action was taken, would not permit the withdrawn trade concessions to be restored to Czechoslovakia until that country was divorced from Communist domination or control. In short, it is our view that Mr. Strackbein has made no case for withdrawal from the agreement. Constitutional objections to the trade-agreements program by those who are not in sympathy with its objectives are not new. In reporting favorably on the Trade Agreements Act in 1945, the Ways and Means Committee commented on these issues as follows: "Five times now, beginning in 1934, this committee has given the most serious study to the so-called constitutional objections which have been raised by the opponents of the program, and our conclusion remains the same as in 1934: We consider that it is clear, on the basis of precedent and authority, that (1) no constitutional or other legal considerations require Senate ratification of trade agreements and (2) the Trade Agreements Act involves no improper delegation of legislative power." The real question at issue, to which Mr. Strackbein does not address himself, is whether the general agreement does or does not promote the foreign-policy objectives of the United States in the interest of the Nation as a whole. Under the general agreement, the tariff concessions provided for under most of the bilaterals concluded up to 1947 have been consolidated and greatly extended. A total of 34 nations are now parties to the agreement and three more are eligible to become parties. Nearly all major trading nations have thus negotiated substantial tariff concessions with one another. Furthermore, standards have been agreed upon for the limitation of the use of quantitative restrictions and other nontariff barriers to international trade. In a wide area where countries previously took unilateral action to restrict the importation of goods, without regard to the adverse consequences on others and without reference to any internationally recognized standards of conduct, they now operate in the light of mutually recognized principles. The important principle that governmental trade restrictions of all kinds are of common concern has been established, and a forum has been provided for mutual discussion of such problems under agreed rules. However, the significance of the agreement and of United States participation in it is even broader. The agreement now contains the bulk of the selective reductions in United States tariff rates which have been negotiated since 1934. Withdrawal would therefore require the immediate increase in the level of the United States tariff by about 50 percent, and would bring back into effect certain bilateral agreements, outmoded in their terms, which are now suspended. Since these outmoded bilateral agreements could not operate for long in practice, we would probably have to terminate them as well. This would bring the United States back to the Hawley-Smoot rates, which are about double the present level of our tariff. Unquestionably imports would be curtailed and other countries' dollar earnings would fall correspondingly, reducing their contribution to the rearmament program and creating a need for further direct aid from us. The blow to our allies would not be an economic one alone. In other countries, the inconsistency of our giving with one hand, through the Mutual Defense Assistance Program and through point 4, while taking away with the other would raise fundamental doubts regarding the bases of our leadership in the free world. These developments would affect both the ability and the willingness of our allies to make the sacrifices and readjustments that we are urging upon them. The recent Italian note reflects doubt already current on this subject, making it clear that various recent actions we have taken to restrict imports not only hamper Italy's efforts to rebuild and rearm by restricting her sales here but also undermine the ability of her leaders to justify a policy of partnership with the United States. Consequently, it is not too much to say that if we want effective partners in a mutual defense program, we must make it a task of high priority to restore confidence in our continued determination to pursue a policy which permits other countries to maintain satisfactory trade relations with the United States. Sincerely yours, JACK K. MCFALL, (For the Acting Secretary of State). [From the Congressional Record, March 28, 1952] GENERAL AGREEMENT ON TARIFFS AND TRADE EXTENSION OF REMARKS OF HON. ROBERT T. SECREST, OF OHIO, IN THE HOUSE OF REPRESENTATIVES, FRIDAY, MARCH 28, 1952 Mr. SECREST. Mr. Speaker, under leave to extend my remarks in the Record, I include the following letter from O. R. Strackbein, chairman of the National Labor-Management Council on Foreign Trade, Washington, D. C. : The Honorable ROBERT T. SECREST, THE NATIONAL LABOR-MANAGEMENT COUNCIL ON FOREIGN TRADE POLICY, House Office Building, Washington, D. C. DEAR MR. SECREST: I have your letter of March 5, 1952, in which you enclosed a reply from the State Department to a letter from you requesting their view on my broadcast entitled "Tariff Maverick" which was devoted to a discussion of the General Agreement on Tariffs and Trade. I am happy to have this opportunity to answer the State Department's comments. These were embodied in their reply to you, signed by Assistant Secretary Jack K. McFall. At the outset they say: "Mr. Strackbein's main suggestion is that the United States should withdraw from the General Agreement on Tariff and Trade. His arguments for this course are two: First, that the agreement was entered into without clear legal authority; and, second, that the agreement subjects United States governmental action to review by foreign governments." Mr. McFall then undertakes to answer these charges by a brief review of the legislative history of the trade agreements program. In seeking to establish the President's authority to enter into an agreement such as the General Agreement on Tariffs and Trade (GATT) entered into in 1947 at Geneva, the State Department relies only in part on the authorization contained in the Trade Agreements Act of 1934 which was in the form of an amendment to the Tariff Act of 1930. Under this original Trade Agreements Act of 1934 (which consists of sec. 350 added to the Tariff Act of 1930, in the form of an amendment) the President was authorized "to enter into foreign trade agreements with foreign governments or instrumentalities thereof" and to proclaim such modifications of duties and other import restrictions required to carry out any trade agreement entered into by him. Specifically, duty changes were limited to 50 percent, up or down; and the President could not place any dutiable item on the free list or put a duty on any item that did not already carry a duty. Finally, the President could suspend any such modifications (concessions) with respect to any country that discriminated against our commerce "or because of other acts or policies which in his opinion tend to defeat" the purposes of the act. This was a simple authorization to the President to make foreign trade agreements under which he might reduce or increase our tariff rates by 50 percent, add or continue in effect certain other import restrictions, and take retaliatory action against countries that discriminate against our commerce. Section 350 (i. e., the Trade Agreements Act of 1934) was a little over two pages in length and simple in its aims. Under it the United States negotiated agreements with nearly 30 separate countries before 1947. These were all individual bilateral trade agreements. Then, after 13 years of such bilateral dealing, the General Agreement on Tariffs and Trade was negotiated at Geneva, Switzerland, in 1947. This included a little over 20 countries, all bound together in one general agreement. This agreement, known from its initials as GATT, contained 35 articles and is 65 pages in length. It is to this agreement, which goes far afield from the original Trade Agreements Act of 1934 (sec. 350 of the Tariff Act of 1930) that my radio address referred, and not to the previous bilateral agreements. This fact was made clear enough and need not have been confused, as it was, by the State Department, as we shall see later. Now, the State Department, as said above, relies only partly on the Trade Agreements Act as justification for the exercise of the Presidential power to enter into an agreement such as GATT. Mr. McFall says in his letter: "In part, also, the President's authority to enter into the general agreement rests upon his constitutional responsibility for the conduct of our foreign relations." Later he says, "Constitutional objections to the trade-agreements program by those who are not in sympathy with its objectives are not new." He then quotes the Ways and Means Committee, from its report in 1945, as saying in part: "We consider that it is clear, on the basis of precedent and authority, that (1) no constitutional or other legal considerations require Senate ratification of trade agreements, and (2) the Trade Agreements Act involves no improper delegation of legislative power." Please note, Mr. Secrest, that the Ways and Means Committee was referring to the Trade Agreements Act and not to the General Agreement on Tariffs and Trade. The report quoted from was made in 1945. The general agreement was negotiated in 1947. My objections were to GATT and not to the previous bilateral agreements. The quotation from the Ways and Means Committee was therefore beside the point. GATT is something quite different from a mere agreement in which duty reductions are made. It has in it the makings of a super state exercising great powers over our trade and related economic matters. I said nothing about the constitutionality of the Trade Agreements Act, as might be inferred from Mr. McFall's defense; but referred to GATT, to which the quotation from the Ways and Means Committee does not apply. Only now do we come to the State Department's real answer to my objections to GATT. After saying that my other objection to GATT is that it involves review by other countries of congressional and Executive action, Mr. McFall says that in order to appraise this argument it is necessary to consider how the general agreement (GATT) operates. He says, "It must be emphasized that the parties to the agreement cannot overrule acts of Congress or of the Executive." This was not precisely what I had alleged in the radio address, but comes to about the same thing. How does the State Department explain away this charge? In the radio address were cited two instances in which GATT reviewed sovereign acts of the United States: (1) the action by which the United States restored the duty on certain fur-felt hats, after recommendation to the President by the Tariff Commission that this be done; and (2) our proposal to withdraw our trade agreement with Czechoslovakia. The State Department, in its letter to you, says: "On the other hand, the contracting parties to the agreement do have the right to consult with any contracting party concerning the discharge of its undertakings, and to seek compensation or take offsetting action because of the failure of any contracting party to carry out these undertakings." Mr. McFall (State Department) had just said, as already quoted: "It must be emphasized that the parties to the agreement cannot overrule acts of Congress or the Executive." Then he says the parties do have the right to consult. Obviously, the State Department is trying to show just how an agreement is not really an agreement. "Moreover," says Mr. McFall, "any contracting party can withdraw from the agreement on 60 days' notice." All this represents an attempt to show that GATT exercises no power of review, and that it merely exercises the right to consult. Evidently GATT is a very flimsy thing, without much meaning and certainly without teeth-a piece of paper that can be flouted at will by any one of the contracting parties. Or is it? This may not exactly be the case; for a little later, in his reference to the Fur-Felt Hat case, Mr. McFall states: "The working party (which had been appointed by GATT at the instance of Czechoslovakia to review the actions of the United States) found that there were no conclusive evidence that other action taken by the United States Government under article XIX constituted a breach of its obligations under the general agreement." Is it not strange that the "right to consult" confers upon this international body the right to appoint a working party which makes an elaborate analysis of United States action in the light of article XIX of the general agreement (GATT) to determine what? Whether we have consulted properly? Whether we have been discourteous? Not exactly. The McFall letter says: "The working party found that there was no conclusive evidence that the action taken by the United States Government under article XIX constituted a breach of its obligations under the general agreement." "A breach of its obligations" sounds somewhat more formidable than the "right to consult." That it is actually regarded much more seriously even by the State Department will become obvious later. At this particular point Mr. McFall, still apparently speaking for domestic consumption, says: "If the contracting parties had found otherwise (i. e., that the United States had breached its obligations), the United States would, as a matter of policy, have wanted to reexamine its action in the light of such a finding, but whether the other contracting parties agreed with the action or not, the United States would still have had the power to continue its action if it wished to.'” In another place Mr. McFall observes: "If these provisions (i. e., the right to consult, to take offsetting action, and the right to withdraw from the agreement) constitute 'review' in any objectionable sense of the word, then it follows that most international undertakings among nations, including those of a bilateral character, are objectionable and should be dissolved." In other words, the General Agreement on Tariffs and Trade (GATT) is just an innocent international agreement calling for consultation before taking action under it. No harm done; no real commitments involved; and nothing really serious intended. Merely the "right to consult." That there are hidden teeth somewhere in the agreement which give it more bite than the mere right to consult confers and which give substance to such words as "a breach of its obligations," quoted above, comes to light later in the State Department's letter. This happens in Mr. McFall's observations about the second instance of GATT review of official United States action, cited in my radio address. Involved in this instance was United States withdrawal from its trade agreement with Czechoslovakia, as required by the Trade Agreements Extension Act of 1951 (Public Law 50, 82d Cong., sec. 5). In my radio address I had said that even though withdrawal from the Czech agreement was required by an act of Congress, signed by the President, we were not free to do so without taking the matter before GATT. I asked why the State Department had found it necessary to go to Geneva when she was already under instruction by Congress to act. Answering my own question, I said that she went to Geneva not for original authority but for confirmation of the authority that had already been voted by our Congress. That this procedure was recognized by the State Department follows from the fact that before acting they did lay the proposal before GATT. Mr. McFall says: "In the other instance of 'review' cited by Mr. Strackbein, the United States itself requested the contracting parties to terminate United States obligations to Czechoslovakia. Congress had provided in the Trade Agreements Extension Act of 1951 that the United States terminate as soon as practicable' concessions to Soviet-dominated countries." In other words, by the State Department's own admission, the United States was in a position, because of our adherence to GATT, of having to request the contracting parties to sever our obligations to Czechoslovakia. Our Congress had spoken. It had required the President to suspend or withdraw the pact. The President had signed the act of Congress; but before carrying out this law, the State Department found it necessary to go to Geneva and ask in effect, "May we please do what Congress has instructed us to do?" Was this merely consultation? GATT voted on the question. It sustained the United States a second time. If we were willing to abide by these decisions when they favored us, what will it make of us if we refuse when they go against us? The State Department's letter lets us know what they themselves say. Figuratively, the cat has tired of playing and is now ready to dispose of the mouse. Says Mr. McFall: "Respect for international undertakings in the case of Czechoslovakia, as in the case of termination of our bilateral commercial agreement with the U. S. S. R., required that certain procedures be observed in accomplishing the termination." The teeth are beginning to show, but it is necessary to look closely. "Certain procedures" must "be observed," Mr. McFall says. These procedures, however, include the right of the other member nations of GATT to vote us down, to deny our petitions or to sustain those who complain against us. Remember, Mr. Secrest, that while "It must be emphasized that the parties to the agreement cannot overrule acts of Congress or of the Executive," the contracting parties to the agreement “do have the right to consult." This right of consultation includes these certain procedures that contain the quite effective power of review. What would have been our position had we not consulted in the two cases mentioned and had we not followed the decisions of GATT? The State Department has rather definite ideas on this. In his letter, Mr. McFall says: "To have ignored these undertakings (read ‘obligations') would have given the Soviet bloc a strong propaganda theme against the United States." Again, farther on, in assessing the possible effect of a withdrawal by the United States from GATT, he says: "The blow to our allies would not be economic alone. In other countries, the inconsistency of our giving with one hand, through the Mutual Defense Assistance Program and through point 4, while taking away with the other would raise fundamental doubts regarding the basis of our leadership in the free world. These developments would affect both the ability and the willingness of our allies to make the sacrifices and readjustments that we are urging upon them." There you have the sanctions of GATT. It is precisely because we should honor our agreements that membership in GATT is a very serious matter. It is precisely because we should carry out our obligations and not flout them that GATT represents something far beyond the right to consult. Either we enter our international agreements in good faith, with full intention to meet our commitments, or we play fast and loose in our international relations. Which position does the State Department occupy? When they say that we are bound by GATT, that we can withdraw, what sort of picture do they mean to draw of Uncle Sam in his conduct of international affairs? Do they wish us to stand by GATT when GATT supports us but to walk out if GATT goes against us? If not, then GATT exercises a power of review as tight as any. Yes, we can walk out. Certainly, we can behave execrably; we can be international heels. Is that the significance of the State Department's argument? If not, then we are indeed bound by GATT. This was what I assumed in the radio address, because I assumed that Uncle Sam honors his agreements. I still assume it. I assume that when we give our word in an international agreement we mean to carry it out in good faith and to abide by the rules and procedures and by the decisions arrived at in accordance with those procedures, whether they go in our favor or against us. That is why we should be careful of the kind of agreement we enter into; and the best way to be careful in these foreign agreements is to follow the constitutional processes. Under these circumstances it is clear that through our entry into GATT we have by an international agreement de facto bestowed the right of review by an international body over official acts of our Congress and our Executive. At no point have I said, Mr. Secrest, that we should never do this. We have done it in other spheres within certain limitations. What I have said is that the State Department in taking us into GATT has done so outside the treaty-making powers of the Executive and the Senate, and without specific legislative authority. I pointed out in my address that before we entered the United Nations, Congress passed the United Nations Participation Act, approved December 20, 1945. Also before joining the so-called World Court, the Senate ratified our action by passing a resolution of adherence, setting forth the conditions of our acceptance of its jurisdiction. Other instances could have been cited, among them membership in the International Labor Organization, the way to which was paved by a resolution of the Seventy-third Congress. The General Agreement on Tariffs and Trade lacks such legislative ratification in those of its parts that go beyond section 350, previously mentioned, which is the only legislative source of authority that underlies the trade-agreements program. Mr. McFall bases authority for the broader provisions of GATT on the Presidential power to conduct foreign relations. However, the Constitution grants to Congress the power "to regulate commerce with foreign nations" (art. 1, sec. 8). The upshot is that according to the State Department the Executive may go beyond the delegated power provided in the section 350 amendment of the Tariff Act of 1930 (the Trade Agreements Act) to enter into trade agreements for the 50-percent adjustment of the tariff and a few related steps. For this enlarged power the President, according to the State Department, needs no additional authorization from the Congress or from the Senate alone. This places the State Department, as the right arm of the Executive in conducting foreign relations, in the position of making broad international executive agreements which in the usages, practices, and realities of international relations fritter away our national sovereignty just as surely and effectively as would a treaty concurred in by the Senate. Since a treaty may at least be denounced 22984-52--16 |