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George W.

Flynt

Gallagher

Andrews,

Glenn

Bolling

NAYS-23

Cleveland

Marsh Natcher Duncan, Tenn. Olsen, Mont. Gross Roudebush Secrest Stubblefield

McClory

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AMEND SECTION 510 OF MERCHANT MARINE ACT

Mr. GARMATZ. Mr. Speaker, I ask unanimous consent to take from the Speaker's table the bill (H.R. 728) to amend section 510 of the Merchant Ma

rine Act, 1936, with a Senate amendment thereto, disagree to the Senate amendment, and agree to the conference asked by the Senate.

The SPEAKER. Is there objection to the request of the gentleman from Maryland? The Chair hears none and appoints the following conferees: Messrs. GARMATZ, ASHLEY, DOWNING, MAILLIARD, and PELLY.

AUTOMOTIVE PRODUCTS TRADE
ACT OF 1965

Mr. MILLS. Mr. Speaker, I move that the House resolve itself into the Committee of the Whole House on the State of the Union for the consideration of the bill (H.R. 9042) to provide for the imWalker, N. Mex. plementation of the Agreement Concerning Automotive Products Between the Government of the United States of America and the Government of Canada, and for other purposes.

Edwards, Ala. Mailliard Edwards, Calif. Martin, Mass. Evins, Tenn.

Goodell

Hagen, Calif.

Bonner

Cameron

Hays

Celler

Hébert

Clawson, Del

Herlong

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Matthews

Morse Passman

Reifel

Roncalio

Ryan

Saylor

Thomas

Thompson, N.J.
Toll
Ullman

Williams

Willis

Young

So the resolution was agreed to. The Clerk announced the following pairs:

Mr. Hébert with Mr. Saylor.

Mr. Willis with Mr. Edwards of Alabama. Mr. George W. Andrews with Mr. Dickin

son.

Mr. Diggs with Mr. Lindsay.

Mr. Corman with Mr. Del Clawson.

The motion was agreed to.

IN THE COMMITTEE OF THE WHOLE

Accordingly, the House resolved itself into the Committee of the Whole House on the State of the Union for the consideration of the bill H.R. 9042, with Mr. DONOHUE in the chair.

The clerk read the title of the bill. By unanimous consent, the first reading of the bill was dispensed with. Mr. MILLS. Mr. Chairman, I yield myself 15 minutes.

Mr. Chairman, the bill presently before the Committee of the Whole is the culmination of a situation that I would like to refer to briefly before getting into the provisions of the bill itself.

Mr. Chairman, as all of us are aware there is an automobile industry in the

Mr. Evins of Tennessee with Mr. Glenn An- United States made up of the producers

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I do not know what would have happened. No one knows what would have happened. It is entirely possible that there existed at least the seeds for a trade war between this very friendly ally of the United States and the United States itself. This could have been disastrous to the trade between the two countries, Canada and the United States.

Mr. Chairman, we should bear in mind that Canada still remains the prime importer of American products.

The automobile industry itself was concerned about the possibilities of such a trade war because the industry here in the United States is largely the owner of the subsidiaries that are its counterpart in Canada. The Government itself here and apparently the Government in Canada was concerned about it. The union which represents most of the automobile industry, including the parts industry here in the United States, was greatly disturbed about what had happened and the automobile industry of the United States had reason to be concerned, of course, because it has become a practice that we do not like for countries of the world to impose restrictions and limitations upon the import of American-made automobiles of the kind and nature such as to prevent the friendly acquisition of these very fine machines and parts in all of the markets in the world.

For instance, Mr. Chairman, Australia requires that 90 percent of the automobile itself be made in Australia in order to be sold in Australia. South Africa does approximately the same thing. Brazil does approximately the same thing. Mexico does approximately the same thing, and wherever this situation exists, because of the shortrun production faced by the industry within that country, cars automatically sell to the consumer for a lot more than they do here and a lot more than they would if they were permitted to buy parts from the United States and assemble them in those countries.

There was some thought that Canada might be drifting into that kind of a situation which would be very detrimental to the manufacturers of automobile parts in the United States, the manufacturers of cars in the United States, and to those employees of these concerns in the United States.

Mr. Chairman, sensing this situation and desirous of maintaining the very cordial friendly relationship that has existed between Canada and the United States over the years, the President of the United States and the Prime Minister of Canada drew up and signed on January 16 last, what is known as the agreement concerning automotive products between the Government of the United States and the Government of Canada. Canada immediately put into effect that which she agreed to do in this agreement.

The President of the United States immediately started the process of carrying out that which he had agreed to do on behalf of the United States.

Pursuant to this agreement Canada reduced her duties to zero under certain circumstances. The President committed himself to ask the Congress to implement this agreement during this session of the Congress.

Now, Mr. Chairman, the bill before us has as its primary purpose the implementation of this agreement and the adjustment of American duties on automobiles and automotive parts going into new automobiles, in keeping with what Canada has done and what we undertake in the agreement to do through legislation. That is the primary purpose of the bill. There are some collateral provisions such as the section of the bill, I believe it is 202, which authorizes the President to enter into similar agreements with other countries of the world, if those countries are so disposed.

If he does this he has to report back to the Congress. We have a 60-day waiting period in which the Congress may act adversely with respect to such an agreement if it is so inclined.

In addition, that section also authorizes the President to enter into agreements to change the rate of duty with respect to automobile parts that are to go into used cars, that is, replacement parts but here again such an agreement can also be voted on and voted down by the Congress if the Congress wants to do it within the 60-day period. In the absence of the agreement, if we try to export an automobile into Canada and face the Canadian duty, it would be 17.5 percent. If Canada wants to export a like automobile into the United States the rate of duty is 6.5 percent. Both countries are agreeing under certain circumstances to reduce these rates of duties to zero.

In the United States we have a duty of 8.5 percent on most parts that come into the United States to be used in cars here in the United States. Canada has rates of duty on corresponding United States automobile parts into Canada that go as high as 25 percent, and averages about 17 percent.

Canada agreed to immediately reduce to zero the rate of duty on the automo

bile parts that are brought into Canada by the automobile producers of Canada for use in new cars or in connection with the production of new cars, effective January 18 of this year. We had to limit our part of the agreement along the same line because Canada was not ready at that point-she perhaps is not yet is not yet ready-to provide for the complete elimination of all duties on all parts which would mean the inclusion of replacement parts.

I have talked to a number of people who are in the parts production business here in the United States, and they have told me, without exception-those that I talked to-they have no fear whatsoever of complete free trade with Canada in all parts, that they can here in the United States States produce those parts cheaper and sell them cheaper than the corresponding parts produced in Canada can be sold in the American market. But there has been a great deal of suspicion, let me say, that the Canadian automobile producers may have entered into some type of side agreement with the Canadian Government which would mean that the producer or assembler of cars in Canada would have to buy a Canadian-made part in preference to an American-made part, regardless of what the difference in cost might be.

When we opened the hearings on this matter I am sure each and every member of the committee who heard the statements expressing this fear were interested in exploring them, and we did explore into what turned out to be letters of undertakings-not agreements-that we found had been written by the Canadian automobile producer in response to a request from the Canadian Government setting forth what they thought they could do and what they would undertake to do in the event such an agreement were consummated by the United States and Canada.

There is no demand whatsoever on the producer of Canadian automobiles to disregard price or to buy any given number of parts or any kind of parts produced within the Canadian borders. Actually, there is this expression of intent to increase the Canadian value added of automobiles produced in Canada, an intent and a desire and a hope that any successful business operator would have taken into consideration in view of the fact that there is a higher percentage of annual increased demand for automobiles in Canada today than there is here in the United States. I said "percent," because they do not have as much population.

Now what would happen under this agreement and under this legislation? I think, Mr. Chairman, we can expect, and confidently expect, that the automobile industry in the United States and the automobile industry in Canada both will grow. Why do I say it? Because we will be developing for the first time, as against what we have today; namely, two separate industries one of them having the experience of the short-line production in Canada, upping the costs and the other our own more efficient industry, a North American automotive industry. This will be an integrated

North American automotive industry so that a given model can be produced in Canada in greater number and thus extend the production run and reduce costs of particular models for the Canadian market.

I think the automotive industry and I think the labor union that represents these workers were exactly right in their conclusions when they testified before your committee that this bill was desired by them.

I think I should call attention to the fact that we have here a little different situation from what we have been having as some of these bills come before us. Here we have industry and labor together. That does not happen all the time. But in this instance we have the labor involved in the industry and we have the management involved in the industry, both telling us that this legislation should pass and that this legislation is in the long run for the best interest of both management and employees in the industry.

So I think it should not be unnoticed that that is the case in this situation.

Mr. Chairman, we reported this bill in June-I think it was on June 21. We revised the original bill that was submitted to us in some respects. Very frankly, I wanted to know more about the reaction to it and the operation under it. I wanted to know more about what might happen before we brought it to the floor of the House. I think we have had enough experience with the implementation of the agreement by Canada that I can assure the membership of the House that though there may be some dislocation here and there as between particular manufacturers of parts, I think I can assure the membership of this House that this bill does not offer any threat to the continued operation and the continued expansion of the smaller independent producers within this industry who are dependent for the sale of their products to the automotive manufacturers themselves as well as to the general public who use cars and car parts.

I am thoroughly convinced in my own mind that here is a golden opportunity for us to set in operation machinery that will inure to the benefit of the people of Canada-yes-but moreover it would inure to the benefit of the people of the United States as well.

Mr. Chairman, I do not know of anything that has received any more careful consideration than this particular bill because I must say I viewed it with a

great deal of concern when it first came to us. I had many, many questions about it and I think other members of the committee had many questions. Most of these questions, if not all of them, have been resolved as we have gone over this time and time again.

What is the situation if we do not pass this legislation? We revert right back to where we were, the Congress having failed to implement this agreement. At a minimum we could expect Canada to put back their duties on automobiles and parts-duties that are about three times as high as U.S. duties. We do not know whether the least additional thing

that Canada would do would be to restore the remission-of-duties plan. We do not know what Canada will do. But those who are concerned at the moment about some parts producer here in the United States should remember that it was the parts producer himself who found fault with the Canadian remissionof-duties plan to begin with and it is the U.S. parts producer who will once again have to try to sell his parts into Canada over the barrier of a high duty.

I know I can assure the membership that this arrangement is far better for the parts producer than was the original remission-of-duty scheme this agreement supplants.

In addition, there is nothing we can say by way of assurance that there could not be established at the Canadian border a limitation on the imports of parts from the United States, which would cut off or substantially cut off the export from the United States of parts this year which, so far, for the first 5 months is greater than it was in the first 5 months of 1964.

It is not a choice between this agreement and what we would want. That is not the situation. The choice is between this agreement and what another country may decide it wants.

Let me point out, Mr. Chairman, that the agreement which this legislation is concerned with does not establish complete free trade on automotive products between the United States and Canada. While this country might be prepared to take that step at this time, we cannot very well expect Canada to do so now. Our automotive industry is great and powerful; Canada's is relatively small and weak. As I stated, the Canadian industry is about one twenty-fifth the size of our industry. Complete free trade now would mean that our highly efficient industry would simply take over the entire North American automotive market. This is not what we want to do to our

good neighbor, and it certainly is not what the Canadians should be expected to be willing to have us do. The agreement contemplates the achievement of fully free trade in automotive products by stages. It provides for limited free

than January 1, 1968, of progress made toward achieving the objectives of the toward achieving the objectives of the agreement. At the end of this transiagreement. At the end of this transitional period judgments can be made as tional period judgments can be made as to what further steps toward achievement of full integration of the industries and full free trade in automotive products can be taken.

Now, Mr. Chairman, what is the United States obligated to do in furUnited States obligated to do in furtherance of this historic step that our Government and the Government of our major trading partner have agreed to take-to lay aside the narrow objective of maintaining walls of protection around of maintaining walls of protection around separate, autonomous, automotive inautomotive industries, and remove the barriers to the creation of a single, integrated North creation of a single, integrated North American industry? All the agreement All the agreement calls upon the United States to do is to calls upon the United States to do is to remove its already low duties on motor remove its already low duties on motor vehicles and on original equipment to be vehicles and on original equipment to be used in the manufacture of motor vehiused in the manufacture of motor vehicles. The possible benefits to the United cles. The possible benefits to the United States are great, and the risks repreStates are great, and the risks represented by the removal of these duties are small. If either country should become dissatisfied with the way the agreement is working, the agreement can be terminated under its terms, upon 12 months' written notice. The Congress will be kept informed regarding activities under the agreement by an annual reunder the agreement by an annual report from the President, as required by

section 502 of the bill.

I mentioned temporary undertakings made by Canadian producers to increase made by Canadian producers to increase their Canadian production. The Committee on Ways and Means heard much mittee on Ways and Means heard much before the hearing on the bill about the so-called side agreements that Canadian so-called side agreements that Canadian producers had made with the Canadian producers had made with the Canadian Government, and we inquired into them most thoroughly. They turned out to be private letters from the Canadian automotive companies to the Canadian Government, sent before the agreement Government, sent before the agreement was signed, in response to the Canadian Government's inquiry of Canadian pro

ducers as to their plans for expanding production of automotive products in Canada.

Copies of these letters were supplied to the committee by the witnesses for the four major companies. They are trade in automotive products for a tran- reproduced in the committee report at

sitional period under conditions that will permit the Canadian sector of the industry to achieve a reasonable increase in her automotive production, while the U.S. manufacturers plan their production so as to make the most efficient use of their plants whether in Canada or the United States. Since the Canadian market is growing more rapidly than the U.S. market, both sectors of the industry

should benefit.

The agreement contemplates this

transitional period as one of adjustment

of both sectors of the North American automotive industry for the stated ob

jective of early achievement of a broader

market for automotive products, within

which the full benefits of specialization and large-scale production can be more fully realized. Consultation may be had at any time at the request of either Government on any matter relating to the agreement, and the agreement provides for a comprehensive review, no later

page 43. Examination shows them to be "letters of undertaking," requested from each company individually by the Canadian Government-intended to assure nadian Government-intended to assure the Government that the signing company will comply with the terms of the agreement and will increase the dollar

value of the "Canadian value added" in its production of vehicles and original equipment parts by a stated amount. The undertakings of all the Canadian companies taken together are understood to total additional "Canadian value added” in the amount of approximately $241 million. This increase is to be above the anticipated normal increase in production in Canada and is to be achieved during model year 1968.

The undertakings of the companies are unilateral and are subject to qualifications about the effect of market conditions and other factors beyond the control of each company. They were

made so the Canadian Government could be confident that under the dutyfree regime made possible by the agreement, Canadian production would not be swamped in the first critical years by far greater U.S. production but would share in the rapid growth of the Canadian automobile market. These letters are not part of the agreement, but their terms must be weighed in considering the potential overall effect of the agreement.

Because the adjustments that may take place in the industry during the transitional period and the elimination of the duties all at one time—that is, without reduction by annual stages as provided in the Trade Expansion Act of 1962-the bill provides special adjustment assistance procedures during the transitional period for firms producing automotive products and their workers that are dislocated primarily because of the operation of the agreement. Now these procedures are admittedly more liberal than those provided for firms and workers under the Trade Expansion Act of 1962. But let me point out, Mr. Chairman, that these special procedures will apply only during the transitional period, that is, until July 1, 1968, during which period parts and component supply sources may be shifted either within each country or between countries to take advantage of the lower costs and potential improvements in efficiency made possible by the agreement and to carry out temporary undertakings made by Canadian producers to increase their

Canadian

production. Furthermore, unlike the Trade Expansion Act adjustment assistance provisions, which are properly limited to cases where injury or loss of employment is due to increased imports, adjustment assistance provisions of the bill take into account the fact that dislocation may result not only from an increase in imports from Canada, but from a loss of exports.

United States-Canadian agreement is

I submit, Mr. Chairman, that the

a unique one designed to achieve an ob

jective going far beyond the objectives of trade agreements that have been made under trade agreements legislation; namely, the integration of the The special adjustment assistance proviNorth American automobile industry. sions in the bill during the period of transition from the present state of this industry to the greatly improved state that it will hopefully be in 1968 are that may arise from the operation of accommodated to special circumstances the agreement.

These special procedures have been criticized as favoring workers in the automotive products industry over those

in other industries who must rely on the visions of the Trade Expansion Act. I more onerous adjustment assistance prohave shown, I believe, that these special temporary provisions in the bill are designed to meet situations not pertinent under the Trade Expansion Act.

Now in addition to provisions authorizing the President to implement the United States-Canadian automotive products agreement and those providing for adjustment assistance to firms and

CXI-1411

Mr.

workers adversely affected by the operation of that agreement, the bill authorizes the President to implement similar agreements covering automotive products with other countries as well as supplementary agreements with Canada and such other countries with which original equipment agreements may be made, covering replacement parts. The reason for these additional authorizations, Chairman, is to encourage the extension at an appropriate future date of the agreement with Canada to cover replacement parts as well as original equipment, and to demonstrate to countries other than Canada producing automotive products that the United States is willing to agree to extend the benefits of the United States-Canadian agreement to them where such agreements would afford mutual trade benefits. I would emphasize, Mr. Chairman, that the authority to carry out any agreement additional to the present United States-Canadian agreement may be exercised only if first, prior to the negotiation of such agreement the President obtains advice from the Tariff Commission on the probable economic effect of the agreement and provides opportunity for interested parties to present their views; and second, the agreement has lain before the Congress for 60 days and a concurrent resolution disapproving the agreement is not adopted during that 60-day period. Mr. Chairman, your committee did not overlook the concern of certain U.S. independent parts manufacturers over the possible effect of the agreement with Canada on their operations. We have concluded that their fears, which were based largely on the "secret" agreements that turned out to be the letters of un

dertaking I previously described, are excessive. Of course, the operation of the agreement may cause some dislocations among particular parts manufacturers. But the fact is that the U.S. independent automotive parts manufacturers stand to gain from the agreement. The Secretary of Commerce advised your committee that in his judgment the independent parts industry, far from being adversely affected by the agreement; "should"—and I quote "also benefit from this program, both immediately as a result of the termination of the Canadian duty remission scheme, and in

the long run as a result of the projected increase in total vehicle sales in the North American market."

Statements have been made that prices of Canadian automobiles have not as yet been reduced to U.S. levels. These statements deserve comment.

With the United States-Canadian agreement in full effect, both countries anticipate an expansion of the Canadian market for automobiles and trucks. This expansion will come about more rapidly as Canadian automobile prices are reduced; these prices are now about 15 percent higher than those in the United States. However, an immediate and drastic price reduction would cause very heavy losses and serious injury to Canadian companies and Canadian automobile workers.

I am confident that both governments and the companies intend that there

shall be as rapid a reduction in prices shall be as rapid a reduction in prices as the rise in efficiency will permit. as the rise in efficiency will permit. This intention has been plainly stated by the Canadian Prime Minister and the Minister of Industry in debates in the Canadian Parliament. Although the U.S. Government cannot and should not attempt to dictate automobile prices to the Canadian companies, we can be certain that there will be continuous pressure from a variety of interests for appropriate price reductions.

Canada

Mr. Chairman, as the President stated in his letter to the Speaker, the agreement is based on mutual trust and will ment is based on mutual trust and will result in mutual benefit-benefit to producers, to labor, and to consumers on both sides of the border. The Secretary of Commerce testified in favor of this legislation, as did the Secretary of this legislation, as did the Secretary of Labor and Under Secretary of State Mann. The "big four" of the U.S. automotive industry urged enactment of the legislation, and the spokesman of the UAW supported the legislation. has abandoned her unilateral approach has abandoned her unilateral approach to improvement of her position in the Canadian motor vehicles market that cast a cloud on our good relations and has agreed to a joint program that will allow both countries to share equitably in a growing North American market. She implemented her obligations under the agreement promptly after signature-eliminating all relevant duties on imports of U.S. automotive products on June 18. She awaits corresponding action on our part.

Mr. GROSS. Mr. Chairman, will the gentleman yield?

Mr. MILLS. I am glad to yield to the gentleman from Iowa.

Mr. GROSS. In the absence of this legislation, how can we revert back to where we were? we were?

Are we not now where

Mr. MILLS. No. We would revert back to the situation prior to the agreement, is what I had in mind.

Mr. GROSS. Is the gentleman saying that the President of the United States entered into a most important agreement with Canada without the sanction of the Congress?

Mr. MILLS. I am not saying that at all. The agreement speaks for itself. The elimination of U.S. duties cannot go into effect unless this legislation is

passed.

The Congress can pass this, and the President will have completed his undertaking, which was, "I will ask the Congress in this session to establish zero rates of duty under certain circumstances."

Mr. GROSS. The President would not clandestinely or otherwise enter into an agreement with Canada or the auto manufacturers, would he, without the sanction of the Congress?

Mr. MILLS. This is not the first time that an agreement has been entered into, I must say. Does the gentleman from Iowa find fault with the fact that the President did not first get authority? Is that the point?

Mr. GROSS. Yes; because he is making quite an issue right now of an alleged invasion of his authority by the Congress.

Mr. MILLS. If we had waited this long and no action had been taken, no

agreement had been signed or anything else, perhaps the remission of duty practice would have remained in effect on the part of Canada. We must remember that is what the producers or parts were so concerned about. In my opinion, we would not have seen the export of parts to Canada that we have seen this year if the remission of duty scheme had not been eliminated from the picture.

I cannot help believing that this is certainly in our interest. The President has done nothing wrong in entering into the agreement and asking the Congress to implement that agreement.

Mr. BYRNES of Wisconsin. Mr. Chairman, I yield 15 minutes to the gentleman from Missouri [Mr. CURTIS].

Mr. CURTIS. Mr. Chairman, again it is my pleasure to state that the chairman of our committee has carefully and accurately explained the situation.

Let me state, lest there be some confusion, since I voted against the rule, I voted against the rule because it was a closed rule and I saw no justification for that. I assure the House that in my judgment the Ways and Means Committee has done its homework in this instance. stance. As the chairman described, we went into this matter as thoroughly as I believe we could have, with public hearings and considerable executive sessions.

Let me also say that although I voted against the rule, I believe this matter is ready for floor debate.

I shall vote for this bill. On the other hand, probably most of what I am going to say will be pointing out the features of this bill that very much bother me.

Again the administration presented us marks of the gentleman from Iowa [Mr. with a fait accompli. I think the reGROSS] are well taken. This is a fait accompli without any Members of Consulted ahead of time about the serious gress that I know of having been conaspects of this legislation that are involved here. Yet the executive knew that in order to carry out this agreement they were going to have to come to the Congress for authority.

The reasons for voting for this bill I think are clearly set out in the committee report. It is a good report, I think, and I hope that people will read it. Also the minority views should be read. The report sets forth why this bill should be

enacted.

No. 1, because "it is important to United States-Canadian relations." In my judgment, that is it.

However, I must say this-and this is a partisan political remark that I am now making—as a member of the minority party, I think it is proper for us to call attention of the Congress and the people of this country to the number

of instances in which the executive branch of the Government has in effect made what I regard as an improper and essentially a bad deal and then come before the Congress and said, "Look, there is nothing for you to do but come along, because if you do not come along,"-using the chairman's words"if you do not come along, where are we going to be?" Now, this is the argument, I might say, that prevails with me. Where are we going to be? I think

I am ready to ask on the part of the minority a little appreciation on the part of the executive branch of the Government for the times that we have gone along for this very reason. Indeed, a partisan political issue could well be made of a number of these situations. To the extent that this can be done carefully and properly, it should be done. Because mind you-and I do not need to say it in this House, with the majority you have here--of course, the other side of the question will be presented adequately. There are many of you who can take the position that this is a good deal and it should be our policy. I disagree. I want to say this: This agreement is contrary to the foreign trade policies as espoused by this administration, by the Kennedy administration, and the Eisenhower administration. This is a violation of GATT. It is not just a technical violation, but it is a violation of the spirit of GATT. This is just one further step in a series of steps that has been taken in recent years under this administration, which is in discord with the administration's statements as to what its trade policies are. The International Cotton Textile Agreeis a cartel, an international ment is a cartel, sponsored by our Government

one

with licenses and quotas. This is the most regressive form of regulating trade. A tariff is the most liberal if you are going to regulate trade. Then the International Coffee Agreement. There was another of these faits accompli presented to the Congress. It was pointed

out that if we did not go along, where

would our friends in Brazil and so forth

be? There was legitimacy in the argument. Interestingly enough, the first time it was before the House I voted for

it, although I did then about what I am doing now. Having said that I was going to vote for it, I did most of my talking against what had been done and the reasons why I thought it was a very bad deal. But I voted for it and said so, because of the consequences if we did not pass it. This passed the House and went to conference and then I think it died in conference without going further. So in this session of Congress we had it up again. This time I voted against it. Why? Because the administration had told the Committee on Ways and Means the previous time they had to have this action of the Congress right away. And here we sat around for over a year without doing anything about getting congressional implementation. And I might say, as I view it now, operating without the authority of law. Apparently this administration just proceeds to act whether it has received authority or not. This is what is going on here.

The gentleman from Iowa was correct in saying that actually this automobile agreement has been carried out. Customs officers are set up computing the customs, on the assumption that this will become law. This bill itself is retroactive to January 18, 1965.

This is the same procedure followed by this administration in the case of the interest equalization tax. The Congress took many months to authorize it. The

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The separate views of the Republicans, on page 56 of this report, makes this statement:

Faced with the possibility of having to take retaliatory action, the administration set about to find a way to accomplish the purpose sought by the Canadian Government and without the risk of penalties.

I made a little note on the side-"Faced with the possibility of having to take retaliatory action"-and here is my note"by law." Because the present law provides the method whereby those who felt that they were aggrieved, our domestic industries, could pursue their remedies. industries, could pursue their remedies. This is what the administration was confronted with, either following out the tice as the laws were written to those laws of the United States for giving juslegal remedies even though they were who were complaining, or forget about being legally pursued and set out to

change through executive fiat and hope the legislative hand would later legalize

it.

I worry about this procedure. If the laws are not good, here is the place to and your Committee on Ways and Means are responsive to pleas of the administration where the laws need changing. But let us change the laws, Mr. Chairman. Let us not follow this process of setting the laws aside when people have a legitimate right to expect the administration to carry them out-having the laws set aside while the administration

figures out some other method to pursue. This measure, as the chairman said, did receive deep consideration. I, myself, was going to oppose this until I saw the actual agreements of the automobile manufacturers with Canada. I want to say to the credit of our automobile companies that when they testified, they laid out on the public record what their agreements were. This administration proposal was meaningless when it was presented first to the Committee on Ways presented first to the Committee on Ways and Means without knowing what the agreements were with Chrysler, Ford,

General Motors, and American Motors.

In the committee hearings you will find a record of these agreements, and the committee had an opportunity to interrogate concerning them.

The total of all this is, in my judg ment, a form, again, of a cartel sponsored by Government. But I want to say in by Government. But I want to say in behalf of it that it is as fair a cartel setup behalf of it that it is as fair a cartel setup as I have ever seen. From that standpoint I want to commend our people, because if they are going to do this kind

of thing-and I do not think we shouldbut if we are going to, this is as fair way to do it and permits as much progress to do it and permits as much progress through real competition as I think we can imagine, assuming the cartel technique is to be followed.

But here is what it is really doing. It is saying that Canada may insist on a certain percentage of the automotive parts that the automobile companies buy in order to manufacture their automobiles; that that percentage must be made ir. Canada. This is bound to affect our automobile parts people in the United States. And they have had no voice in the details of this. You see, there is the tragedy of this.

Hopefully the automobile companies, the big companies, will look after the big automobile parts dealers, but the parts people have had no real voice. I suppose in theory someone will look after the United Automobile Workers in the United States.

But, of course, the United Auto Workers' union is an international union. This poses an interesting situation because their union members in Canada stand to benefit. However, I was won

dering how Mr. Reuther resolved this question between the United Auto Workers in the United States versus those in Canada. And, one further thing: How about the union members and the nonunion employees of these independent parts companies? Where did they have a voice in this? There was no voice.

It is interesting to see that in spite of

the-incidentally, I could not find where the Secretary of Commerce had actually said that this was not going to adversely affect the independent automobile parts port. He testified, but I do not think he industry as stated in the committee remade these remarks. I can be in error and that is why I am directing attention to it, because I would like to have it pointed up, if he did say it. If he said it, I believe he is in error.

Mr. BRADEMAS. Mr. Chairman, will the gentleman yield?

Mr. CURTIS. I now yield to the gentleman from Indiana.

posed to this legislation, I want to comMr. BRADEMAS. Although I am opmend the gentleman from Missouri [Mr. CURTIS] for his very candid explanation of it, particularly at two points.

lieve I am correct in this stated that The gentleman from Missouri-I bethis legislation authorizes a cartel, and the gentleman said it is a fair cartel, but it is a cartel all the same.

Mr. CURTIS. I said it is as fair a cartel as one could be. I do not even go along with this, but if you are going to have one, I suppose this is as an unrestricted one as there could be.

will yield further, I appreciate that beMr. BRADEMAS. If the gentleman cause representatives of the Department of State have repeatedly objected to the characterization that some of us who are

against the bill have made of the agreement; namely, that it in effect authorizes a cartel, and the word of the gentleman in the well certainly supports our contention that it does.

Mr. CURTIS. Could I say on that they expressed their resentment to me, too. Some of my good friends from the auto companies resented my use of this term when they were in the office. I said, "Let us go to the dictionary." I do not like to use epithets, I like to use the dictionary definition of terms. According to the

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