we set forth on pages 117 and 118 of our statement the text of a section that would provide such authority. In order that the President would be informed as to the amount by which imports of articles of importance to developing countries under preferences should be limited when they originate in developed countries to give the developing countries this opportunity, we provide in our legislative proposal that the Secretary of Commerce would from the data maintained by the Commerce Department present to the President summaries of domestic production, shipments, imports, exports, and apparent consumption of the articles of interest to developing countries with recommendations as to the extent to which it would appear necessary quantitatively to limit imports from the developed countries to provide this kind of opportunity to the developing countries. Because so many of the developing countries have now entered into arrangements with the European Economic Community under which they grant reverse preferences to the Economic Community, we pointed out that the authority in the bill ought not to be exclusively the power to grant generalized preferences to developing countries, but, rather, in those cases where some developing countries were unwilling to terminate their agreement with the European Economic Community by which they provided reverse preferences for the products of the Economic Community in their markets, the President ought to be free to grant on a regional basis preferential tariff treatment. I have referred specifically to what we regard as a very important objective of our foreign economic policy, the establishment of a Western Hemisphere Customs Union by granting preferential tariff access to products of Western Hemisphere countries. Finally, on the subject of preferences, in order that the President might have as much flexibility as possible, we pointed out that the bill ought not to require him, if he decides to grant preferences, always to grant duty-free treatment. He ought to be allowed the judgment that in special circumstances customs treatment more favorable than most favored nation treatment would be of interest to the developing countries and there might be some particular wisdom in the President reserving total duty-free treatment for later extension to meet some additional objective. This concludes my attempt to present as concisely as possible, Mr. Chairman, an overview of a statement which the Council has endeavored to make as comprehensive as possible in the interest of being of assistance to the committee. I thank you for the opportunity to be here and to be afforded as much time as your patience has allowed me to have. [Mr. Stewart's prepared statement follows:] STATEMENT OF EUGENE L. STEWART, GENERAL COUNSEL OF THE TRADE RELATIONS MR. CHAIRMAN AND MEMBERS OF THE COMMITTEE: I am Eugene L. Stewart, General Counsel and Executive Secretary of the Trade Relations Council of the United States, Inc. This is a national trade association whose members include manufacturing corporations, large and small, and trade associations of selected manufacturing industries. The manufacturing activities of the Council's members represent in the aggregate a fair cross section of U. S. manufacturing activity in most major industry sectors. The Trade Relations Council and its predecessor organizations have for nearly a century been continuously interested in the single subject of our Nation's foreign economic policy, including the substantive content of domestic law, U. S. trade agreements, and administrative and judicial decisions in foreign trade matters, as well as the policies and procedures of the Executive Branch of the Government in administering the authority for the regulation of foreign trade delegated to it by the Congress. I. BASIC POSITION IN REGARD TO H. R. 6767 The Executive Branch through its formulation of H. R. 6767 seeks the virtually unlimited grant of power by the Congress to the President to reduce or eliminate duties; modify customs valuation, quantity determination, and marking rules; and modify or repeal other domestic laws which relate directly or indirectly to the importation of merchandise into the United States. The bill calls for a grant of power which vastly exceeds the theretofore unprecedented grant of power given by the Congress to the President in the Trade Expansion Act of 1962. The legislative decision called for by the introduction of H. R. 6767 and the action of this Committee in scheduling public hearings and otherwise charting a legislative course which implies the enactment of a major trade bill this year is of major significance, whether viewed from Constitutional, political, economic, or social concerns. Whereas all legislation enacted by the Congress must flow from a grant of power to the Congress in the Constitution, foreign trade legislation involves the additional aspect that the subject matter of the legislation falls squarely within a particular responsibility which the Constitution vests in the Congress; namely, the regulation of foreign commerce. As interpreted by the Supreme Court of the United States, an attempted delegation by the Congress of powers reserved to it under the Constitution is valid only if the Congress lays down in the legislation a guiding standard or an intelligible principle which carefully defines the particular facts and circumstances which when found to exist are to constitute the basis for authorized actions by the President under the delegated authority. The initial Trade Agreements Act in 1934 contained such a guiding standard or intelligible principle, as did its successive extensions until 1962. The precision of the earlier legislation was considerably blurred by the vaguer criteria for action set forth in the 1962 Act. The bill now pending before you, H. R. 6767, would complete the journey from specifically delineated standards and principles to such generalized bombast as to all intents and purposes would permit the President to act without regard to any particular intention on the part of the Congress. The delegation by the Congress of a portion of its power and authority specifically reserved to it under the Constitution carries with it serious and heavy responsibilities for the Congress and the cognizant legislative committees. Principal among these responsibilities is the burden of conducting legislative oversight with such frequency and thoroughness that the Congress can know authentically whether its intention in delegating such power and authority to the President is being faithfully observed in the manner in which the Executive administers such powers. I regret to say that this Committee has been quite diffident about conducting legislative oversight of this type, primarily limiting its interest, so far as the public is aware, to a consideration of what Administrative officials have to say when they appear before you in support of each new demand for increased delegation of power, as in the case of this bill. The circumstances which confront this Committee and the Congress at this time are especially poignant in this context. The Executive used the very large grant of power given to it in the Trade Expansion Act of 1962 to make very deep reductions in U. S. import duties on manufactured products. While the intent of the Congress was that the Executive would secure reciprocal concessions from our trading partners adequate to provide U. S. exports with equivalent access to the markets of the nations which would enjoy the benefit of the U. S. tariff concessions, the hard and regrettable fact is that this objective was not achieved by the Executive in the Kennedy Round negotiations. When the United States had been unsuccessful in the Dillon Round of trade agreement negotiations in 1960 in securing specific concessions from the European Economic Community favoring U. S. exports of agricultural products, it was realized that the principal effort for securing commitments from the Common Market which would assure reasonable access for U. S. exports of agricultural products on an expanding basis to that market would have to be made in trade negotiations in which the President possessed more authority than was available to him in the Dillon Round. When the 1962 Act was enacted, it was clear to everyone concerned with the legislation that a major objective of the authority granted to the President was to put him in a position to negotiate meaningfully with the European Economic Community and other developed nations in order to protect the important position which U. S. agriculture had established for its products in export markets. When the late and great statesman Christian Herter served during the closing months of his life as the President's Special Representative for Trade Negotiations, it was his firm resolve that tariff concessions on industrial products would be granted to the EEC and other developed nations only if they made concessions in the trade agreement negotiations which would provide such assured access for expanding exports of U. S. |