A practical program was presented to the last Congress as S. 2582. It provided for the establishment of a Foreign Trade Authority with power to establish United States tariff rates which would promote fair and reasonable competition between foreign imports and domestic products. Action under this delegated power would be subject to congressional veto but would not require congressional approval. Provision was made for cancellation of existing trade agreements but for adherence to the tariff rates therein specified, leaving foreign countries free to handle their own import problems in the light of their own best interests-a procedure which foreign countries have pretty well had to adopt despite their trade agreements with us. I invite immediate attention to the proposals made in S. 2582 introduced in the Eightieth Congress. The program there outlined would permit the accomplishment of all the legitimate objectives of the trade-agreements plan but would not tie our hands as the trade-agreements program has done and would eliminate the logrolling and horse-trading technique of setting tariff rates by international agreements. NATIONAL WOOL GROWERS ASSN., Salt Lake City 1, Utah, February 16, 1949. Honorable WALTER F. George, United States Senate Building, Washington, D. C. DEAR SENATOR GEORGE: The situation confronting the domestic sheep industry is well known to you and the Senate Finance Committee. It appears this year that we are confronted not only with the disastrous forces of nature but also with the definite possibility, as evidenced by the action of the House of Representatives, of the return by the Department of State and the Interdepartmental Committee of the “iron curtain" tactics of negotiating the so-called reciprocal trade agreements. We are opposed to trade agreements negotiated in this manner and much prefer the Trade Agreements Act as it now stands, not because it is remedy but as a safeguard. We ask that the peril-point amendment be retained in future tradeagreements legislations. Our position is and always has been in favor of a fair and equitable tariff for the sheep industry. In this connection the following action was taken at our eighty-fourth annual convention in San Antonio, Tex., on February 1 through February 4, 1949: "We reaffirm our traditional stand that a tariff equalizing production costs is the proper way to protect the American sheep grower. We further believe that any proposed agreements under the Recriprocal Trade Act should have the approval of the Congress of the United States." The brevity of this letter in no way minimizes our concern in this problem. We urgently request consideration of the position taken by the domestic sheep industry and ask that this letter be made a part of the record. Sincerely yours, J. M. JONES. MINNEAPOLIS, MINN., February 21, 1949. SENATOR WALTER F. GEORGE, Chairman, Security Finance Committee, Office Building. The retail jewelry business of the United States is largely dependent on the sale of and profit from Swiss watches. We believe that any change in reciprocal trade agreement which increases tariff on these watches would adversely affect our business. As president of the American National Retail Jewelers Association composed of 6,500 retail jewelers with about 50,000 employees, I respectfully suggest that you send this telegram into the records during the hearings of your committee this week. MAURICE ADELSHEIM, President, American National Retail Jewelers Association, S. Jacobs Co. CHERRY GROWERS AND INDUSTRIES FOUNDATION, INC., Re Hearing on H. R. 1211, Trade Agreements Act. Washington, D. C. GENTLEMEN: The Cherry Growers and Industries Foundation, representing growers, processors, and shippers of cherries in the States of California, Oregon, Washington, and Idaho, desires to record in this manner its earnest opposition to those provisions of H. R. 1211 which would eliminate the present fact-finding role of the United States Tariff Commission in connection with modification of tariff rates through trade agreements. We believe it to be of vital importance that the President have the benefit of the expert and impartial findings of the Tariff Commission relative to possible effects of tariff reductions upon domestic producers, before he enters into any trade agreement making such tariff reductions. The procedure now prescribed by the Trade Agreements Act tends to protect against ill-advised sacrifice of tariff protection without a full understanding of the cost involved to our domestic industries. It affords an opportunity for domestic producers who would be affected by a tariff reduction to present their casecase before an agency which is independent of the policy-making officials and departments which originate the proposal for tariff reduction, and which is competent to determine the facts. The present procedure assures the domestic industries that the President will be impartially and expertly advised as to the cost and sacrifice involved in any proposed tariff reduction. Tariff protection is of vital concern to our American cherry industry, the annual crop of which is now valued at almost $50,000,000. One of the principal market outlets for domestic cherries exists only by reason of the duties upon foreign cherries. More than one-fourth of the United States production of sweet cherries, as well as substantial quantities of sour or tart cherries, are now brined for manufacture of maraschino and glacé products. This market is made possible by the duty upon foreign brined cherries. Prior to establishment of the present tariff on brined cherries, practically all of the brined cherries used in the United States came from abroad, chiefly Italy. It was impossible for the growers and processors of domestic cherries to compete with the cheaply produced and processed foreign cherries; hence, there was no important commercial cherry-brining industry in the United States. Upon establishment of tariff protection, however, the American brining industry immediately developed. The cherry growers, who for several years had been struggling under the burden of disastrous surplus production over the volume the then-existing markets could absorb, took immediate advantage of this new brining outlet for their cherries. They built extensive brining plants, formed cooperatives and other organizations for brining and marketing the brined cherries, and undertook a vigorous market-development program for such cherries. New and improved methods of brining were developed and high standards of grade and quality were achieved. As a result, the brined cherries now constitute the principal processing outlet for sweet cherries. The volume brined exceeds that which is canned, and indications are that brining will soon exceed the fresh market and thus become the largest market outlet for our domestic sweet cherries. Loss of the present domestic brined-cherry markets to foreign producers would divert to the fresh and canning markets this large volume of cherries now marketed in brined form. Those remaining markets, subject as they are to rather definite limitations, could not possibly absorb these added supplies, with consequent demoralization of all the markets, including those for the sour cherries as well as the sweet varieties. The issue is, therefore, of great importance to the growers in the sour-cherry Eastern and Midwestern States along with the sweet-cherry growers on the Pacific coast. Present tariff rates on brined cherries are in no manner prohibitive. Large quantities of Italian brined cherries have come into the United States each year since the end of war, and they compete most actively with the local cherries in our domestic markets. They are now being offered on a landed New York basis, duty paid, at prices which are actually less than the cost of production and delivery of the domestic cherries. It is apparent, therefore, that even with present duty rates the foreign and domestic cherries are highly competitive. It is obvious that without any tariff protection to act as a floor to this price com petition from the imported article and under the pressure of the great volume of foreign cherry production suitable and available for brining and export to the United States the domestic industry would quickly lose the domestic markets. It should be noted that approximately 50 percent of the cost of brining and pitting cherries in the United States is cost of labor, and more than 60 percent of the cost of growing and harvesting the cherries is cost of labor. The brinedcherry industry, therefore, represents in about equal proportions the interests of agricultural producers and the interests of labor employed. These data are thus cited to indicate the very real concern the American cherry industry has in the process by which tariff protection is maintained, is modified, or is removed. Cherries are not a commodity the production of which can be quickly adjusted to meet shifting or temporary market conditions. A cherry orchard represents the grower's lifetime work and investment. If he is forced to abandon or pull the orchard, he suffers a tragic and irreparable loss of time, effort, and capital. It is only natural, therefore, that the growers feel very keenly the necessity for a fair, nonpolitical, and impartial investigation of the effects of tariff modifications prior to any trade-agreement commitment to such modifications. We therefore respectfully urge that section 5 of H. R. 1211 be stricken, so that the Tariff Commission will continue its investigations and determinations of peril points prior to negotiations leading to tariff modificatons, as provided in the present law. Retention of the present procedure will give assurance to the domestic producers that their interests are not to be wholly ignored and blindly sacrificed by their Government in its negotiation of future trade agreements. It would seem that the constitutional responsibilities of the Congress require no less than this assurance. We further endorse inclusion in H. R. 1211 of a provision which would require each trade agreement entered into thereunder to contain a so-called escape clause whereby each party to the agreement may, upon timely notice, withdraw any or all concessions granted thereunder which are found to be injurious to its domestic producers. It will be appreciated if this statement may be included in the record of your committee hearing upon H. R. 1211. Respectfully, CHERRY GROWERS & INDUSTRIES FOUNDATION, STATEMENT OF FRANK W. TAYLOR, SECRETARY-MANAGER, NORTHWEST HORTICULTURAL COUNCIL, WENATCHEE, WASH., RE EXTENSION OF THE TRADE AGREEMENTS ACT (H. R. 1211) REPRESENTATION The Northwest Horticultural Council is a nonprofit corporation organized under the laws of the State of Washington. Its membership is as follows: Washington State Apple Commission, Wenatchee Valley Traffic Association, Yakima Valley Traffic Association, Hood River Traffic Association, and Rogue River Valley Traffic Association. The member associations are composed of growers, individual shippers and shipping firms, sales organizations (including grower sales agents), growers cooperative organizations, fruit distributors and exporters of deciduous fruits produced in and shipped from the States of Washington and Oregon. The council represents the growers and shippers of practically 100 percent of all commercial apples grown in the two States and in excess of 90 percent of all commercial deciduous fruits grown in those States. The annual production of deciduous fruits in the States of Washington and Oregon approximates 1,380,925 tons grown on approximately 147,625 acres of orchard, which production has an aggregate farm value averaging in recent years approximately $125,000,000 annually. Apple production in the States of Washington and Oregon equaled in 1947–48, and normally equals, approximately one-third of total United States commercial production. The States of Washington, Oregon, and California account for almost all of the Nation's export production of fall and winter pears. The importance of the export market to the Pacific Coast States of Washington, Oregon, and California is manifested by the fact that there was exported 28.64 percent of all apples shipped from the States of Oregon and Washington in 1938, the last year before the war interrupted all exports. This is compared with 11 percent exported from the national production. Fall and winter pears for the years before the war shipped an average of 43.8 percent to export. The winter-pear production for the three Pacific Coast States averages from 4,000,000 to 6,000,000 boxes annually. It constitutes a major crop in such centers of production as Medford and Hood River, Oreg., upon which the entire community largely depends for its livelihood. The maintenance of these industries on a profitable basis therefore poses a problem of widespread magnitude and of deep social and economic importance. THE POSITION OF THE COUNCIL ON TRADE AGREEMENTS The Reciprocal Trade Agreements Act became law June 12, 1934. The apple and pear industries through their then constituted agencies have affirmed and reaffirmed their endorsement of the policy of the Trade Agreements Act and have consistently supported the renewal of the act from time to time. We again reaffirm our endorsement of the policy as set forth in the preamble of the act and of the means provided in the act for the practical application of the policy to the restoration and further development of international trade. We are, however, deeply concerned with the way the act has been administered and have strong reason to doubt that under present world conditions the act can be made to perform the function for which it is intended. In fact, the experience of our industry with the trade agreements negotiated to date in which apples and pears were items of negotiation, leads us to the unavoidable and disappointing conclusion that the treaties have failed to establish that equality of treatment upon which the success of the policy depends. This industry (considering apples and pears as one), has pointed out over and over again in many statements filed with the Committee for Reciprocity Information the basic principles which must be incorporated in any trade agreement, beginning with those filed in 1935 and continuing down to those recently filed by this council in relation to the 11 nations with whom trade agreements are scheduled for negotiation next April. The beneficial results of the agreements have been difficult to find. They have certainly not developed or restored export trade in our commodities. We recognize the World War II has largely and, in fact, almost entirely destroyed our export trade in fresh fruits following 1939-40. On the other hand it has greatly increased our imports of these same fruits. These increases have been made possible and encouraged by the generous reductions granted in January of 1936 and 1939 and 1947 in our tariffs without compensating concessions on the part of nations to whom concessions were granted. By our endorsement of the policy of negotiating trade agreements which shall be reciprocal in fact as well as in name, we do not subscribe to the use of the authority as an instrument of foreign policy outside the economic field. Our concept of the act is that it was intended to be economic and domestic in character and to be an instrument for the breaking down of trade barriers which had grown up in multiple forms in the period of trade war growing out of World War I. The United States entered the trade war and precipitated reprisals following the Tariff Act of 1930. Britain and the Commonwealth of Nations launched the principle of Empire preference, and other devices to form a tradeunion within the Empire. Other nations raised a multitude of trade barriers. The policy which found legislative expression in the Trade Agreements Act of 1934 was designed to break down these barriers which were stifling international trade and causing increasing irritation between otherwise friendly nations and former allies and neighbors. The 14 years' experience since the policy was placed in active operation in January 1936 has not, in our judgment and as a result of its effect on our own industry, been satisfactory in many respects. The executive branch, to which Congress had delegated its power under the Constitution "to lay and collect import duties," has not always seemed to appreciate or understand the effect upon a business or industry of concessions granted in duties. They have frequently failed to secure compensating concessions of economic value where the same product was both an import and export item. For example, the United States duty on pears was bound in the treaty with Argentina at 2 cent per pound November 15, 1941. This figures about twenty-two cents per box. The Argentine duty on United States pears, which up to 1931 had been duty-free, had been increased to 40 percent ad valorem at point of entry. At a delivered valuation, including freight and refrigeration costs of $5 per box, the Argentine duty is now about $2 a box. Ours remains and is bound at 22 cents per box. Argentina also imposes various other barriers, including an exchange embargo. This is not equality of treatment. The large and increasing importation of Argentine pears in competition with our winter pears is fostered and augmented by this misapplicaton of an economie policy. The winter-pear grower of the United States is now in trouble. The 1947 and 1948 winter-pear crops have not returned the grower's cost of production. Another year or two of present losses will result in bankruptcy and the pulling of trees. The Argentine apple duty is also 40 percent ad valorem. This duty is prohibitive-all business is stifled. The United States duty on Argentine applies is 12% cents per bushel net weight or about 11 cents per box. This duty of 122 cents per bushel was a progressive reduction granted Canada in 1936—a reduction from 25 cents per bushel to 15 cents, which was renewed in the treaty of 1939, and further reduced January 1, 1948 to 121⁄2 cents. Argentina-with no compensating concession whatever-was automatically granted these reductions while maintaining what is tantamount to a complete embargo on the importation of United States apples and pears. This is not equality of treatment. We object to extending the concessions granted one nation automatically to another nation without a compensating concession or quid pro quo which will effectuate the purpose of the act. There is no hope of regaining or opening up a specific foreign market where the concessions are made gratis. In fact, there is evidence to indicate that our most-favored-nation policy is not acceptable to many other nations as an economic policy. The evidence lies partly in the fact that while we are sponsoring a multilateral trade policy, many bilateral agreements are being consummated to which the United States is not a party, and trade treaties are made without reference to the extension of concessions incorporated in such bilateral agreements to other nations. We do not consider this equality of treatment which our policy is supposed to require of all signatory nations to the Geneva agreement. Neither is it an endorsement of the spirit expressed in the ITO charter in anticipation of its adoption. Quite the contrary. The effect of this policy or maladministration of the policy in the case of Argentina is apparent in the following data: Argentina imported from United States during the 1926-31 5-year period annually an average of 253,800 boxes of apples, all from the Pacific Northwest States of Oregon and Washington. This has been reduced to zero. In pears, Argentina imported 78,100 boxes in the 1929-30 season, a high point. This has been reduced to zero. In 1941 Argentina pear exports to United States in 1935 were 2,871 boxes. when the Argentine treaty became effective, 329,907 boxes entered our markets. an increase of 11.491 percent. It is apparent that a grave injustice has been perpetrated on the winter-pear grower who is now in dire straits-perhaps unwittingly, but none the less disastrously to the unfortunate United States pear producer. The United Kingdom and Canadian situation is another example which also demonstrates the inequities which have developed under the policy as it has been administered. Following the passage of the Tariff Act of 1930, Canada inaugurated a system of seasonal duties figured on arbitrary values which came to be called dump duties. These applied on fruit and vegetable imports from the United States. They were prohibitive and completely stopped all trading while they were in effect. Later modifications of the system were made but they remained completely prohibitive. The dump duties were in effect in 1936 when the first trade agreement with Canada was signed and were scaled down about 20 percent in that treaty. They remained, however, fantastically high on apples and all other fruits, pears, cherries, peaches, plums, and prunes. The United States tariff was lowered from 30 cents a bushel net weight to 15 cents without any effective compensating reduction in the Canadian tariffs. The Canadian tariff on a carload of apples, for example, ranged from $373 a carload (750 boxes) to $528, depending on the price, while the United States tariff on Canadian apples was reduced to $63.60 a carload. Moreover, and of equal importance, it extended our 15 cents per bushel by reason of our most-favorednation policy to Argentina, Australia, New Zealand, South Africa, and Chile, which are all apple-producing nations. The effect on Argentine exports to the United States has been recited. Southern Hemisphere apple and pear exports have become and will remain a threat to United States apple growers so long as this inequality is permitted to continue. |