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is because we have this inherited commitment, in
common with Europe, that we can be confident of
the wisdom of our purpose that Europe shall gain
in strength. This is what we have for the 20th
century, from the Greeks and the Eomans, the
Jews and the Christians, from the traditions of
law, civility, and science, and the ideals of liberty,
fraternity, and equality which have become the
tuning forks of the conscience of man.

I have gone a wide circle in these remarks, and
I do not deny that the new Europe will surely not
be finished in a day. If the picture I have drawn
goes beyond nationalism and colonialism, it is not
because these forces have expired but only because
they are so plainly remnants of a waning past,
essentially irrelevant to the true present mission
of Europe. But I assure you that in this wide-
ranging sketch I have never departed from the
subject of Berlin. For the defense of Berlin is
also the defense of Europe, and the defense of
Europe is the defense of the United States. This
is true for the general reasons of respect for free
men and resistance of aggression which I stated
at the outset, but it is true in a larger and deeper
sense because of the role of Germany in the Euro-
pean future, and I would like to end with a few
words on this great topic.

In each of the three areas of traditional analy-
sis the role of Germany is central. In the Com-
mon Market the German role is indispensable; as
for the military defense of Europe, it has been
plain since 1950 that it could not be managed
without responsible German participation; and
the politics of European union are very largely
the politics of the new Germany— a constitutional
democracy increasingly integrated in the Euro-
pean whole.

Nothing in the cynical propaganda of inter-
national communism is more dangerous and de-
structive than the shameless attempt to deny to
the Federal Eepublic of Germany the credit of its
extraordinary political achievement in rebuilding
from the ashes of the Nazi disgrace a decent, peace-
ful, and liberal society. And by the same token
nothing is more important to the Atlantic com-
munity than that Germany should persist in this
basic course. For that there is required a con-
tinued understanding and partnership, both in the
broad purposes to which I have spoken this eve-
ning and in the confrontation of immediate

424



hazards like that which now exists in the Soviet
threat to Berlin.

The free men of Germany liave accepted the
restraints of partnership. In return they have
received our pledge of peaceful support for the
union of Germany. This was not a hard pledge
for us to give ; the debate among Americans dur-
ing World War II over the usefulness of dividing
Germany was always unequal, and it was deci-
sively settled in favor of union long before tho
new German government emerged. Tlie division
of Germany is a mordant sorrow to the Germans
and a danger to mankind. It takes no super-
human wisdom to understand the simple truth — a
truth beyond cold-war rivalries — that to insist
upon the division of Germany is to insist upon a
permanent threat to the peace of Europe. We
cannot prevent the Soviet Union from assuming
the grave responsibility of this dangerous insist-
ence upon division, but we can and must maintain
our own peaceful purpose of reunion.

There are other ways in which Germany is
threatened today, but most of them have the mark
of this issue of division versus union : the mark of
a dangerous and destructive insistence upon direct
humiliation of the free Germans. To this we
must be opposed. There are ways, we believe, in
which the reasonable interests of a reasonable
Soviet Government can be met; that is why we
believe in negotiation. But we can never accept
any settlement which undermines the trust, and
the commitment to freedom, of the people of the
Federal German Eepublic.

Germany is thus a central concern. This does
not make Germany all-powerful in the alliance.
We cannot grant — and no German statesmen have
asked — a German veto on the policy of the West.
A partnership of free men can never move at the
call of one member only. We can expect to have
differences — honest and friendly — with all our
allies. We can expect them to take account of our
position even as we take account of theirs. But it
remains a fundamental purpose of our policy in
Europe— and at Berlin— that the free people of
Germany shall not have any legitimate cause to
regret their trust in us.

Wliat is deeply ironic in the present crisis is
that our interest and purpose are precisely in pre-
venting what the Soviet Union claims to fear; it
is not our defense of Berlin, but the Soviet attack
upon it, which threatens to revive a German na-
tionalism of the sort that we all wish to keep in

Department of Stale Bulletin



the past. Not in the European Community, but
in unanchored detachment, Germany might again
threaten the peace of lier neighbors. Not in re-
union, but in anguished, wall-marked division, is
the temptation to adventure.

So the crisis in Berlin is the present touchstone
of our policy for Germany, and our policy for
Germany is the present touchstone of our policy
for Europe. What we do in the immediate crisis
we do not only for its own sake but for the sake of
a larger purpose. As we face the hazards of con-
frontation, as we work for effective negotiation,
we have the right and duty to bear in mind that
what we are defending, in Berlin, in Germany, and
in Europe, is the balance of hope and purpose for
the great society of freedom.

United States Agrees To Support
Tunisian Development Effort

The Department of State annomiced on Feb-
ruary 21 (press release 114) that the Secretary of
State for the Plan and Finances of Tunisia,
Ahmed Ben Salah, accompanied by his advisers,
had taken part in discussions that week with offi-
cials of the Department of State and the Agency
for International Development, including the As-
sistant Secretary of State for African Affairs, G.
Mennen "Williams, and the Administrator of AID,
Fowler Hamilton. As a result of these discus-
sions agreement was reached that the United
States will support Tunisia's long-term economic
development effort. It is expected during the
coming weeks that fonnal agreement on the nature
and extent of this U.S. assistance will be reached.

Dr. Pico Named Special Representative
of President in Dominican Republic

The White House announced on February 21 the
appointment of Eafael Pico as Special Eepre-
sentative of the President in the Dominican Ee-
public. Dr. Pico will assist in fashioning a strong
economic development program and in creating
the institutional framework for more effective
govermnent operations.

It was expected that Dr. Pico would arrive at
Santo Domingo on February 22 and immediately
begin to organize the U.S. AID mission in that
country.



U.S.-Japan Committee Called Model
for Scientific Cooperation

Remarks hy Secretary Rusk ^

I have received a very favorable report from
Ambassador [Edwin O.] Eeischauer on this first
meeting. I believe that scientific, cultural, and
educational exchanges contribute greatly to the
betterment of relations between states, to inter-
national understanding, and to the furthering of
man's knowledge. I therefore have a keen inter-
est in the results of this first science meeting in
Tokyo.

I note that the Committee has selected the sub-
jects of cancer research, animal and plant biogeog-
raphy and ecology of the Pacific area, and sci-
entific investigation of the Pacific Ocean as goals
in developing concrete forms of joint research.
Our Government looks forward to the next meet-
ing of the Committee and stands ready to receive
more specific recommendations for mutually sup-
ported projects.

After my talks with Dr. Kelly, I am convinced
that we are embarked on a course of action which
will bring great scientific benefits. I believe we
are creating a structure which will add to the
scientific knowledge of both Japan and the United
States, and a model for both nations in their
broader relations with scientists the world over.

The foremost task of our age is the establish-
ment of a viable and a just peace in which each
individual can contribute to tlie welfare and bet-
terment of himself, his family, and his neighbor.
Many of the world's statesmen are engaged in the
pursuit of this goal. But this search is not the
task simply of statesmen and governments. Sci-
entists also have a role to play. Working together
across international boundaries, they can materi-
ally aid our efforts to secure an enriched life for
all mankind.

I look forward to the splendid results which I
know will flow from these efforts so well begun.



' M.ade on Feb. 14 (press release 99) to Harry C. Kelly,
cbairman of the U.S. delegation to the United States-
Japan Committee on Scientific Cooperation, after Dr.
Kelly had presented to the Secretary the official report of
the first meeting of the Committee, held at Tokyo, Dee. IS-
IS. For test of a joint communique issued at the close
of the first meeting, see Bulletin of Jan. 8, 19G2, p. 66.



March 12, J 962



425



The United States in a Competitive World Economy



6y Joseph D. Coppock

Director^ Foreign Economic Advisory Staff ^



It is a pleasure to be here this evening as you
assemble to honor your fellow citizens who have
distinguished themselves by rendering special vol-
untary services to your commiuiity. I congi-atu-
late you on these fine achievements.

In thinking about this occasion I found myself
wondering what has happened to private charity
in the United States in recent years. With gov-
ernments, especially the Federal Government,
being pressured into doing so many things for
people that they used to do for themselves, it would
not be surprising to find that charity had declined,
despite our generally increasing prosperity.

Here are some facts. In 1960 Americans made
charitable contributions of $8,400,000,000. This
compares with $4,600,000,000 in 1950 and $1,200.-
000,000 in 1940. Even after allowing for an in-
crease in prices since 1940, the increase in giving
is notable. At present about half of the gifts go
to religious institutions and about half to hos-
pitals, education, and various welfare projects.
United Fimd contributions rose from $193 million
in 1950 to $458 million in 1960, with Illinois the
sixth highest State. National Red Cross contribu-
tions rose from $64 million in 1950 to $87 million
in 1960.

Gifts abroad by individual Americans rose from
$129 million in 1940 to $238 million in 1950 to
$333 million in 1960. Interestingly, these figures
rcpi'esent a declining percentage of total giving —
from 12 percent in 1940 to 6 percent in 1950 and to
4 percent in 1960. Private institutional gifts
abroad, mainly by religious groups, amounted to
another $300 million in 1960.



'■ Address made before the annual meeting of the Unitwl
Fund of Decatur and Macon County at Decatur, 111., on
Feb. 15 (press release 98 dated Feb. 14).



Clearly Americans are still willing to make
large voluntary gifts, both at home and abroad.
You can be proud of your own community's
achievements and of your fellow citizens' achieve-
ments.

I would be painting too rosy a picture, however,
if I did not point out that we Americans are better
able to give than we have ever been before — or
than any nation has ever been. Most of us do not
feel especially prosperous, probably because we are
always comparing ourselves with families other
than the Joneses, but we are well off by practically
any numerical comparison it is possible to make.
In fact the expected increase in the U.S. output
in 1962 is $50 billion, which is greater than the
value of the total output of every other country in
the world, with the exception of the Soviet Union,
the United Kingdom, Germany, and France.
Total U.S. output was over $500 billion in both
1960 and 1961. The State of Illinois alone pro-
duced output worth $30 billion in 1960. Only
eight foreigiTi countries produced this much out-
put — the four I just mentioned plus Canada,
Japan, Italy, and India, all four of which barely
surpassed Illinois. 'Wliile per capita real income
in the United States rose by 50 percent from 1940
to 1960, charitable contributions rose from only 1.2
percent to 1.6 percent of the total. In short, we
can afford our cliarity.

It is always interesting to speculate on the rea-
sons for the wealth or poverty of an area. "Why
is Illinois one of the most prosperous areas in the
entire world? For one thing it has over 10 mil-
lion people, a large percentage of whom are
liealthy, educated, energetic, dependable, and am-
bitious. Also, only a handful of countries have
the quantity or quality of farmhuul tluit Illinois



426



Department of State Bulletin



has. Then think of your mineral resources, your
transportation system, industrial establishments,
business firms, financial institutions, educational
institutions, hospitals, churches, civic and cultural
establishments. In addition no region in the
world is so well placed as Illinois in tlie middle of
a great rich market, unbroken by political bound-
aries. I am sure that all of you are proudly aware
of the fact that the center of U.S. population has
moved into the State of Illinois.

In recounting the factors underlying the pros-
perity of tliis State I have reserved to the last the
greatest of them all — the unmatched political sys-
tem under which we live, the system of liberty
under law, the system that encourages individual
initiative and yet facilitates cooperative action.
I would be remiss, at this time and in this place, if
I did not pay respect to the memory of our greatest
political figure — Abraham Lincoln — who led us
safely through the valley of the shadow of death
of our political institutions.

But we do not live in the world of Lincoln. We
live in a world of satellites, intercontinental mis-
siles, explosives of fantastic force, radiation
hazards, instant communication.

Military Power and International Cooperation

These scientific forces inevitably make the vari-
ous segments of mankind more dependent on each
other- — more subject to each other's bad behavior
as well as good. Meanwhile, local istic, national-
istic passions make the various segments of man-
kind more independent of each other. These
atomistic, anarchistic, antagonistic political forces
are held in clieck by only two things. One is mili-
tary might, principally that of the great powers.
The other is the spirit of cooperation which ex-
tends across national borders and which manifests
itself in such diverse forms as the United Nations
at one extreme and a convention to preserve
migratory birds at the other.

The checkreins represented by military power
and international cooperation are tenuous, how-
ever; the peace which we enjoy under the atomic
stalemate is a fragile one. Atomic power is not
going to remain the monopoly or oligopoly of the
great powers forever. Widespread possession of
atomic weapons is an awesome prospect.

While preserving our military posture, it is the
avenue of international cooperation that holds the
greater promise of reducing the risk of war and



preserving national identities. If international
cooperation is to perform tliis feat, it must take a
variety of forms, not simply getting together to
try to settle bitter disputes after they have broken
out. International cooperation can function and
does function in many difl'erent fields. The Or-
ganization of American States is an example of
political cooperation. Tlie North Atlantic Treaty
Organization is the most prominent example in the
political-military field. The International Bank,
the International Monetary Fund, the General
Agreement on Tariffs and Trade, and the Euro-
pean Economic Community are major illustra-
tions of intergovernmental economic cooperation.
Thousands of businessmen work with their
counterparts in other countries. Scores of scien-
tific, religious, and educational groups work to-
gether internationally. Indeed the facts of inter-
national cooperation are far ahead of our thinking
about the general idea.

International Trade and the Common Market

Tonight I wish to speak in some detail about a
particular kind of international economic coopera-
tion. It is, in fact, the most important kind of
international economic cooperation. It is not aid,
it is not investment, it is not technical assistance ;
it is international trade, trade carried on almost
entirely by businessmen. National governments
have it within their power, however, to bar goods
from other countries or to welcome them. They
have it within their power to harass international
movements of goods or to facilitate them.

Not only do national govermnents have it within
their power to resti'ict or promote trade ; they are
heavily engaged in the use of tariffs, quotas, sub-
sidies, export credits, et cetera. The effects are
never confined to one country. Restrictive actions
often evoke sharp retaliatory actions by other
countries, as did our Tariff Act of 1930. Expan-
sive actions evoke cooperative responses, as did our
initiative in negotiating the General Agreement
on Tariffs and Trade in 1947. Obviously the
actions which evoke cooperative responses are the
ones we should take and to which we should re-
spond, unless there are overriding reasons to the
contrary.

The year 1962 is a year of decision for U.S.
trade policy. One reason is that the Trade Agree-
ments Act expires on June 30. A much more
important reason is that the European Economic



March J 2, 7962



427



Community — the Common Market — is in the proc-
ess of becoming a great free trading area, com-
parable with the United States itself. As you
know, the United Kingdom has applied for mem-
bership, and other countries are expected to join
the original six : France, Germany, Italy, and that
complex familiarly known as Benelux — Belgium,
the Netherlands, and tiny Luxembourg. The Eur-
opean Economic Community was created by the
Treaty of Rome in 1957 and began operations in
1958. It is designed to bring about the full eco-
nomic integration of Western Europe by 1970.
One of the main features is the eventual complete
elimination of trade barriers within the Conunu-
nity; another is the establishment of a common
external tariff.

We Americans can take much satisfaction in
the emergence of this European economic union.
It represents the achievement of one of the goals
of our Marshall plan aid after World War II,
specified explicitly at the request of the U.S.
Congress. Even more important, it represents
political cooperation among countries — in partic-
ular, France and Germany — which have so often
been at odds with each other and shaken the world
as a result of their quarrels. The Common Market
provides economic cement for our NATO alliance.

This emerging economic unit symbolizes a
change in the relative economic position of the
United States. The postwar honeymoon is over.
We face stiffer competition with our friends. We
face an expanding international economic drive
by the Soviet Union. The European Economic
Commimity has both minus elements and plus ele-
ments for us. The principal minus element for
the United States is the disadvantage to which
our exports to Europe will be subject as a result
of the elimination of the internal European tariffs.
For example, before the Common Market went
into effect American and German manufacturers
encountered the same French tariff on particular
items, but with the Conunon Market in full effect
the Gennan manufacturers will not have to con-
tend with a French tariff at all, whereas the
American manufacturers will be faced by the Com-
mon Market tariff.

This is a real disadvantage, but it can be offset
by some plus elements. One plus element is the
expansion in European demand for American
goods which is almost certain to result from in-
creasing European prosperity, especially if our



producers really push their wares. Another po-
tential plus element is reduction in the Common
Market external tariff.

Trade Expansion Act of 1962

It is this possibility— of reduction in the Com-
mon Market external tariff — that the U.S. Govern-
ment can do the most about. We can do something
about it by a tried and true method, namely, by
reducing our own tariffs in return for reductions
in theirs. This is the method of international co-
operation. We cannot reduce their barriers by
raising or threatening to raise ours.

If the United States is to negotiate important
reductions in the European tariff, the President
of the United States has to have the power to
make reductions in the U.S. tariff which will be
important to the Europeans. The concessions on
both sides must be large, certain, and lasting —
not small, subject to withdrawal, and temporary.

The President has asked Congress for this
needed authority in the proposed Trade Expan-
sion Act of 1962, H.R. 9900, now before Congress.-
The new bill resembles the old Trade Agreements
Act, originally passed in 1934, in many respects,
but it also has some new features. It resembles
the old act in asking for general authority to re-
duce tariffs by up to 50 percent in return for sim-
ilar reciprocal concessions. It differs from the old
act in authorizing the President to reduce tariffs
to zero on products within categories of which the
United States and the European Economic Com-
munity together accoimt for 80 percent or more
of world exports. He would do this only for sim-
ilar reductions by the Europeans, of course. This
is the very important authority needed to deal with
the Europeans.

Another provision is designed to help the less
developed countries. The act would permit the
President to reduce or eliminate tariffs on primary
agricultural commodities, provided the European
Economic Commimity would do the same and pro-
vided the commodities were not produced in sig-
nificant quantities in the United States. The less
developed countries will need fewer loans or grants
if they can export more.

These are the basic powers that would be
granted the President imder the new act. Other



• For text of President Kennedy's message on trade, see
Bulletin of Feb. 12, 1962, p. 231.



428



Department of State Bulletin



sections of the act are designed to cushion or re-
lieve possible domestic economic disturbances
which might stem from tarilT reductions or quota
increases. These provisions are much more ex-
tensive than they liave been in previous versions
of the Trade Agreements Act. First, the Presi-
dent must get the opinion of the Tariff Commis-
sion on the economic cfTccts of proposed reductions.
Second, the reductions resulting from the negotia-
tions are to be applied in five equal annual stages,
unless the reductions are very small. Third, firms
or workers seriously advei'sely affected by tariff
reductions may obtain "adjustment assistance," to
enable them to adapt more readily to the changed
conditions. If whole industries are seriously ad-
versely affected by increased imports, the Presi-
dent could raise the tariffs or apply other import
restrictions, as well as authorize adjustment as-
sistance. It is especially imfwrtant that these
cushioning measures not defeat the basic purpose
of trade expansion.

In tariff debates in the United States it has been
customary to overstate the possible negative effects
of tariff reductions and to understate the certain
positive benefits. American consumers and pro-
ducers who buy from abroad gain from lower
tariffs. Also imports help restrain inflation, and
they provide competition for domestic products.
Our economic system is geared to stand competi-
tion, although people sometimes forget it. Im-
ports enable foreigners to earn dollars with which
to pay off their loans and to reduce their need for
aid. Imports also enable foreigiiers to buy our
exports. Exports cannot expand very much for
very long if imports do not expand. Loans, gifts,
and foreign-owned monetary reserves can finance
exports only within fairly narrow limits.

What Exports Mean to Illinois

Most Americans are more aware of imports that
compete or might compete with domestic goods
than they are of American exports. I should like
to take a few minutes to tell you what exports
mean to you in concrete terms. I could give you
the facts on a national basis, but instead I am
going to give you the facts for this very section of
Illinois, the 22d Congressional District, composed



Online LibraryUnited States. Dept. of State. Office of Public CoDepartment of State bulletin (Volume v. 46, Jan- Mar 1962) → online text (page 82 of 101)