (NBS) authority to prepare the Study. The Metric Study will consist of 14 major investigative components, each dealing with a specific area. Findings of these individual studies will be incorporated into the Metric Study to be submitted by the Secretary of Commerce to the United States Congress. One major investigative component of the Metric Study has as its objective: "to evaluate the potential effects that U.S. conversion to metric measurements and standards may have on U.S. foreign trade." In May 1970, the NBS engaged the Business and Defense Services Administration (BDSA), now the Bureau of Domestic Commerce (BDC), to undertake this part of the Metric Study. Accordingly, BDC conducted a survey of exporters and importers of commodities which would be affected by a conversion to the metric system. The survey consisted of four phases: (1) selection of the five-digit Standard Industrial Classification (SIC) product classes to be studied; (2) selection of firms to be surveyed; (3) preparation, mailing, followup, editing, and tabulation of questionnaires; and (4) analysis of data and writing of report. Selection of Product Classes: The Survey was restricted to those product classes (five-digit SIC) which were identified as being measurement sensitive. These are product classes where physical changes to commodities would most likely occur because of changes to metric measurements and engineering standards. If physical changes to products were not likely to occur because of conversion, or if the product would remain the same except for labeling or packaging in metric units, it was assumed that there would be no impact on foreign trade. These product classes were excluded from the survey. In selecting the product classes it was further assumed that the existing U.S. customary measurement system and engineering standards would ultimately change to new metric measurements and engineering standards. Thus, physical changes would occur in those products currently designed and manufactured in accordance with U.S. engineering standards. Included would be: (1) finished products currently manufactured in U.S. engineering standards; (2) intermediate products which are standard parts and components; and (3) finished products, not produced to any standards, but which must be redesigned to accommodate standard parts and components designed and manufactured in metric units and standards. Certain exceptions were made to the criteria used to identify measurement sensitive product classes. For example, products were not included in the survey (1) when U.S. engineering standards are currently used worldwide and it would be unrealistic to change them; e.g., locomotive and railroad equipment and oil field machinery; and (2) when products are exported and imported to certain specifications or job orders, such as steam, gas, and hydraulic turbine generators. Because of budget restrictions, product classes identified as measurement sensitive which had trade volume of less than $10 million were not surveyed. This reduced the number of product classes surveyed for exports by 54 and for imports, 52. The 1969 trade volume in the export product classes not surveyed amounted to $244.2 million, which was only 1.8 percent of the total trade for all export product classes identified as being measurement sensitive. The 1969 trade volume for import product classes not surveyed was $134.3 million, or 2.2 percent of all import product classes classified as measurement sensitive. An important assumption underlying the survey was that no price changes would result from additional costs of metric conversion. Implicit in this assumption is that competitive relationships, insofar as price is concerned, between domestic and foreign producers will remain unchanged. It was impossible to identify those product classes, if any, which might experience increased costs owing to metric conversion. Using these criteria and assumptions, the 1,166 five-digit SIC product classes were reviewed to identify those which were measurement sensitive and 188 were selected for exports and 155 for imports. Most of the selected product classes fall within four major SIC groupings: nonelectrical machinery, electrical equipment and supplies, transportation equipment, and instruments and related products. See page 86 for a list of product classes identified as meeting the criteria for inclusion in the survey. Selection of Survey Panel: The American Industrial Trader's Index (AITI) was used to select firms. The AITI is a computerized compilation of U.S. exporting and importing firms registered with the Department of Commerce. The list provides names and addresses as well as a substantial amount of information on each firm, including product classes each firm exports and imports. An effort to stratify the survey panel by firm size was unsuccessful because the number of small firms engaged in foreign trade is insufficient. The bulk of foreign trade is carried on by a small number of large firms. One source estimates that 50 percent of U.S. exports are shipped by 93 large firms. The Panel selected for the survey was not a scientific or probability sample of the total trade in each product class identified as being measurement sensitive. Though the AITI identifies product classes in which many firms export and import, it does not provide information on a firm's trade volume in each product class which is necessary to draw a representative sample for the survey. Instead, the number of respondents selected for each product class was based on the total trade volume of the product class. The larger the product |