States and its economy and the future of the free world and its civilization. Having been conceived and nurtured in this philosophy, we have supported the Reciprocal Trade Agreements Act and its extensions and renewals. In 1962, however, we believe that this is not enough to meet the economic and political challenges which now face us. These include such increasing signs of danger at home as our unfavorable balance of payments, the drain upon our gold reserves, the core of chronic unemployment, and the dwindling of our rate of industrial growth. Far more momentous, however, are the challenges overseas: The miraculous success of the European Common Market, and its almost limitless future potential, have forever changed the patterns of world trade and the position of the United States as a trading nation. The explosive increase in the number of the world's new nations, and the simultaneous demand to share in the fruits of the 20th century asserted by the undeveloped and underdeveloped countries, both new and old, around the globe, present both an obligation and an opportunity without precedent. The United States must act to meet the one and to take advantage of the other, for both political and economic reasons-to protect equally its vital self-interests at home and its role of world leadership abroad. Finally, and overshadowing all else, the global struggle between the free world and international communism shows no sign of abating. Its outcome will determine the future of mankind. No factor will influence that outcome more than the economic strength of the nonCommunist nations; and we believe that a drastic expansion of trade between those nations is indispensable to the adequate development of such strength. In my opinion, and that of my company, the proposed Trade Expansion Act of 1962 represents an imaginative and dynamic response to the crucial challenges I have just mentioned. We endorse its basic objectives wholeheartedly and enthusiastically. We believe that the authority given the President in sections 201 through 213 holds the possibility of an immeasurable development of our trade with the free nations of the world, and particularly with the all-important European Common Market and the friendly tropical agricultural countries of both hemispheres which need oversea markets so desperately. These basic objectives together seem to us calculated to add new and great vitality and effectiveness to our most essential national programs the growth of our domestic economy, the cultivation of closer political and economic ties with the free nations of the world, the support of our foreign aid programs, and particularly the Alliance for Progress with our Latin American neighbors, and, beyond all. our ever-present need to develop our security and strength to the utmost in our contest with the Communists for world economy. We feel particularly able to speak with regard to the potential impact of H.R. 9900 in Latin America, where our primary agricul tural function is performed, where the great bulk of our investment and of our employees are located, and where we have been intimately involved with the local governments and economies since the turn of the century. The agricultural resources of these countries-in terms of available land areas, variety of soil conditions, favorable climate, and an ample supply of labor-are limitless but, with such exceptions as coffee and bananas, virtually untapped. This is, of course, primarily due to the lack of scientific agricultural technologies and modern farm machinery, caused in turn by the lack of local investment capital as well as suitable markets. The dynamics of the free enterprise system dictate the obvious two-pronged solution: increasing industrialization and expanding Oversea trade. The former, which is necessarily a gradual and long-range objective, falls within the ultimate goals of the Alliance for Progress, for which we have high hopes. For the latter, H.R. 9900 makes much-needed and immediate provision in the special authority given the President to open up great new markets for Latin American products by negotiating with the European Common Market a mutual reduction or the elimination of duties on tropical, agricultural, and forestry products. If by this method the vast consumer markets of the Northern Hemisphere can be opened for all the agricultural potential of the Tropics, it will indeed be the start of a new era for our "good neighbors" to the south. The need is great-and so, we believe, are the opportunity and the promise. I do not pretend to be qualified to appraise the complex and technical administrative and legal provisions of sections 221 through 407 of H.R. 9900, running to some 55 pages. As well as I can understand them, they seem intended to provide (1) appropriate safeguards to the extraordinary delegation of legislative power implicit in the bill, and (2) appropriate assistance and relief to individual businesses, workers, and industries subjected to undue hardship in the implementation of the program. I confess to some concern as to the complexity of the second category of provisions, and the degree of regulation and administrative bureaucracy which it seems to me they will necessarily entail; but it is to be presumed that the Congress will take such corrective measures as experience may prove necessary. I am not competent to judge the adequacy of the first category of provisions, but in the absence of any requirements as to public hearings or any veto power by the Congress, I am inclined to share the reservations that have been expressed as to section 404, which appears to foreclose any judicial review of the exercise by the President and the various administrative agencies of the extremely broad powers and discretion vested in them. Taken as a whole, however, H.R. 9900 impresses me and my company as an urgently needed and constructive effort to expand the international trade of the United States to the benefit of our domestic economy, our foreign policy, and our national security. That ends my statement, gentlemen. Mr. KING. Thank you, Mr. Fox. The committee appreciates your giving them the benefit of your company's views. Are there any questions? Mr. KEOGH. Mr. Chairman? Mr. KING. Mr. Keogh. Mr. KEOGH. May I commend Mr. Fox for an obviously studied, and perhaps what is more important, a concise statement of his position and his company's? I do not share the concern that some have seemed to express respecting the effect of the lack of judicial review. I know of no precedent for a judicial review of the trade agreements as such. I am informed that there is nothing in the pending bill that would intrude upon the present jurisdiction of, say, the Court of Customs. That court would still retain its jurisdiction in respect to matters coming before it. That is all I have to say, Mr. Chairman. Mr. KING. There being no further questions, Mr. Fox, thank you again. Mr. Fox. Thank you, Mr. Chairman. Mr. KING. Mr. Casey. STATEMENT OF JAMES H. CASEY, JR., EXECUTIVE SECRETARY, NATIONAL ASSOCIATION OF GLOVE MANUFACTURERS Mr. CASEY. My name is James H. Casey, and I am executive secretary of the National Association of Glove Manufacturers, Inc., with main offices in Gloversville, N.Y., located in Fulton County, the single largest glove producing area in the world. Our association represents manufacturers of leather gloves, fabric gloves, and those gloves made in combination of both leather and fabric. Our greatest concentration of manufacturing is in the State of New York and Wisconsin. Glove manufacturing facilities are located in an additional 22 States. With the exception of a few large cities where there is a limited glove production; namely, Chicago, Milwaukee, New York City, and Des Moines, over 95 percent of the U.S. production is in small communities located in the various States. It follows that, because of the location of the industry, our contribution to the industrial and social well-being of these communities is very important. In many areas, glove manufacturing is the major industry. Domestic-made merchandise has one market and that is the United States. Our export trade is nil, and that is because the labor burden in a pair of gloves is high in contrast to the low labor burden on foreign-made gloves. Accordingly, countries in Europe and the Far East can supply their own demands; and such sources as Italy, France, Germany, Japan, and Hong Kong are used where foreign countries have a demand in excess of their production. The domestic manufacturers have at times supplied U.S. demand, but only when foreign sources, because of wars or other unusual conditions, have interrupted their production. Our markets have always been available to foreign sources, and they have been able to take over any part of our market at will. At the present time in the United States there is a demand for foreign-made gloves, particularly those of leather, 10 times greater than foreign sources can supply. Here again, it is the low labor burden on foreign goods which keep them attractively priced in our market. Italy, France, and Germany, our major suppliers of leather gloves for women, control better than 75 percent of our market and could at will easily capture all of it as their broad training programs supply them with the additional production force. That sounds almost incredible but the only reason we are not getting more gloves in our country today is due to the fact that France, Germany, Italy, the glove-producing areas, have a shortage of labor. They are training them as fast as they can but they still cannot meet the demand. They also have a limitation on the amount of raw materials they can supply. Otherwise, they would be able to flood the market with many more pairs of gloves. There is no problem selling gloves here. Everyone wants foreign-made gloves because of its price. The only reason we exist at all is due to the fact we can fill in with a few colors or styles. Gloves centers in Europe are going at capacity, our markets are open to them; and, with the unprecedented demand, surely nothing is to be gained by any tariff adjustments, other than to destroy completely one division of our industry. We do not see any particular reason for upsetting trade conditions in our industry. There is nothing to be gained. The importers are not interested. The importers of gloves today would like to see the trade for the glove industry at least left alone. They would not want to see our domestic industry ruined in its entirety. I think that is one of the reasons they are not participating in this conference at this time. They have no interest in it whatsoever. The U.S. Department of Commerce records imports of ladies' leather gloves for the past 8 years as follows: 1954 1955 1956 1957-- Pairs 1,058, 260 1958_. 1, 815, 948 1961_ Pairs 2, 601, 345 3,064, 788 4, 122, 060 4,757, 748 It is obvious from the above that European countries, as we have stated, have no problem in taking over the little that is left of our domestic market. With such an advantage, you can readily see why our industry is apprehensive over H.R. 9900. Fabric glove exporting countries to the United States, while not enjoying such a large proportionate share of the domestic market as in leather, actually account for many times more units than any other type of glove. During the past year, fabric glove imports were in excess of 27 million units, or about 6 times greater than leather gloves. In this particular instance they control about 60 percent of the domestic market. They, too, have no problem selling whatever merchandise they want in this country. We feel we have an unusual situation with a tremendous demand for foreign merchandise and European countries are not able to supply it. The domestic industry, in itself, is keenly competitive; and, with imports in command of such a huge share of the domestic market, it is understandable why we look with disfavor on any legislation that will further injure the domestic manufacturers. We feel very strongly about the fact that adjustments can be of no benefit to foreign countries. In your mature consideration of H.R. 9900, we ask that you consider: 1. The law of supply and demand decreases employment opportunities where wage levels are not competitive. 2. Tariff reductions are not being asked for by all importers. Many realize the disadvantages that may follow, such as the creation of a market monopoly in the United States by the lowest cost producing country, to the detriment of all others. 3. The incentive for better social and economic development in foreign countries is nullified when you permit low-cost producing countries to enjoy the same low tariff rates as all others. 4. Your consideration of the bill should include the advisability of giving to the President the vast powers over international trade that he has requested. 5. With no export market because of high labor content, we can only expect our situation to get worse; and such could cause massive unemployment. I was in the Far East last June and had a chance to look over some Japanese plants and Hong Kong plants and discussed with the various people there the labor wage rates. It was very difficult to determine because of the piece rate structure in the United States versus the weekly rates in foreign countries. Under a very conservative estimate in most instances we were about 12 times higher in our fabric glove rate than they are in the Far East. In Germany, France, and Italy, in that order, we were anywhere from three to five times higher than they were. Gloves by their nature have a high labor burden. They do not lend themselves to mass production methods. Leather varies in size, shape, and kinds. It has to be handled as an individual item, not what we consider a mass market industry. We think that the incentive for better social and economic development in foreign countries is nullified when you permit low cost producing countries to enjoy the same tariff rate as all others. I would like to call attention to the fact that what the Canadian Minister of Finance said 3 weeks ago. It was reported in the papers what he said in the Parliament in Ottawa. He said all we have to do |