September 15, 1964
PAGE 22108
DUMPING CZECHOSLOVAKIAN SHOES IN THE U.S. MARKET
Mr. MUSKIE. Mr. President, on a number of occasions recently, I have brought to the attention of the Senate the rapidly worsening conditions in our Nation's shoe industry brought about by the increasing levels of imports. I present today some new and rather startling information about the latest threat to the industry which has me greatly concerned.
The simple fact of the matter is that the industry is once again taking a beating from foreign footwear suppliers and their governments who show little concern for the disruption and damage they cause the American shoe industry.
The most recent aggravation is the dumping of Czechoslovakian shoes in the American market, a matter which concerns me not only for its immediate impact but also for its long-run significance. I fear, unless we take proper remedial steps, that what Czechoslovakia can do with impunity today can be done tomorrow, equally without fear, by other countries, and what happens today in shoes can happen tomorrow in other vitally important industries.
The present situation is not a matter only of local interest. The shoe manufacturing industry consists of mostly small to medium-sized companies operating some 1,300 factories situated in 38 different States. Taken as a whole, the business of shoemaking provides nearly a third of a million jobs for American men and women, and contributes over a billion dollars to the country's total annual payroll. These facts, and the additional consideration that the shoe industry has sales of some $41/2 billion annually, clearly make what happens to the industry a matter of vital national concern.
This industry and its workers now face a potentially catastrophic future, and the direct cause is the importation of shoes.
Let me cite some figures. In the past 9 years, footwear imports have increased well over 1,000 percent, and in 1963 accounted for 13 percent of domestic production. In this same period, 1955 to 1963, unemployment has been edging higher, and the loss of job opportunities now exceeds 35,000 annually.
Projection of these trends indicates an even more serious condition. It is estimated that by 1965 a total of 125 million foreign shoes will enter the United States, equal to 20 percent of anticipated U.S. production. It appears on the basis of current data that approximately 50,000 job opportunities will be lost annually to foreign imports.
As I have frequently explained, and has been explained in detail by the industry in numerous briefs and statements filed with various Government agencies, there is one and only one cause for the increasing penetration: wage rates and employment costs in foreign countries are substantially lower than such rates and costs in the United States. Each of these figures means something in human terms, and the unemployment statistics in particular are simply a cold, if precise way, of stating that there are an increasing number of human beings who are suffering.
What most people do not realize is that in many towns throughout the country the shoe industry is the principal and often the only source of income and employment. Because of imports, many such plants find it necessary to curtail or cease operations. While it may be possible for the company to move its operations elsewhere, the abandoned employees have nowhere to turn. My own State of Maine, in which the shoe industry is the largest single employer, has already suffered serious economic dislocation and will continue to do so unless we take the necessary remedial action.
But, as I mentioned before, the problem is not local in its occurrence. The national scope of the critical situation in the shoe industry, and the widespread concern for it, were underscored in 1963 when 235 Members of the House and 33 Members of this body petitioned President Kennedy to prevent further permanent injury to this vital sector of our economy. In October of last year, a representative delegation of both Houses, accompanied by labor and management, met with the late President and found him concerned with the problem. This spring, a similar group met with President Johnson, and we were pleased to find him concerned with the problem.
Let it be made clear that the shoe industry is not running to the Government to solve a problem which the industry itself could rectify. It has done everything in its power to impress upon foreign suppliers the mutually beneficial gains to be achieved by multinational negotiations aimed at giving all countries a fair share in the world market without seriously disadvantaging any one country. Unfortunately, foreign suppliers evidence no desire to negotiate; in fact, they are hostile to the suggestion.
I had the privilege of traveling in May to Milan, Italy, with representatives of the American shoe industry, management and labor, for the purpose of discussing with representatives of the Italian shoe industry the problem relating to shoe imports into this country. The fact that 33 Senators and 235 Members of the House were concerned about the shoe import problem persuaded the representatives of the Italian shoe industry to discuss it in a meaningful way. I have no conviction whatsoever that these talks will lead to a voluntary solution to the problem.
If talks fail, if there is no inclination on the part of foreign industry to have its representatives discuss a mutually satisfactory resolution with our Government, we shall be faced with the alternative of possible unilateral action to preserve the domestic industry.
Let it not be said that the American shoe industry has not sought every lawful private means at its disposal to seek a voluntary solution to the chaotic situation. The fact is, there is as yet no mutuality of concern, and no feeling of mutual obligation. At this point, foreign suppliers feel that they may with impunity continue to damage the U.S. shoe industry.
The example I cite today underscores the same point, although involving a different country and a different means of inflicting injury.
The dumping tactic currently being used is the old weapon of unfair inequitable pricing, whereby a foreign supplier sells in the U.S. market at prices for less than those prevailing in his own market, or in that of a third nation. The purpose of the tactic is to seize a foothold in the American market for the sake of future leverage, and the obvious result is injury to American industry.
The most recent exercise of this predatory tactic has resulted in the influx of Czechoslovakian shoes. I bring this to the attention of the Senate because it is another burden which an industry, already heavily burdened, is forced to carry.
This dumping tactic is a relatively easy matter for a state-controlled economy such as Czechoslovakia's. The Czechs have no worries about decent wages paid to workers, and there are no stockholders to whom an accounting must be made. They can afford to sell at a loss in the hope of gaining a future economic advantage. The temporary impact is absorbed for long-run political purposes by the state planning agency, buried in the ledgers which have no genuine record of, or concern for, profit and loss.
So far as the American shoe industry and its employees are concerned, the particular source of dumping is relatively unimportant. At the present time, to be sure, the volume of shoe imports from Czechoslovakia does not approach that of Japan and Italy, but the general pattern of a callous attitude on the part of foreign suppliers of all types has dangerous implications. If we are not prepared to take remedial steps, we may witness the destruction of large segments of the American shoe industry. I am dedicated to seeing to it that no such thing will happen.
The Members of this body cannot afford to be indifferent toward predatory dumping practices. If we fail to act now, it will in effect be an open invitation to other countries to pursue any trade policy they wish, without regard to the impact on this country's economic way of life. I would remind Senators that what happens to shoes today can happen to other products tomorrow. The time to search for remedy occurs when the first symptoms of disease make themselves known, not when the patient is too far gone to be cured.
The task facing us is a much-needed and long-talked-about revision of the presently inadequate antidumping law. As it now stands, the law may not offer the kind of protection which serious problems such as the one I have discussed today necessitate. Relief under present law is too little and too late.
I suggest to my fellow Senators that two particular questions should meet with especial attention. The first involves creating adequate means for proving dumping when it is perpetrated by a Communist country. The second is to discover a way by which the antidumping law can forestall damage to industry in its initial stages. While the Senate considers these suggested revisions, an interim step is necessary. I am asking the Treasury Department to begin an investigation of the practices described today and to take the appropriate remedial action. But I repeat that this is only an interim step. In the long run only an amendment of the antidumping law will be adequate to the task.
To be sure, a voluntary settlement of these problems would be the most desirable solution. I have yet to see any genuine sign of willingness on the part of foreign manufacturers to discuss the matter reasonably and to negotiate a solution equitable to both parties. In the face of this intransigence, we have no choice but to take the necessary steps through governmental action to put the world on notice that this country will not stand idly by while a major industry suffers serious harm.
Mr. President, the Senator from Missouri [Mr. SYMINGTON], who shares my views on this problem, is unfortunately
unable to be in the Chamber today to participate in the colloquy.
I ask unanimous consent that a statement prepared by him on this subject be included in the RECORD at this point.