GOVERNMENT
Tariffs Come Up Again W o r l d T r a d e W e e k stirs u p n e w controversies w i t h chemical industry subject of much attention -PRESIDENT Eisenhower's trade pro-•• gram, supposedly in die Congressional deep freeze for this session, was thawed somewhat last week by hot blasts from Capitol Hill and elsewhere. The chemical industry, vitally interested in the subject of tariffs and trade, came in for its share of attention along the way. Renewed interest in the trade policy came with the observance of World Trade Week. T h e week was less than 24 hours old when the fireworks began. First voice heard was that of freetrader Charles P. Taft, brother of the late senator from Ohio. Taft heads the Committee for a National Trade Policy, which has been pushing hard for adoption of the President's program. At a conference sponsored by the Washington Board of Trade he singled out the chemical industry—and persons he says are closely connected with the industry—for attack. Taft's chief target was O. L. Strackbein, chairman of a protectionist group known as the Nation-Wide Committee of Industry, Agriculture, and Labor on Export-Import Policy. Biggest client of the group is the chemical industry, Taft maintains. Taking issue with Strackbein's contention that freer trade would threaten the chemical industry, Taft asserts this position is based on "wild statistics." Among these questioned figures is an estimate that 5 million people are employed in industries affected by imports. The chemical industry employs 818,000, one sixth of the total. "This industry produces $18.7 billions a year/' states Taft, bringing out some figures of his own. "It exports $800 million worth and the imports are $295 million." But 4 5 % of this is fertilizer, Taft says, which is "not in question here." H e goes on to say that only 1% of imports by any definition are competitive. T h e really competitive items, according to a Tariff Commission study last year, are $9 million worth of synthetic organic chemicals from Germany, Switzerland, and the United Kingdom, "or one twentieth of 1%," he adds. It takes only between 450 and 1250 people to make this much organic chemicals in the United States, so why should there be talk of nearly a million "threatened" jobs? Taft asks. Strackbein Replies. Taking u p the challenge, Strackbein countercharged 2206
that perhaps Taft's figures, rather than his own, were in error. Particularly puzzling, he says, is the figure of 818,000 chemical industry employees. H e points out that only about 700,000 are employed in t h e whole industry. His estimate of the number of chemical employees affected by imports only includes those employed in making organic and related chemicals, the most vulnerable to foreign competition. The figure Strackbein quotes is 300,000. Taft's figures for industry production are only about a billion dollars too low, Strackbein says, and exports are approximately correct. But the import figures are much higher than Taft indicates, according to Department of Comm e r c e figures, which show the U . S. imported nearly a half billion dollars worth of chemicals last year. Fertilizers accounted for only 3 0 % of the total, not 4 5 % . Strackbein also casts doubts on Taft's mathematics. If only 1% ( $ 2 . 9 5 million, from Taft's estimate of imports) of total chemical imports are competitive, how can $9 million worth of synthetic organic chemicals—a segm e n t of the industry—represent more t h a n three times t h a t figure? T h e n u m b e r of people cited by Taft a s n e e d e d to make an amount of organic chemicals in the U. S. which is equivalent to imports also is misleading, according to Strackbein. H e says if t h e American organic chemicals industry were destroyed by foreign competition, many thousands more would b e t h r o w n out of work. Summing up, Strackbein admits t h a t in the sprawling chemical industry, not all segments would be hit by lower tariffs. Some—such as the synthetic organics producers—would b e seriously threatened. These segments, he feels, should present a vigorous case before Congress and the people. Rumblings in Congress. Both men had vocal support for their positions in the House. In Taft's corner was Rep. Robert W . Kean ( R - N . J.), w h o earlier introduced a bill to extend the Reciprocal Trade Agreements Act for three years. Kean states that the President's program should be quickly adopted. Unless America's friends abroad know where w e stand and in what direction we are going, they cannot plan their economic future, h e adds. CHEMICAL
Trade policy is a part of foreign policy, h e continues. In addition our military security is interlinked with the security of oui" allies. Tied up with both elements are the resources of the rest of the world. If these resources are mobilized against us, our security is in jeopardy. But Kean made clear that h e was not favoring free trade completely. Like most Republican members of Congress, he says he favors moderate tariffs which will continue to grant reasonable protection to industry. Championing Strackbein's cause was Rep. Oakley Hunter (R-Calif.), who introduced a bill which would drastically revise the present tariff set-up. The bill would strip the President of the right to set aside recommendations for tariff adjustments made b y the Tariff Commission. Congress would have the final power to approve any hike in tariff rates under the bill. The new plan i s seen as a boon to protectionists, since it promises more relief than heretofore has been granted under "escape clause" and "peril point" provisions of reciprocal trade agreements. These provisions are designed to protect American industry from damage under such agreements. U p to now, only three industries have been given protection under t h e escape clause, none of which could b e classed as related to the chemical industry. The Tariff Commission has rejected petitions for estrogenic substances, crude petroleum and petroleum products, aluminum and its alloys, and lead bearing materials. But throughout all this heated political maneuvering, one figure—Rep. Daniel Reed ( R - N . Y.)-should not be overlooked. His House Ways and Means Comittee must initiate any new trade legislation, if any is forthcoming. Reed, as a member of the President's Randall Commission, was violently opposed to trade recommendations now incorporated into the bill to extend reciprocal agreements for three years. There seems to be no indication that his position has changed. Many Congressional leaders believe the best Eisenhower can hope for is a one year extension of the present agreements. The tariff battle would b e postponed until after the elections. There also is a growing indication that the protectionist elements in Congress will succeed in delaying even this compromise move. Should the current act expire as scheduled on June 12, however, many existing agreements would continue in force beyond that date. Without a new law the President could not enter into new agreements. AND
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