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Department of State bulletin (Volume v. 46, Jan- Mar 1962) online

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society that has the greatest capacity to adjust to the
scientific, social and political revolutions of the age. . . .

The ability of the United States to take the lead in this
process of adjustment is vital to its own security and the
security of the rest of the free world, but this whole
process cannot proceed much faster than the development
of public understanding in this country.

It is our responsibility as citizens to develop tliis
understanding in ourselves and in our conmiuni-
ties. It is our responsibility as citizens to help
solve our domestic problems and in so doing to
strengthen our country for leadership in the free
world. It is our responsibility — and it is within
our power as women, that power which, as the
Ladies^ Home Journal reminds us, should never be
underestimated.

How do we go about developing an understand-
ing of the complex domestic and foreign issues
confronting us ? James Reston of the New York
Times made what seems to me an excellent sugges-
tion, which I will pass along to you. In every city,
town, and village, he suggests, study groups should
be formed in churches, schools, service clubs,
PTA's, and other organizations. "It is not enough
merely to listen to lectvtres — the fastest-growing
indoor spectator sport in America today," he
emphasized. The study groups must really study
and discuss : first, the problems of their own com-
munities — schools, jobs, public assistance, medical
care for the aged, housing; and then move on to
more complicated matters like international trade,
foreign aid programs, or United Nations bonds.
They should get the facts in each situation and
analyze the diffex-ent possible courses of act ion and
intelligently support — or intelligently oppose —
community. State, and national programs.

This sort of analysis is in the best American
tradition. We have often felt impelled to turn
the bright light of self-examination on particular
needs. Indeed it is one of the things about us that
impresses foreign visitors. Many of the foreign
women visitors I see in my job have mentioned to
me, after a month or two here, how surprised and

Department of Sfafe Bulletin



pleased they were at the frank criticism by Ameri-
cans in all walks of life of abuses or unhealthy
situations. They admit that they imagined Amer-
icans to be standardized, homogeneous, and com-
placent; on the contrary, they find in us a
great diversity of opinion and a perpetual soul
searching.

But our responsibility is not limited to analysis
and criticism, however intelligent, nor to support-
ing or opposing through the ballot box. It is also
our responsibility to play an active i^art in im-
proving our communities. For generations
Americans, both men and women, have been join-
ing organizations to this end. A sense of service,
of concern and responsibility for others and for
the community, has been characteristically Amer-
ican since the earliest days of our nation. The
American woman volunteer is a unique institution.
You know that, of course, because you are that
unique institution. Each one of you, I am sure,
is on the board of a dozen community organiza-
tions. You give more hours than there are in the
week to your PTA's, your hospitals, playgrounds,
senior citizens' centers, churches. All our many
community welfare activities depend on your vol-
untary services. You have changed the faces of
your hometowns. You are the hubs in our wheels
of progress.

Assisting Government Programs

Many American voluntary organizations have
taken on responsibilities beyond the conunimity
and the Nation. They reach out to help the student
in Nigeria, the farmer's wife in India, the rural
schoolteacher in Chile, the leper in Viet-Nam.
Some women's groups have responded to requests
to share our techniques of vocational education or
of citizenship abroad. Others open their doors
here at home to the foreign visitor coming for
study and observation. They conduct orientation
sessions, workshops, and seminars to explain our
political and social way of life; they invite visitors
to their meetings to watch how they work. Most
foreign visitors, especially women, put the work-
ings of American volimtary organizations high on
the list of things to see here. Members of newly
formed women's organizations in Africa, for in-
stance, are eager to learn our organizing tech-
niques. They want to laiow how a woman's club
puts across a school bond issue, gets Main Street



mended, or trains volunteers as nurses' aides. In
this generous sharing of their experience our vol-
untary organizations have become a valuable
adjunct to the Government's program for helping
other people help themselves.

All citizens have a responsibility and an oppor-
tunity to assist that program, directly or indi-
rectly. As I said earlier, American leadership
will stand or fall by our success or failure in
solving our domestic problems. Secretary Rusk,
a few months ago, remarked that "the biggest
single burden we carry on our backs in our foreign
relations in the 1960's is the problem of racial
discrimination here at home." Most of the people
of the new nations — indeed something like three-
fifths of the world's people — are not white. In
their eyes the spirit of democracy is only as real
and meaningful as it is in practice. "WHien we
preach liberty and freedom for all, we must not
only mean it but live it.

As women, as leadere of our communities, we
have a responsibility and an opportunity to in-
fluence the conduct of community life so that visi-
tors, especially those from the newer nations, feel
welcome in all neighborhoods and all public
places — and so that they realize all our own citi-
zens are equally welcome. Let us so influence our
communities that our newspapers and the world's
newspapers carry no ugly stories of discrimi-
nation.

You may be interested in the reaction of a visitor
from Panama. Last spring my office sponsored
the visit of 12 Latin American women whose spe-
cial interest was social welfare. The Panamanian
member of the group was of mixed African and
Indian ancestry. She came to the United States
with much hesitation, afraid that she might have
unhappy experiences. Luckily her experience
was happy; she was warmly received wherever
she went. At the end of her stay she said to me :
"I know now that what matters in the United
States is not the color of a person's skin, but the
person himself." This is the way it should be.
Let us make it true everywhere.

In this world precariously balanced between
autocracy and freedom, what each one of us does
may tip the scales. It might well make the differ-
ence between defeat and victory. It is a challeng-
ing responsibility, this responsibility of free
citizens — a responsibility we are fortunate to have.



February 26, 7962



339



The New Trade Expansion Act



iy Leonard Weiss'^



I gather that what you would like me to do is to
explain the new Trade Expansion Act proposed by
President Kennedy on January 25 to tlie Con-
gress.^ I imderstand you would like to know what
the act provides, what it would do, and how it
would work.

The President's proposals may be considered for
purposes of simplification as consisting of essen-
tially two parts : first, that providing for new au-
thority to reduce tarifi's and, second, that providing
for ways to deal with increased competition from
imports and any problems of domestic readjust-
ment which might arise.

Authority To Reduce Tariffs

Let us look at the first part— the authority to
reduce tariffs and procedures for canning out this
authority.

The new trade bill would provide the President
with essentially four types of new tariff authority :

1. authority to reduce duties in relation to any
other country;

2. special authority to reduce or eliminate duties
in relation to the European Economic Community,
the EEC, popularly called tlic Common Market;

3. special authority to reduce or eliminate duties
in relation to the less developed countries ; and

4. authority to eliminate low duties.



' Address made before the National Council of American
Importers at New York, N.Y., on Fel). 8 (press release 86
dated Feb. 7). Mr. Weiss is Director of the Office of
International Trade, Department of State.

' For text of the President's message on trade, see
Bulletin of Feb. 12, 1902, p. 231 ; for text of a bill "To
promote the general welfare, foreign policy, and security
of the United States through international trad a^ree-
ment,s and through adjustment assistance to domestic
industry, agriculture, and labor, and for other purposes,"
see H.R. 0000, 87th Cong., 2d sess.



As regards the first authority, the President
would be authorized to reduce in a trade agree-
ment duties existing on July 1, 1962, by 50 percent.
The act has been so drawn that duties "existing"
on July 1, 1962, include those reduced duties to
which the United States is committed under inter-
national agreement as of that date, even though
those reduced duties may not yet actually be in
effect. Accordingly the 50-percent authority
would be applicable to those duties which will be
reduced pursuant to the current Geneva tariff
negotiations but which may not come into effect
until some time after July 1, 1962, because of the
staging process.

In addition to this authority available in ne-
gotiations with any other country, the bill pro
vides special authority to deal with the Common
Market. The Common Market presents a special
problem for our exporters. As a result of the com-
plete elimination of tariffs internally among the
member states of the EEC, coupled with the main-
tenance of a common tariff against the outside, our
exporters have a special hurdle to overcome which
they do not face elsewhere. If our exporters are
to get over this hurdle, a simple 50-percent reduc-
tion in the external tariff of the Common Market
may not be good enough. Thoy may need a
greater reduction or even complete elimination of
the particular tariff concerned if they are to pre-
serve, to say nothing of expand, their position in
the market.

Naturally, if we are to seek such substantial duty
reductions and eliminations from the EEC, we
must bo prepared to grant comparable tariff con-
cessions to tlio EEC on their imports into the
United States. Accordingly, the act authorizes
the President in an agreement with the EEC to
reduce tariff's by more than 50 percent or to elimi-
nate them completely in those cases where the



340



Department of Stale Bulletin



United States and tlie EEC together account for
80 percent or more of the world export vahie of
all articles within a specified category as defined
in the act.

This special autliority goes one step farther in
relation to agricultural products. In the case of
such products, even if the 80-percent trade cover-
age test could not be met, the President would be
authorized in an agreement with the EEC to re-
duce by more than 50 percent or to eliminate the
duty on an agricultural commodity if he deter-
mines that such action w^ould help maintain or
expand U.S. exports of such an article.

Any tariff concessions which we might grant to
the EEC under this authority would be extended
to imports from other countries. Such generaliza-
tion is in accordance with our traditional policy of
most- favored-nation treatment, which is explicitly
reaffirmed in the new proposed legislation. Thus,
tariff reductions or eliminations under the 50-
percent or the other authorities to which I have
referred, as well as under the EEC authority,
would be extended to other countries.

This authority in relation to the EEC has been
drawn in the way it has to protect our position in
the EEC market in commodities where we have an
obvious comparative advantage. The fact that we
and the EEC have dominated 80 jxjrcent of the
world export value in a commodity reflects the
advantage we have over other suppliers in such
commodities. We want to be sure that these ad-
vantages are not frustrated and our exports cur-
tailed as a result of the internal elimination of
tariffs within the EEC while tariffs are main-
tained against the outside. At the same time, be-
cause we do enjoy a strong competitive position,
as reflected by our dominance in world exports in
these commodities, we can make substantial duty
reductions and even eliminations with reasonable
confidence that our domestic industry will not face
undue difficulties from imports, including imports
from other countries to wliich concessions to the
EEC would be generalized.

As I indicated, the act also provides a special
authority in relation to the less developed coun-
tries. One of the most compelling problems which
these countries face is to expand their exports so
that they can earn the means to support their eco-
nomic development, so urgently needed to raise
living standards and promote political stability.
Accordingly the act authorizes the President to



reduce or eliminate duties or other import restric-
tions on tropical agricultural and forestry com-
modities not produced in significant quantities in
the United States. This authority is conditional
upon tlie EEC's taking comparable action on a
nondiscriminatory basis so as to encourage the
maximum possible reduction of restrictions
against the trade of the less developed countries.
Finally the act authorizes the President to elim-
inate tariff's on those products where the duty is
already 5 percent or less. In such instances the
duty generally does not serve any significant pro-
tective fmiction and is simply a nuisance to the
trade and an administrative impediment.

How This Authority Would Be Applied

The foregoing is the authority which the act
provides to the President to reduce or eliminate
duties. In exercising this authority the President
must first seek the advice of the Tariff Commission
as to the economic effect of reductions or elimina-
tions in duties on U.S. finns and workers engaged
in the production of the articles concerned. In
advising the President the Tariff Commission will
be expected to take into account the probability
of significant idling of productive facilities, pro-
longed and persistent inability to operate at a
profit, and unemploj'ment or underemployment in
domestic producing firms. As under present pro-
cedures, the Tariff Commission may hold public
hearings in preparing its advice to the President.

Under the proposed bill the President would not
be permitted to make duty reductions or elimina-
tions on any items on which escape-clause action
has been taken pursuant to the present escape
clause or to the modified escape clause in the pro-
posed act. Nor may the President reduce or elimi-
nate tariffs on items on which restrictions have
been imposed pursuant to the national security
provision which is contained in the present re-
ciprocal trade agreements act and which is re-
tained in the proposed bill.

The bill also provides, as does the present act,
for the withholding of tariff concessions from the
U.S.S.R. and from countries which are dominated
or controlled by international communism.

As is the case imder the present act, the new act
would provide for the staging of tariff reductions
or eliminations. In general the tariff reductions
or eliminations are to take effect in not less than
five equal annual installments. They may take



February 26, 7 962



341



effect in unequal intervals and amounts, provided
the sum of reductions at any one time does not ex-
ceed what would occur under five equal install-
ments. This feature permits smaller reductions
initially and larger ones toward the end of the
period. No staging is required for reductions of
not more than 25 percent of the existing rate or for
actions taken under the tropical-products or low-
duty authority.

Dealing With Effects on Domestic Producers

So much for the authority to reduce and elimi-
nate tariffs and for the way in which this au-
thority would be applied. Now I would like to
turn to those features of the new bill designed to
deal with the effect of impoits on domestic
producers.

Perhaps in no respect is the present legislation
so defective as with regard to the provisions de-
signed to safeguard domestic industry from seri-
ous injury. These provisions satisfy no one. For
those concerned about imports, the present provi-
sions don't go far enough. They are felt to be
unduly time-consuming and insufficiently restric-
tive to protect domestic interests. For those con-
cerned with the promotion of a liberal trade policy,
the present provisions are felt to go too far. They
are considered unreasonably to inhibit tariff re-
duction and to create widespread uncertainty and
generally to raise the question whether the existing
act is more a vehicle of trade liberalization or trade
restriction.

The proposed bill tries to face up to this prob-
lem and come up with a constructive solution. It
accepts the premise that action in the national in-
terest to reduce trade barriers entails a national
responsibility to assist those who may be adversely
affected. It does not expect individual groups to
bear the burden of a policy felt to be in the interest
of the nation as a wliole. It seeks, however, to
meet this burden in a positive rather than negative
way, consistent with a dynamic rather than static
economy. It seeks, where possible, to make our
producers more competitive in their present fields
of activity. Where this may not be possible, it
seeks to facilitate their adjustment to other fields
where they can be competitive. In these waj's it
attempts to provide for a more efficient use of our
resources, for a higher level of national growth,
and, in last analysis, for a better livelihood for our
people.



With these fundamental conceptions and pur-
poses in mind, the proposed bill provides assist-
ance to facilitate the adjustment of domestic pro-
ducers to conditions which may result from action
under the legislation to reduce or eliminate tariffs.
This assistance is essentially of two types : that for
firms and that for workers. In addition, in
extraordinary cases where such assistance may be
inadequate to mitigate the difficulties involved, the
bill provides for temporary tariff relief or other
increased restrictions.

Assistance for Firms and Woricers

The adjustment assistance for firms is of three
types. First, provision is made for technical as-
sistance to an affected firm. Such assistance
includes information, mai'ket and other economic
research, managerial ad^'ice and counseling, train-
ing, and assistance in research and development.
Secondly, provision is made for direct loans and
guarantees of loans where necessary to provide
financial assistance which otherwise might not
be available. Thirdly, provision is made for var-
ious forms of tax relief, such as the special carry-
back of operating losses.

As regards workers, the act provides for three
types of assistance. First, it provides for readjust-
ment allowances in the form of compensation for
partial or complete imemployment. Secondly, it
provides for retraining of workers so that they can
shift into other types of employment. Thirdly,
it provides for relocation allowances to assist a
family in moving from an area where employment
may be lacking to an area where employment may
be available. These facilities are over and above
those which may already be available to firms,
workers, and communities under existing legis-
lation.

The assistance provided under the bill would lie
administered through existing agencies, blatters
relating to assistance to firms would be referred to
the Department of Commerce and other interested
agencies, including the Small Business Adminis-
tration. Matters relating to assistance to workers
would be referred to the Department of Labor
and other interested agencies.

To advise the President and tlie administering
agencies on the development of programs for ad-
justment assistance to firms and workers, the bill
would establish an interagencj* Adjustment As-
sistance Advisor}' Board. This board would con-



342



Deparfmenf of State Bulletin



sist of the Secretary of Commerce, as chairman,
and the Secretaries of the Treasury, Agriculture,
Labor, Interior, and Health, Education, and "Wel-
fare, and the Administrator of the Small Business
Administration. The President may appoint to
the board such other officials as he deems appro-
priate. In addition, the chairman of the board
may appoint for any industry an industry com-
mittee composed of members representing em-
ployers, workers, and the public. Such commit-
tees would be for the purpose of advising the
board with regard to the provision of adjustment
assistance.

Tariff Relief or Other Restrictions

As I indicated above, extraordinary circum-
stances may develop in which adjustment assist-
ance to firms and workers may not be adequate to
mitigate the difficulties involved. With this con-
tingency in mind, the bill provides for increased
tariffs or other import restrictions for a temporary
period. Before such increased restrictions could
be imposed the President must find :

first, that as a result of a concession imports
liave increased so as to cause or threaten on a
widespread basis in the industry (a) the signifi-
cant idling of productive facilities, (b) prolonged
and persistent inability to operate at a profit, and
(c) unemployment or underemployment of work-
ers; and

secondly, that reasonable efforts in the industry
to adjust have been made and have not substan-
tially mitigated the conditions in question and that
adjustment assistance to firms or workers is or
would be inadequate to mitigate substantially these
conditions.

In making these findings, the President would
first obtain the advice of the Tariff Commission.
The Tariff Commission would be expected gen-
erally to hold hearings and obtain information in
the way it does now under the escape clause. As
is presently the case, applications for increased
tariffs or other restrictions under this provision
would be made in the first instance directly to the
Tariff Commission by the industry concerned.
The President would make the ultimate decision
as to the relief to be granted.

As I said, action under this provision is to be on
a temporary basis. Accordingly any increase in
duty or other import restriction taken imder this



provision shall be for a period not to exceed 4
years. The President is authorized to extend the
period if he determines that the national interest
so requires.

This, briefly, is the nature of the President's
proposal for new trade legislation. I would be
glad to answer any questions which you may have.



Summary of New Trade Legislation

The following summary of President Kennedy''s
new trade legislation was prepared in the Office of
International Traded



Title I - Title, Effective Date, and Purposes

1. Title. "Trade Expansion Act of 1962."

2. Effective Date. July 1,1962.

3. Statement of Purposes. The statement out-
lines the essential general welfare, foreign policy,
and security purposes of U.S. trade policy and the
objective of promoting these pui-poses through
international trade agreements affording mutual
benefits. It refers explicitly as among its pur-
poses to the strengthening of economic and politi-
cal relations with the European Economic Com-
munity and with other foreign countries, the
assisting of less developed countries, and the
coimtering of Communist economic penetration.
Tlie statement also refei-s to the provision of trade
adjustment assistance as a purpose of the new act.

Title II - Trade Agreements

1. Tariff Reduction Authority. The bill pro-
vides the President with the following types of
authority to reduce United States tariffs in trade
agreements entered into not later than June 30,
1967:

(a) General Authority. In relation to coun-
tries generally, the President is authorized to
reduce existing duties by 50 percent.

(b) EEC Authority. In negotiations with the
EEC, the President is authorized to exceed the 50
percent limitation and to reduce tariffs to zero on
products within categories of which the U.S. and
the EEC together account for 80 percent or more
of world exports as measured in a representative



' For text of the President's message of Jan. 2.5 on trade,
see Bulletin of Feb. 12, 1962, p. 2.31 ; for an address by
Leonard Weiss on "The New Trade Expansion Act," see
p. 340.



February 26, 1962



343



period. Intra-EEC trade and intra-Communist
bloc trade are excluded from the measurement of



Online LibraryUnited States. Dept. of State. Office of Public CoDepartment of State bulletin (Volume v. 46, Jan- Mar 1962) → online text (page 67 of 101)