CONGRESSIONAL RECORD -- SENATE

March 10, 1969

Page 5690

S. 1462 -- INTRODUCTION OF THE ORDERLY MARKETING ACT OF 1969

Mr. MUSKIE. Mr. President, I introduce, for appropriate reference, on behalf of myself and Senators BAYH, BIBLE, BYRD of West Virginia, COTTON, CRANSTON, DODD, ERVIN, INOUYE, MCGEE, MCINTYRE, MONTOYA, MOSS, PELL, RANDOLPH, SCOTT, STEVENS, TALMADGE, and YOUNG of Ohio, the Orderly Marketing Act of 1969. This bill is intended to establish a flexible basis for the adjustment by the U.S. economy to expanded trade.

Many industries in America, involving thousands of workers, are facing a serious dilemma resulting from the sometimes conflicting goals of a generally healthy domestic economy and the impact of increasing foreign trade on specific industries.

What we may gain from increased trade in one industry may be offset by the losses incurred in another industry, resulting in a high rate of unemployment.

Gains from international trade are important, and trade should be encouraged. But the realities of trade in today's world call for changes from 18th- and 19th-century thinking -- that is, thinking which extols the virtues of free and open trade and ignores the complex problems of varying standards of living, means of production, wage scales, and restrictive trade policies other than tariffs.

We cannot deal with these changes on a piecemeal basis, and hasty consideration will do us more harm than possible good. This is one reason why, more than ever, I believe that Congress must take a hard look at our trade policies in light of our domestic and foreign priorities.

This examination should not be on the basis of one commodity or one industry at a time, but rather with a perspective that will enable us to examine the needs of our entire economy and determine the way in which foreign trade practices affect its health.

In principle, and often in fact, the threat to the milk industry, the dairy producers, the iron and steel manufacturers, or the shoe industry stems from the same cause -- imports of commodities which are produced at wages that would be illegal in the United States.

If we decide to solve the problems of each industry one at a time -- as we have been doing -- after a crisis develops in each, we may secure some relief for that one industry. But we do no more, really, than graft solutions of the past on a problem that demands a much more thorough and systematic approach.

Instead of waiting for a crisis point to be reached in each industry, we should set up a system which will consider and deal with these problems as they begin to appear.

Instead of ignoring the common problem faced by so many domestic industries, we should deal with it on a common basis. And instead of overlooking the obvious need for an examination of our abilities and priorities in light of the new realities of trade, we should study the situation and make some decisions as soon as possible.

With these considerations in mind, I am introducing the Orderly Marketing Act of 1969. The Orderly Marketing Act is not a rigid protectionist measure. It would not impose a rigid quota system. Instead, it is designed to give those American industries which have been hard hit by a massive flood of foreign imports time to readjust to the changing conditions of world trade.

The orderly marketing concept allows us to bring balance to our trade policy. Very simply, this bill would require the Secretary of Commerce, under certain specific conditions, to determine whether increased quantities of imports are a factor contributing to economic impairment of a given industry. If the Secretary finds that such impairment does exist, then the President would be able to impose import limitations geared to total sales in the domestic market, subject to review after 3 years.

This concept would allow us to overcome unfair competition through international agreements or through unilateral -- but flexible -- quotas. And it would allow foreign competitors to share in the growth of our market and our economy.

The grand scheme of free trade has obscured the nuts and bolts of our own problems, and many of our domestic industries have been the victims. The existence of many domestic manufacturers, particularly the smaller ones, and their workers is threatened.

Since the Orderly Marketing Act prescribes the basis for a common remedy for a problem common to many domestic industries, it is, in my opinion, a reasonable and equitable approach to a difficult and thorny problem.

Mr. President, I ask that the bill and a summary of its provisions be inserted in the RECORD at this point.

The VICE PRESIDENT. The bill will be received and appropriately referred; and, without objection, the bill and summary will be printed in the RECORD.

The bill (S. 1462) to provide for the orderly marketing of articles imported into the United States, to establish a flexible basis for the adjustment by the U.S. economy to expanded trade, and to afford foreign supplying nations a fair share of the growth or change in the U.S. market, introduced by Mr. MUSKIE (for himself and other Senators), was received, read twice by its title, referred to the Committee on Finance, and ordered to be printed in the RECORD, as follows:

S. 1462

Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, That this Act may be cited as the "Orderly Marketing Act of 1969."

SEC. 2. PURPOSES.-The purposes of this Act are to provide for the orderly marketing of articles imported into the United States, to establish a flexible basis for the adjustment by the United States economy to expanded trade, and to afford foreign supplying nations a fair share of the growth or change in the United States market.

SEC. 3. DEFINITIONS.

As used in this Act-(a) "Domestic industry" shall include all establishments located in the United States in which any article or articles like or directly competitive with the imported article or articles specified in a petition or request under subsection (a) or Subsection (b) of section 4 are produced. If an enterprise has several establishments in some of which such articles are not produced, the industry would include only establishments in which the article is produced for purposes of analyzing impairment for purposes of subsection (c) of section 4;

(b) "Like or directly competitive articles" shall mean those articles or closely related groups of articles on which the article or articles specified in a petition or request under subsection (a) or subsection (b) of section 4 have a combined competitive impact;

(c) An imported article is "directly competitive with" a domestic article at an earlier or later stage of processing, and a domestic article is "directly competitive with" an imported article at an earlier or later stage of processing, if the importation of the imported article has an economic effect on producers of the domestic article comparable to the effect of importation of articles in the same stage of processing as the domestic article. For purposes of this paragraph, the unprocessed article is at an earlier stage of processing;

(d) "Secretary" refers to the Secretary of Commerce.

SEC. 4. (a) A petition for orderly marketing may be filed with the Secretary by a trade association, firm, certified or recognized union, or other representative of an industry.

(b) Upon the request of the President, upon resolution of either the Committee on Finance of the Senate or the Committee on Ways and Means of the House of Representatives, or upon the filing of a petition under subsection (a), the Secretary shall promptly make an investigation to determine whether articles or groups of articles specified in the petition or request are being imported into the United States in such increased quantities as to be a factor contributing to a condition of economic impairment of the domestic industry producing such article and like or directly competitive articles.

(c) In making a determination whether there is a condition of economic impairment in the industry, the Secretary shall take into account all economic factors which he considers relevant, including idling of productive facilities, inability to operate at a reasonable profit or declining profitability, and unemployment, underemployment, or a decline in employment relative to production. (d) In any event, the Secretary shall make an affirmative determination under subsection (c) and shall find that the articles or groups of articles are being imported in such increased quantities as to be a factor contributing to a condition of economic impairment to the industry, if during the five calendar years immediately preceding the year in which the petition or request is filed the ratio of imports of the article or group of articles to the domestic production of such articles or like or directly competitive articles has increased by 50 per centum or more in the aggregate and during the calendar year immediately preceding the year in which the petition or request is filed the ratio of such imports to such domestic production was at least 15 per centum.

(e) If the Secretary finds that such articles or groups of articles are being imported into the United States in such increased quantities as to be a factor contributing to economic impairment of a domestic industry he shall forthwith inform the President of his finding and his determination under subsection (c).

(f) If the Secretary would have made the finding specified in subsection (e) but for the fact that the ratio of such imports to such domestic production was more than 10 per centum but less than 15 per centum in the year in which the petition or request is filed he shall also forthwith inform the President of his finding.

SEC. 5. Upon being informed by the Secretary of a finding pursuant to section 4 (e) , the President shall by proclamation limit the importation of such articles or groups of articles to which such finding applies for each calendar year succeeding such proclamation to the larger of

(i) That quantity which equals 15 per centum of domestic production of such articles and like or directly competitive articles for each preceding calendar year, or

(ii) That quantity which equals average annual imports of such articles or groups of articles for the five calendar years immediately preceding the calendar year in which such proclamation is made: Provided, however, That, with respect to a limitation imposed under paragraph (ii), such quantity shall be increased or decreased for each succeeding calendar year by the same percentage that such domestic production in the preceding calendar year increased or decreased in comparison with such average annual domestic production in the second and third immediately preceding calendar year: And provided further, That, with respect to a limitation imposed under either paragraph (f) or (ii), in the event of such an increase in domestic production there shall be permitted to enter an increase in quantity equal to 1 per centum of such domestic production for such immediately preceding calendar year.

SEC. 6. (a) After being informed by the Secretary of his findings under section 4 (c), the President may, in lieu of exercising the authority contained in section 5, negotiate international agreements with foreign countries limiting the export from such countries and the import into the United States of the articles or groups of articles involved whenever he determines that such action would be more appropriate to prevent or remedy economic impairment than action under section 5.

(b) In order to carry out an agreement concluded under subsection (a), the President is authorized to issue regulations governing the entry or withdrawal from warehouse of the articles or groups of articles covered by such agreement. In addition, in order to carry out a multilateral agreement concluded under subsection (a) among countries accounting for a significant part of world trade in the article covered by such agreement, the President is also authorized to issue regulations governing the entry or withdrawal from warehouse of the like article which is the product of countries not parties to such agreement.

SEC. 7. The Secretary shall allocate the total quantity proclaimed under section 5, and any increase in such quantity pursuant thereto, among supplying countries on the basis of the shares such countries supplied to the United States market during a representative period of the articles or groups of articles to which such proclamation applies, except that due account may be given to special factors which have affected or may affect the trade in such articles. The Secretary shall certify such allocations to the Secretary of the Treasury.

SEC. 8. In addition to proclaiming import limitations as to the articles or group of articles like or directly competitive with those of domestic industry under this Act, the President may provide with respect to the firms of such industry that they may request the Secretary for certifications of eligibility to apply for adjustment assistance and may provide with respect to the workers of such industry that they may request the Secretary of Labor for certifications of eligibility to apply for adjustment assistance under title III of the Trade Expansion Act of 1962, Public Law Numbered 794, Eighty-seventh Congress. Further proceedings and relief and the criteria pertaining thereto shall be the same as under title III of the Trade Expansion Act.

SEC. 9. If the Secretary informs the President of findings under section 4(f) the President may, in his discretion, take any action or any combination of actions specified in section 5, section 6, and section 8 with respect to the articles or groups of articles to which such findings apply.

SEC. 10. (a) Any proclamation made and any adjustment assistance granted pursuant to this Act shall be reviewable by the President after the third calendar year of their effect and prior to the commencement of each calendar year thereafter during which such proclamation or adjustment assistance remains in effect. In his discretion the President may upon such review terminate such proclamation or adjustment assistance if he finds it no longer necessary, appropriate or effective to accomplish the purposes of this Act. No proclamation or adjustment assistance shall remain in effect for a period longer than ten calendar years.

SEC. 11. Nothing contained in this Act shall affect in any way any quantitative import limitation heretofore or hereafter proclaimed or imposed pursuant to any Act of Congress authorizing such proclamation or imposition including but not limited to

(a) section 22 of the Agricultural Adjustment Act,

(b) section 204 of the Agricultural Act of 1956,

(c) section 232, 351, or 352 of the Trade Expansion Act of 1962,

(d) Section 2(b) of the Act entitled "An Act to extend the authority of the President to enter into trade agreements under section 350 of the Tariff Act of 1930, as amended", approved July 1, 1954 (19 U.S.C., sec. 1352a),

(e) section 7 of the Trade Agreements Extension Act of 1951,

(f) Public Law Numbered 481 of theEighty-eighth Congress (78 Stat. 593),

(g) The Sugar Act of 1948, as amended.

The analysis, presented by Mr. MUSKIE, is as follows:

ANALYSIS OF THE ORDERLY MARKETING ACT

The so-called Orderly Marketing Act is designed to provide American industry with relief from excessive import conditions in any kind of commerce.

The bill provides for the imposition of flexible import quotas whenever imports are found to be contributing to the economic impairment of a domestic industry. Among the factors examined to determine the existence of such a condition would be idleness of productive facilities, profit trends, and levels of employment.

Imported articles would be conclusively deemed to be contributing to a condition of economic impairment whenever:

(1) The ratio of imports of domestic production has increased by 50 per cent or more during the five previous calendar years, and

(2) Imports for the immediately preceding calendar year equaled or exceeded 15 per cent of domestic production for that year.

Annual import quotas would be established upon an affirmative finding of economic impairment.

These quotas would be set at the larger of either (1) 15 per cent of domestic production for the immediately preceding calendar year, or (2) the average of the annual imports for each of the five immediately preceding calendar years. Annual adjustments would be made to reflect increases in domestic production. As an alternative to the setting of quotas, the President would be authorized to negotiate import agreements with the relevant foreign countries.

A section by section analysis of the bill follows:

Section 1 entitles the bill the "Orderly Marketing Act of 1969".

Section 2 states that the purpose of the bill is to provide for an orderly, but flexible, procedure for the marketing of imported articles. Due concern is expressed for foreign interests.

Section 3 defines phrases used elsewhere in the bill. "Domestic Industry" includes all establishments located in the United States which produce articles which are "like or directly competitive with" imported articles specified in petitions for relief. Where only a portion of an enterprise's establishments produce the article(s) in question, only the establishments which comprise that portion will be termed "industry" for impairment analysis. Whether articles are "like or direotly competitive" will presumably be determined by analysis of such general economic concepts as interchangeability and cross-elasticity of demand.

Section 4 outlines the procedure for filing petitions for relief under the Orderly Marketing Act. It provides the President, Congress and private parties with the authority to initiate investigations by the Secretary of Commerce. The investigation is to determine whether the imports are a factor contributing to a condition of "economic impairment" in the relevant domestic industry. Among the standards examined to determine the existence of a condition of economic impairment would be the idleness of productive facilities, profit trends, and levels of employment. The imported articles will be conclusively deemed to be a factor contributing to a condition of economic impairment whenever:

(1) The ratio of imports to domestic production has increased by 50 per cent or more in the aggregate during the five calendar years immediately preceding the filing of the petition; and

(2) Imports for the immediately preceding calendar year equaled or exceeded 15 per cent of domestic production for that year. The Secretary of Commerce must inform the President of his findings if he makes either an affirmative finding of economic impairment or if he would have done so but for the fact that the ratio of imports to domestic production was more than 10 per cent but less than 15 per cent in the year before the petition was filed.

Section 5 provides for the mandatory imposition of orderly marketing limitations in the event of an affirmative finding by the Secretary. It authorizes a Presidential proclamation which would establish annual quotas based upon the larger of either (1) 15 per cent of domestic production for each preceding calendar year, or (2) the average of the annual imports for each of the five immediately preceding calendar years. A quota level adopted under the second alternative would be annually adjusted to reflect changes in the level of domestic production in the preceding year as compared with the average of the second and third preceding years. Also, where domestic production in the preceding calendar year has increased, a quota level adopted under either of the alternatives would be adjusted upward to the extent of 1 per cent of such domestic production.

Section 6 authorizes the President to negotiate international import agreements as an alternative to imposing quotas.

Section 7 creates a mechanism for allocation of U.S. import quotas among the supplying countries. The allocation would be based upon historic practice, subject to consideration of pertinent special factors which have affected or may affect the trade in such articles.

Section 8 authorizes the President to provide additional relief to injured firms and workers through adjustment assistance under the Trade Expansion Act of 1962.

Section 9 authorizes the President in his discretion to take any of the substantive actions specified in the bill upon notification by the Secretary that an industry is otherwise qualified for relief but for the fact that imports are more than 10 percent but less than 15 per cent of the domestic production.

Section 10 provides for a re-evaluation by the President three years after relief had first been granted. The President has discretionary authority to terminate relief at this time; in no case may a proclamation or adjustment assistance remain in effect for a period of longer than ten years.

Section 11 insures that the bill will not disturb quotas established pursuant to other federal laws.