30(J)

MR. STEWART

Hence, the United States cannot be understood to have suffered an amend-
ment or repeal of its countervailing duty statute as to the subsidization
of foreign exports to the United States by the remission of internal
taxes on such exports.

Nevertheless, for the most part the Treasury Department simply
allows countervailing duty complaints directed to the remission of foreign
taxes to gather dust without action, except in the singular circumstance
that the complainant is able to prove that the amount of tax remitted or
forgiven exceeds the amount of internal tax applicable to the like product
when made for domestic consumption.

It is true that the Williams Commission advised the President
to make more vigorous use of the countervailing duty statute and that
the Administration has belatedly turned its attention in that policy
direction, as shown by its welcome decision in the Michelin tire case.

One swallow, however, does not make a summer, and it is essential that the countervailing duty statute be amended to specify that the

GOVERNMENT

MR. STEWART

remission by foreign countries of internal taxes paid with respect to
products produced for export, or the forgiveness of internal taxes with
respect to such products, or the discrimination in price on raw materials
sold for use in the production of goods for export in comparison with
goods produced for consumption in the home market, constitute bounties
or grants which are to be remedied by the imposition of the additional
duties specified by the statute.

Accordingly, it is recommended that Section 303 of the Tariff
Act of 1930 (19 U.S.C. 1303) be amended by adding at the end thereof the
following:

"The term 'bounty or grant' as applied to imported merchan-
dise shall be deemed to include, by way of illustration but
not of limitation, the entire amount of any remission of
any internal tax paid in the country of production or the
country of exportation with respect to such merchandise,
the entire amount of any exemption of such merchandise
from any internal tax, or the entire amount of the differ-
ence in price at which any constituent material utilized
in the production of such merchandise has been sold to the
producer thereof and the price at which such or similar
merchandise is sold to producers of the same general class
of merchandise for sale other than for export to the United
States.

GOVERNMENT

30(K)

TITLE III CHAPTER 4 UNFAIR PRACTICES IN IMPORT TRADE SEC. 350. AMENDMENTS TO SECTION 337 OF THE TARIFF ACT

31(A)

MR. STEWART

The Administration bill would pare the scope of that provision
down to the point where it would be limited entirely to the importation
of articles which would infringe a United States patent. The balance
of the jurisdiction over unfair trade practices would be transferred
to the Federal Trade Commission. While it is true that the great majority
of cases which have been brought under this section of the law deal with
patent infringement, it is also true that the present scope of the statute
embraces any act which within the common law concept of unfair methods
of competition would be a violation of the common law.

Section 337 is potentially of great importance in keeping
the channels of foreign commerce of the United States free from the
proliferation of unfair methods of competition. The very presence of
the remedy acts to some extent as a deterrent in relation to the develop-
ment of practices on a substantial scale which would violate common law
concepts of fair methods of competition.

The Trade Relations Council believes that the Tariff Commission

GOVERNMENT

The Stewart paper opposes the proposed amendments to
section 337 for two basic reasons. First, it states that
the Tariff Commission is more expert in evaluating trade
practices in import trade and their effect on domestic
industry than is the Federal Trade Commission. And second,
it suggests that a single expert agency should deal with
a situation involving the utilization by a foreign industry
of a combination of unfair methods of competition in
penetrating the U.S. market, so as to enable relief to be
granted, more efficiently.

It should be noted at the outset that section 350 of
the trade bill merely transfers jurisdiction to investigate
unfair methods of competition other than patent infringement
cases to the Federal Trade Commission. It does not narrow
the scope of practices which can cause an exclusion order
to be issued. Virtually all of the cases brought under
section 337 since its enactment in 1930 have dealt with
patent infringement, in large part because several other

31(B)

MR. STEWART

is more expert in evaluating trade practices in the import trade and their

effect on domestic industry than is the Federal Trade Commission. We oppose
the change.

Particularly in recent years, U. S. commerce has been victimized
by the development of unfair methods of competition which include systematic
dumping, government subsidization of exports, and the like. While the
Antidumping Act and countervailing duty statute are directly related to
specific forms of unfair acts in the importation of articles into the
United States which are recognized as unfair methods of competition, they
are not necessarily an exclusive remedy for dealing with such acts.

If a particular foreign industry brought into play a combination
of unfair methods of competition as a basis for its program of penetrating
the United States market, it would be necessary to have a statute such
as Section 337, which would enable a single expert agency to deal with
this collection of practices as an entity or as a related case, if piece-

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statutes deal with other specific unfair practices, e.g.,
the Antidumping Act of 1921, section 303 of the Tariff Act
of 1930 (countervailing duties), the Sherman Act, and the
FTC Act. To the extent that unfair practices other than
patent infringement, dumping, and subsidization will take
place in the future, they will probably be the same or
at least closely related to those practices which now
fall under the jurisdiction of the FTC. It was thought,
therefore, that it would be appropriate to transfer the
regulation of such practices to the FTC. However, as
regards patent infringement cases, the considerable
expertise that the Tariff Commission has developed
with regard to them since the enactment of section 337
warrants retention of jurisdiction by the Commission.

31(C)

MR. STEWART

meal applications for relief to separate agencies under several statutes
with consequent inefficiency and delay in securing relief from such a
concerted program of unfair competition are to be avoided.

Accordingly, it would weaken U. S. law to adopt the Adminis

tration bill insofar as Section 350 would repeal to all intents and purposes the present law and substitute a very limited remedy confined in ita operation solely to patent infringement cases. For this reason the Trade Relations Council opposes Section 350 of the bill in its entirety.

GOVERNMENT

Under the Administration proposal, both the FTC and
the Tariff Commission would have separate but not over-
lapping jurisdiction over practices now covered by section
337. The amendments about which the Stewart paper complains
are in fact designed to insure that applications for relief
from unfair import practices are handled by agencies with
the greatest expertise and with the greatest possible
efficiency.