100.4 FEP/9–154
Memorandum of Conversation, by the Assistant Chief of the Commercial Policy Staff, Office of Economic Defense and Trade Policy (Weiss)
- Subject:
- Meeting of Randall Committee1 on General Review of Administration’s Foreign Economic Policy Program
- Participants:
- Mr. Clarence B. Randall, Special Consultant to the President
- Mr. John H. Stambaugh, Assistant to Mr. Randall
- Mr. Benedict, White House staff
- Messrs. Overby, McNeill and Hebbard, Treasury
- Mr. Hutchinson, Budget
- Mr. Rossiter, Agriculture
- Mr. Marget, Federal Reserve Bank
- Mr. Wormser, Interior
- Mr. Thorpe, Defense
- Messrs. Anderson and Simpson, Commerce
- Mr. Arnow, Labor
- Messrs. Waugh and Weiss, State
General
Mr. Randall indicated that the purpose of the meeting was to take a long look ahead and review the elements in the President’s foreign economic policy program for the coming year.
He indicated that the “party line” remains the Randall Commission Report and the President’s message of March 30 on foreign economic policy. He said that those points of the message which were not accomplished were ones which he felt should be pursued. He requested any ideas that people may have. He said that the feeling he gets of opinion around the country is that the President’s foreign economic program is right, that there were good reasons why the Administration could not move ahead farther last year, and that it should move ahead on the unfinished elements in the program this coming year.
Kean Bill2
Mr. Randall indicated that it was his view that the Kean Bill should be reintroduced. Mr. Randall reported that Congressman Kean gives every indication that he is prepared to serve again as an enthusiastic spokesman for the bill.
Mr. Randall noted that there were some suggestions that perhaps the bill should be strengthened and requested any views on this point. The general consensus of the group, as reflected in specific comments by Messrs. Marget, Overby and Anderson, was that it would be better to leave what has already been agreed upon alone and keep the bill as it is.
[Page 88]Administrative Machinery
Mr. Arnow raised the question as to whether the Administration should not try to determine before the next session of Congress as to how the authority in the Kean Bill should be administered by the Government and be prepared to envisage any changes which might be made in the existing administrative arrangements for conducting the trade agreements program and other elements in the Administration’s foreign economic policy program. It was felt that Mr. Arnow had raised an important point which should be examined. It was agreed that the Trade Agreements Committee should study the matter and report back to the Randall Committee.
Customs Field
Mr. McNeill reported on what had been accomplished in this field and the present status of various customs matters. As regards the matter of simplification of tariff classifications, Congress had passed the bill requiring the Tariff Commission to study the matter and report to the Congress and the President the tariff simplifications which might be made.3 The question remained of getting authority from the Congress to put simplified tariff classifications into effect, and this in turn raised the question of getting approval from the Congress of standards on the basis of which it might delegate such authority to the President. Mr. McNeill indicated that the next session of Congress, after the Tariff Commission had made its preliminary report, might be the time to seek such standards.
As regards valuation, Mr. McNeill indicated that the Jenkins Bill4 had been killed and that there, therefore, remained the question of getting further action in this field. To this end Treasury is now making a further study of the factual situation in order to provide effective answers to questions which had been raised on the Jenkins Bill. Mr. Randall indicated that it was important to keep working on the chemical industry in order to lessen its opposition.
Mr. McNeill noted that under the legislation passed this year Treasury was instructed to maintain a continuing review of customs administration with a view to lessening the obstacles such administration may present to trade. Mr. McNeill indicated that Treasury plans to have further recommendations on this matter before the next session of Congress.
Mr. Randall stressed that it would be extraordinarily helpful to our relations abroad if Treasury could from time to time make some announcements of things it was doing to simplify our customs [Page 89] administration. He observed that there was enormous interest on the part of foreign countries in this matter and that any steps we took to make our customs administration less complicated would have great effect abroad. He urged Treasury to see what it could do in this regard.
As regards the Frelinghuysen Bill5 on tourist travel, Mr. Anderson indicated he was discouraged about the possibility of getting Congressional action on it. The view of the group was that efforts should be continued to get such action. Mr. Randall said that he thinks the bill is a good idea and that he will keep it in the program. Treasury indicated that it was working with Commerce to develop statistical information on travel.
Foreign Investment
Mr. Anderson raised the question as to whether it would be desirable to make a new approach on the matter of tax exemption for investment abroad in view of the opposition which had arisen to this proposal in the last session of the Congress. He suggested making bilateral agreements on investments as a basis for obtaining income tax exemption. Mr. Waugh indicated that he had some concerns about such an approach. Mr. Overby said that Treasury had looked into the matter previously and did not take a favorable view on this approach. Mr. Randall stated that his Commission had studied this possibility but decided against it. He suggested that Treasury study the matter and that it be discussed with Mr. Whitney,6 who was responsible for the investment field on the Randall Commission.
The foregoing discussion led Mr. Anderson to ask whether the door was open, so far as possible inclusion in the President’s program was concerned, to new thinking in the field. Mr. Randall replied affirmatively. He emphasized that what he had tried to indicate earlier was that the “tone, direction and substance” of the President’s March 30 message was to be taken as the mandate on the basis of which the Administration was to operate, but this did not preclude possible changes on particular aspects.
Buy American Act
It was agreed that it would not be desirable to seek any legislation in the next session for the repeal of Buy American legislation.
In connection with the recent decision of the Cabinet on the policy to be applied with regard to the Buy American Act but not to issue any formal order for the time being to implement the [Page 90] policy, Mr. Thorpe raised the problem of enforcing the policy without any such formal order. He expressed doubt as to the feasibility of operating without a formal order and pointed out that to his knowledge no directive had gone out to U.S. fleet services abroad and that, accordingly, their procurement operations could not have been affected by the recent Cabinet decision.
Escape Clause and Peril Point Provisions7
Mr. Randall indicated that suggestions had been made that the peril point and escape clause provisions in the Trade Agreements Act should be repealed. He asked for views on this point. Mr. Waugh doubted that it would be possible to get either provision repealed. This appeared to be the consensus of the group.
Question was raised as to whether it might be possible to eliminate the peril point while retaining the escape clause. The general view appeared that it would not be possible.
It was pointed out that while it might not be possible to eliminate the escape clause, it was worth considering whether something might not be done so as to prevent frivolous applications and immediate resubmittal of applications on which escape clause action had just been turned down. It was suggested that perhaps the Act should be loosened up so as to give the Tariff Commission the discretion it once had to throw out applications for action when there was an a priori case against such action. Mr. Randall thought this was a good idea and suggested that it be discussed with Mr. Brossard.8
50–50 Shipping Provisions
There was discussion as to whether an effort should be made to eliminate the 50–50 shipping provisions. It was suggested that perhaps the 50–50 requirements might be waived in cases where the President might negotiate a reciprocal agreement with other countries prohibiting such preferences. Mr. Hutchinson expressed doubt about the acceptability of this approach and suggested that it would be wise to examine the question of direct subsidy as a substitute for 50–50 requirements.
Mr. Waugh expressed doubt as to the wisdom of attempting to seek action for repeal of the 50–50 shipping requirements next year. He pointed out that the Administration will have enough on [Page 91] its hands to get through the major elements of its program in the trade field and that it should, therefore, concentrate on these elements and not take on additional burdens in the shipping field.
Mr. Weiss noted that there may be a possibility that the elimination of the 50–50 requirements only for countries with which reciprocal agreements had been concluded might be inconsistent with non-discrimination commitments the United States might have under FCN treaties. He suggested that if this approach were to be pursued, study should be given to this aspect.
Agricultural Provisions—Section 22
Mr. Randall called the attention of the group to the importance of doing something about Section 22 and our agricultural commitments in the GATT.
Reference was made to the statement on agricultural policy9 worked out in the Francis Committee.10 While it was agreed that this was a step forward, Mr. Randall noted that the question still remained of how to adjust our agricultural commitments in the GATT in the light of Section 22.
Technical Assistance Program
Mr. Overby reported on the status of SUNFED and the proposal for an International Finance Corporation.11
Mr. Arnow noted the failure of Congress to make any appropriations for the UN technical assistance program in 1955. He urged that the Administration should seek such an appropriation. Mr. Randall raised the question as to whether this was a point which should go into the State of the Union Message.
Surplus Disposal12
Mr. Thorpe raised the question of U.S. measures in the field of surplus disposal and stressed the necessity for reassuring foreign countries in this regard.
Other Matters
There was brief reference to the question of the travel tax in Latin America and to developments in the field of currency convertibility.
[Page 92]As regards the Delegation to the coming GATT session,13 Mr. Randall announced that Messrs. Parker14 and Fleming15 had accepted invitations to be on the Delegation. Mr. Waugh reported that Congressmen Cooper16 and Simpson17 and Senator Gore18 were to be on the Delegation but that Senator Millikin19 had declined.
Mr. Randall reported that Mr. Schram of Iowa had been appointed as the new Director of the Coleman Committee.20
- See the editorial note, p. 49.↩
- H.R. 8860, providing for extension of the President’s authority to enter into trade agreements under Section 350 of the Tariff Act of 1930, was introduced by Representative Robert W. Kean (N.J.) on Apr. 15, 1954.↩
- Reference is to the Customs Simplification Act of 1954 (Public Law 768), approved Sept. 1, 1954; for text, see 68 Stat. 1136.↩
- Apparent reference to H.R. 9347, amending the Tariff Act of 1930, introduced by Representative Thomas A. Jenkins (Ohio) on May 26, 1954.↩
- Reference is to H.R. 8352, providing for an increase in the duty-free allowance for tourists, introduced by Representative Peter Frelinghuysen, Jr. (N.J.) on Mar. 11, 1954.↩
- John Hay Whitney.↩
- The peril point provision was embodied in Section 3. of the Trade Agreements Extension Act of 1951. That section of the act provided for a finding by the United States Tariff Commission to indicate the limit or point to which a tariff rate might be reduced without causing or threatening to cause serious injury to the domestic industry producing like or competitive articles. For information concerning escape clause provisions, see the memorandum dated Feb. 25, 1953, under “No-injury Test,” p. 151.↩
- Edgar B. Brossard, Chairman, U.S. Tariff Commission.↩
- Reference is to the “Statement of Policy on Foreign Trade as Related to Agriculture,” released by President Eisenhower at Lowry Air Force Base, Denver, Colorado, Sept. 9, 1954; for text, see Public Papers of the Presidents of the United States: Dwight D. Eisenhower, 1954, pp. 841–843.↩
- Apparent reference to the Interagency Committee on Agricultural Surplus Disposal (commonly called the Francis Committee after its Chairman, Clarence Francis), formally established on Sept. 9, 1954.↩
- For documentation on these subjects, see pp. 227 ff.↩
- Of agricultural products.↩
- Reference is to the Ninth Session of the Contracting Parties to the General Agreement on Tariffs and Trade, held in Geneva, Oct. 28, 1954–Mar. 7, 1955. A list of the members of the U.S. Delegation to the Ninth Session is printed in the Department of State Bulletin., Nov. 8, 1954, p. 711.↩
- Cola G. Parker, Chairman, Board of Directors, Kimberly–Clark, Inc., Neenah, Wisconsin.↩
- Lamar Fleming, Jr., President, Anderson, Clayton and Co., Houston, Texas.↩
- Jere Cooper (D.–Tenn.).↩
- Richard M. Simpson (R.–Pa.).↩
- Albert Gore (D.–Tenn.).↩
- Eugene D. Millikin (R.–Colo.), Chairman, Finance Committee.↩
- Reference is to the Committee for a National Trade Policy, commonly referred to as the Coleman Committee after its Chairman, John Coleman, President, Burroughs Manufacturing Company.↩