vigorous operation, their technology advancing,
their labor skilled, their managements alert. The
American trade program is designed to prevent
the imposition of export quotas on such materials
as manganese and chromite and tin, and the ad-
ministration of export license systems in ways that
might deliberately divert supplies from the United
States to other powers. It is designed to open up
the markets we require if we are fully to operate
our strategic industries. It is based upon the be-
lief that we shall be weaker if we attempt to isolate
ourselves from the other nations of the world and
stronger if we bind their economies to ours with
the ties of trade.

So, too, with the agencies of international co-
operation. If we, with others, will agree to bring
our differences on economic matters to the council
table, we may achieve a peaceful settlement. But
if we, each of us, insist on retaining freedom to
take action without first considering how it would
affect our neighbors, we shall provoke bad feel-
ing, retaliation, and economic war. It cannot be
said too often or too emphatically that nations
cannot expect to achieve an enduring peace
through agencies of political cooperation if an-
archy is the rule in economic affairs. The world
tried that once and it didn't work.

These are the things that we should risk if we were to turn our backs on the American program for world trade: our international leadership, our foreign trade, our system of private enterprise, our national security. What should we risk if we were to carry it through?

country should by now be acutely aware. For it has been voiced repeatedly and insistently in recent weeks and it has filled many of the news columns in the daily press. This is the risk that particular reductions in tariff rates may make it difficult for domestic producers to compete with foreign producers of similar goods. It is undoubtedly true that there is some danger here, but it would appear, upon examination, that it has been overstressed.

AMERICAN PRODUCTION

Look around the world. Among all our major competitors we find physical destruction, obsolescence, loss of manpower, malnutrition, economic disorganization, and political uncertainty. In the United States we find the greatest productive plant on earth, physically unimpaired, at the peak of technical efficiency, with ample supplies of highly skilled labor, with the world's highest wages and its lowest costs, directed by the genius of private enterprise. The foreigner who would compete in this market suffers two other handicaps. First, he must pay the costs of transportation, breakage, insurance, and consular fees. Second, he must surmount the tariff wall. Yet many a producer in this country complains that he would be ruined if that wall were lowered by an inch. In isolated instances that may be true. But for American industry as a whole it certainly is not.

One reason for the fears expressed by some producers can be found in the fact that they have

directed their attention exclusively toward the
size of their share in the domestic market, assum-
ing that the size of the total market is fixed and
cannot grow. If trade expands, foreign pro-
ducers and domestic producers may both increase
their sales, and the share of each in the domestic
market may not be changed. But let us assume a
case in which the share of the domestic producer
actually declines. He may still be better off than
he was before. Simple arithmetic should demon-
strate that a larger share of a smaller market may
bring less business than a smaller share of a larger
one. Ninety percent of 100 million dollars in sales
is 90 million dollars. Eighty percent of 150 million
dollars in sales is 120 million dollars. With the
size of the market increased by half, the domestic
industry can see its share in the market decline by
a tenth and its total sales increase by a third. It
is the purpose of the trade program to make the
market grow. And a growing market provides
increasing opportunities for everyone, not only
for the foreign producer, but for the domestic
producer as well.

CARE AND DELIBERATION IN LOWERING
TRADE BARRIERS

The interests of producing groups are carefully safeguarded in the administration of the Trade Agreements Act. Before negotiations are begun, the Tariff Commission makes a thorough study of the competitive strength of each industry involved. The Interdepartmental Committee on Reciprocity Information issues a notice of public

15

a list of all the products on which tariff concessions might be made. In the course of the next two or three months, the Committee receives written briefs from any industry that is concerned and holds extensive hearings where representatives of any industry may appear to argue for or against particular tariff cuts. The Interdepartmental Committee on Trade Agreements then analyzes the studies made by the Tariff Commission, the statements presented to the CRI, and other relevant materials, and, on the basis of all the evidence, makes its recommendation to the President. The final decision lies with the President. And this decision establishes the limits beyond which the United States cannot go in using tariff cuts at home to obtain tariff cuts abroad. It is not until this procedure is completed that negotiations with other countries can begin. The United States makes no concessions, in the course of this bargaining, unless it obtains concessions in return. Action is always selective; flat cuts across the board are never made. Some rates are cut substantially, some moderately, and others not at all. Barriers are lowered, not recklessly and suddenly but carefully and deliberately. And nobody is really hurt.

ASSURANCE OF THE ESCAPE CLAUSE During four successive renewals of the Trade Agreements Act, both houses of Congress have built up a voluminous record that covers, in detail,

every criticism that has been raised concerning the operation of the law. In the course of these hearings, particular groups have expressed their fears concerning what might happen to them at some future time. But none of them has demonstrated that these fears have ever been justified. If any industry in the United States has suffered serious injury as a result of the operation of the trade-agreements program, the record does not disclose it.

If any American interest is to be damaged in forthcoming negotiations, it will be because the law is to be less carefully administered in the future than it has been in the past. To make as- . surance doubly sure, however, the administration has anounced its intention of including in all future trade agreements an escape clause which will permit the President to withdraw or modify any concession made in such an agreement if imports of the article in question have increased to such an extent as to cause, or to threaten, serious injury to domestic producers.

In view of the great issues that are here at stake, in view of the comparative strength of American industry, in view of the past administration of the Trade Agreements Act, and in view of the assurances that have been given as to the future, those who now prophesy calamity would appear to be suffering from a curious sense of disproportion. They are in the position of one who thoughtlessly throws a million dollars down the drain while he worries that he may some day lose a dime. Surely