of reconversion to civilian production and will serve, at the same time, to assure the American watch importers and assemblers as well as the retail jewelers and consumers of an adequate supply of watches. The Department of State, in this connection, will transmit to the Legation of Switzerland in the very near future the lists referred to in paragraph four of the aide-memoire. SWISS WATCHES UNITED STATES IMPORTS OF SWISS WATCHES AND WATCH MOVEMENTS DURING THE OPERATION OF THE SWISS UNDERTAKING OF APRIL 1946 TO RESTRICT EXPORTS OF SUCH ARTICLES TO THE UNITED STATES 1 Following an exchange of memoranda between the United States and Switzerland on April 22, 1946, the Swiss Government undertook inter alia to limit shipments of watches and watch movements to the United States during 1946 to a number not in excess of that in 1945; and it undertook to limit shipments during the first 3 months of 1947 pro-rata on the same basis. The Swiss also undertook to initiate measures to channel shipments of Swiss watches and watch movements directly to the United States, with a view to discouraging shipments through third countries. Official Swiss statistics report that exports of watches and watch movements to the United States in 1945 totaled 8,369,000 units. An estimated 650,000 of these, however, were not actually shipped to the United States; they were sent to United States Army Post Exchanges and Naval Ships' Stores located outside the United States. The Swiss quota undertaking did not apply to these latter shipments; it applied only to shipments made directly to the United States. Those direct shipments in 1945 amounted to approximately 7.7 million units, a number which fixed the basic quota established by the Swiss declaration of April 1946. For the purpose of limiting direct shipments to the United States in conformity with its undertaking,, Switzerland issued export licenses during 1946 and the first quarter of 1947 at the rate of 645,540 units per month. That monthly rate corresponds to an annual rate of 7,746,480 units. Switzerland's export licenses applied only to shipments of timepieces which the Swiss classify as watches. They did not apply to certain other classes of timepieces, such as small-size alarm clocks, which United States import statistics classify as watches. Swiss official statistics report that in 1946, 7,980,000 watches and watch movements were exported to the United States but this figure includes 574,000 units which were shipped to post exchanges and ships' stores outside the United States. Shipments made directly to the United States amounted to 7,405,000 units, or about 314,000 less than the number provided for in the quota agreement. Swiss official statistics report that during the first 3 months of 1947 approximately 1,732,500 watches and watch movements were exported to the United States. This figure includes 88,400 units shipped to post exchanges and ships' stores outside the United States. Actual shipments to the United States during the first quarter of 1947 therefore amounted to about 1,644,000 units, which compares with a quota of 1,936,600 units provided for in the Swiss declaration of April 1946. A foreign country's reported exports of any item to the United States in a given year seldom coincide precisely with United States reported imports for consumption of the item from that country in the same year. Frequently, as in the case of watches and watch movements, the disparities are marked. These disparities in statistics arise from four principal causes: (1) United States trade statistics ordinarily credit imports to their country of origin, irrespective of whether the articles are shipped to the United States directly or through third countries, whereas foreign countries report as exports to the United States only those articles which are shipped directly to the United States; (2) differences in classifications used by the United States and foreign countries; (3) the speeding up or slowing down in the rate of shipments during successive year ends; and (4) year-end variations in the stocks of imported merchandise in the custody of the Customs and in bonded warehouses. The disparity between the Swiss and United States statistics on watches and watch movements appears to arise principally from the first two causes outlined above. There was also a speeding up of shipments at the end of 1946 compared with the end of 1945. Airplane transportation was used This report is a supplement to the report entitled "Watches" which was released by the United States Tariff Commission on February 3, 1947. That report appeared as No. 20 in the Tariff Commission's War Changes in Industry Series. Copies may be obtained by purchase at 40 cents per copy from the Superintendent of Documents, United States Government Printing Office, Washington 25, D. C. to a greater extent during 1946 than during 1945. No information is available on the comparative sizes of the 1945 and 1946 year-end stocks in custody of the Customs and bonded warehouses. There are no official statistics showing separately the direct and indirect importations of Swiss watches and watch movements into the United States in 1945, the base year to which the quota applied. In 1946, however, a special compilation was made showing for the first time both the direct and indirect imports for consumption of watches and watch movements. These statistics, which were released by the Department of Commerce, report total imports in 1946 at 9,655,000 units, of which 1,200,000 were Swiss products imported through third countries, and 6,000 were of French origin. The imports reported as received directly from Switzerland therefore totaled 8,447,000 units, a figure which exceeds Switzerland's reported exports to the United States in 1946 by about 1 million units. United States direct imports of Swiss watches and watch movements in the first quarter of 1947 totaled 1,788,000 units, which exceeds the reported Swiss exports to the United States in that period by about 144,000 units. These disparities between Swiss statistics of exports to the United States and United States statistics of direct imports from Switzerland result principally from differences in the statistical classifications used by the two countries. United States and Swiss authorities define "watches" and "watch movements" quite differently. United States import statistics distinguish between watches and clocks solely on the basis of width of pillar plate. Any movement whose pillar plate is less than 1.77 inches is classified as a watch movement; and any whose width is 1.77 inches or over is classified as a clock movement. On the basis of recent information obtained by the Tariff Commission from several informed sources, including importers of watches and clocks, and domestic manufacturers of clocks, it is estimated that from 75 to 80 percent of the reported imports of watch movements with pillar plates in excess of 1.5 inches which entered the United States during the 15-month period ending March 31, 1947, were for use in clocks, principally desk and alarm clocks. Virtually all the other imports in this size bracket were for pocket watches. On the basis of the foregoing estimates, about 850,000 to 900,000 of the timepieces imported into the United States in 1946 and about 130,000 to 150,000 of those imported in the first quarter of 1947-which were classified in United States statistics as watches were classified by the Swiss as clocks and therefore not charged against the export quota they established on watches. These timepieces, although classified as watches for tariff purposes, entered domestic trade channels principally as desk and alarm clocks. Switzerland's reported exports of clocks and clock movements to the United States in 1946 were valued at the equivalent of $930,000 (the number of units is not reported), whereas United States reported imports of Swiss clocks and clock movements in the same period-both direct and indirect shipments-were valued at $121,000 for 7,075 units. (Presumably direct shipments alone would have been somewhat lower than these figures indicate.) The disparity between the Swiss and United States reports of the value of the clock trade for the year 1946 was approximately $810,000, a sum which could account for the cost of over one-half million inexpensive Swiss alarm clocks. Such clocks are valued at about $1.15 each for the movements and 40 cents each for the cases. Swiss exports of alarm clocks to the United States were not important prior to World War II. They averaged only $2,000 annually for the 5-year period, 1936-40. If the estimated United States imports of timepieces which the Swiss classify as clock movements but which the United States authorities classify as watch movements were deducted from United States statistics of total imports of watch movements which came directly from Switzerland, the remainder would be between 7.56 and 7.60 million units for 1946, and between 1.64 and 1.66 for the first quarter of 1947. These totals are below the quantities provided for in the Swiss quota agreement (7.7 million for 1946 and 1.9 million for the first quarter of 1947); and they correspond closely with the Swiss official statistics of actual direct exports to the United States (7.4 million in 1946 and 1.6 million in the first quarter of 1947). TABLE 1.-Watch movements, cased and uncased-Swiss exports to the United States, 1945, 1946, and first quarter of 1947 TABLE 2.-Watch movements, cased and uncased-Direct Swiss shipments to the United States, 1945, and by months, 1946 and first quarter of 1947 1 1 These statistics are based on official Swiss reports of exports to the United States exclusive of shipments to U. S. Army post exchanges and ships' stores outside of the United States. Calculated on the basis of Swiss official estimates of shipments of 650,000 units to post exchanges and ships' stores outside of the United States. The Swiss agreement to limit export to the United States was dated Apr. 22, 1946, but applied retroactively to shipments commencing Jan. 1, 1946. Source: Official Swiss statistics. TABLE 3.-Swiss watch and other timepiece movements, cased and uncased-United States imports for consumption, 1945, 1946, and first quarter of 1947 1 Source: Compiled from official statistics of the U. S. Department of Commerce. TABLE 4.-Swiss watch and other timepiece movements, cased and uncased-United States imports for consumption, 1945, and by months, 1946 and first quarter of 1947 1 * Figures do not include 5,900 units for 1946 and 6,400 units for January-March 1947 imported from France and of French origin. Source: Compiled from official statistics of the U. S. Department of Commerce. TABLE 5.-Clocks and clock movements-Swiss exports to United States, 1945, 1946, and first quarter of 1947 1 Not reported by number. Values in Swiss francs converted at 1 franc equals $0.2336. Source: Official Swiss statistics. TABLE 6-Clocks and clock movements United States imports for consumption, 1945, 1946, and first quarter of 1947 1 Source: Compiled from official statistics of the U. S. Department of Commerce. 400 27, 600 28,000 EXECUTIVE AGREEMENT SERIES NO. 184 RECIPROCAL TRADE AMERICA SUPPLEMENTARY AGREEMENT BETWEEN THE UNITED STATES OF Signed at Washington December 30, 1939; proclaimed by the President of the BY THE PRESIDENT OF THE UNITED STATES OF AMERICA. A PROCLAMATION. WHEREAS it is provided in the Tariff Act of 1930 of the Congress of the United States of America, as amended by the Act of June 12, 1934, entitled "AN ACT To an end the Tariff Act of 1930" (48 Stat. 943), which amending Act was extended by Joint Resolution of Congress, approved March 1, 1937 (50 Stat. 24), as follows: "Sec. 350. (a) For the purpose of expanding foreign markets for the products of the United States (as a means of assisting in the present emergency in restoring the American standard of living, in overcoming domestic unemployment and the present economic depression, in increasing the purchasing power of the American public, and in establishing and maintaining a better relationship among various branches of American agriculture, industry, mining, and commerce) by regulating the admission of foreign goods into the United States in accordance with the characteristics and needs of various branches of American production so that foreign markets will be made available to those branches of American production which require and are capable of developing such outlets by affording corresponding market opportunities for foreign products in the United States, the President, whenever he finds as a fact that any existing duties or other import restrictions of the United States or any foreigr country are unduly burdening and restricting the foreign trade of the United States and that the purpose above declared will be pronoted by the means herinafter specified, is authorized from time to time"(1) To enter into foreign trade agreements with foreign governments or instrumentalities thereof; and "(2) To proclaim such modifications of existing duties and other import restrictions, or such additional import restrictions, or such continuance, and for such minimum periods, of existing customs or excise treatment of any article covered by foreign trade agreements, as are required or appropriate to carry out any foreign trade agreement that the President has entered into hereunder. No proclamation shall be made increasing or decreasing by more than 50 per centum any existing rate of duty or transferring any article between the dutiable and free lists. The proclaimed duties and other import restrictions shall apply to articles the growth, produce, or manufacture of all foreign countries, whether imported directly, or indirectly: Provided, That the President may suspend the application to articles the growth, produce or manufacture of any country because of its discriminatory treatment of American commerce or because of other acts or policies which in his opinion tend to defeat the purposes set forth in this section; and the proclaimed duties and other import restrictions shall be in effect from and after such time as is specified in the proclamation. The President may at any time terminate any such proclamation in whole or in part.' WHEREAS, pursuant to the said Tariff Act of 1930, as amended, a Trade Agreement was entered into between the United States of America and Canada on November 17, 1938, which Agreement I did proclaim and make public by my proclamations of November 25, 1938, and June 17, 1939, and which Agreement is now in force between the two countries; WHEREAS I, Franklin D. Roosevelt, President of the United States of America, have found as a fact that certain existing duties of the United States of America are unduly burdening and restricting the foreign trade of the United States of America and that the purpose declared in the said Tariff Act of 1930, as amended by the said Act of June 12, 1934, as extended by the said Joint Resolution of Congress, approved March 1, 1937, will be promoted by a trade agreement to Executive Agreement Series No. 149. |