Current Economic Developments, Lot 70D4671

Extract From Bulletin No. 151, May 17, 1948

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Department Views on Proposed Bill Extending Trade Agreements Act

The Department is opposed to the proposed bill for a one-year extension of the Reciprocal Trade Agreements Act through June 30, 1949, sponsored by Representative Gearhart and recently approved by the Ways and Means Committee of the House of Representatives. We believe that the proposed bill’s requirements make impossible the negotiation of a trade agreement within the time allowed and that, although the bill appears to permit the program to continue, it actually sets up such conditions as to make it unworkable.

The bill provides that after the preparation of the usual published list of import products to be considered for the possible granting of concessions in the agreement, and before entering into such agreement, the Tariff Commission shall report to the President with regard to such products: 1) the extent to which duties and other import restrictions [Page 949] may be modified; or 2) the extent to which additional import restrictions may be imposed; or 3) the maximum periods (if any) for which obligations may be undertaken to continue existing customs or excise treatment, without causing or threatening serious injury to domestic producers or impairing the national defense. The bill also provides that the President shall submit to Congress for its veto any agreement which would involve any tariff action exceeding that recommended in the Tariff Commission report.

Department’s Position—The Department finds the proposed bill objectionable in the following respects: One-year extension provides insufficient time to organize effectively and carry through necessary negotiations, especially since the requirement that no agreement may be entered into until the Tariff Commission has reported to the President may cause considerable delay. The bill places upon the Tariff Commission, in effect though not in terms, the sole responsibility for determining how far a tariff rate may be cut. This would concentrate upon the Commission the full weight of pressures of special interests. The Department feels an unnecessary burden is placed on the Commission in the requirement that it determine for each product considered the maximum tariff concession which could be made without injury, regardless of whether as a matter of policy and balance in the negotiation the President would wish to offer that much of a cut. Also objectionable is the requirement that the Tariff Commission should not participate in the recommendations to the President nor in the negotiation of any agreement. Thus, the President is deprived of the services of competent officials. The Department feels also that the President would be put in an improper position in the event he found it in the public interest to exceed the limits set by the Tariff Commission. He would have to submit to the Congress the decision of a disagreement between himself and an administrative agency which, though created by Congress, is nevertheless operated by his own appointees.

  1. Master set of the Department of State classified internal publication Current Economic Developments for the years 1945–1969, as maintained in the Bureau of Economic Affairs (FRC Accession No. 72, A6248, Boxes 218–224).