Evening star., 1952-08-29
Truman Reveals Pact
Lowering Tariff on
Oil From Venezuela

Oil From Venezuela
President Truman today in
formed Congress of a new trade
agreement with Venezuela which
will lower duties on oil imported
into this country.
Principal effect of the new
agreement is to remove complex
quota restriction which doubled
the tariff on about one-fourth Of
Venezuelan oil shipped here.
In exchange. Venezuela grant,
er new tariff concessions on a wide
range of United States products,
including apples, pears, unas-
sembled automobiles and trucks,
radio and television receivers.
monographs. refrigerators and
numerous types Of machinery.
The new agreement. which sup
plements and amends q 1899 trade
agreement with Venezuela, was
signed yesterday at Caracas.
Soviet Block Excepted.
The American tariff concessions
viii apply to all other nations
exports to this country except
Russia and the Soviet-block ma
tions which are denied most
favored-nation treatment.
In q special message to Con-
gress, delivered to the secretary
of the Senate and the clerk of
the House, Mr.. Truman declared
the agreement will stimulate the
development Of proven oil reserves
In the Western Hemisphere"
The President reported the
agreement to Congress in COM
pliance with a provision Of the
Trade Agreements Act. which re-
quireS him to explain any tariff
concessions which go beyond So
called peril point" findings by
the Tariff Commission.
Actually, a split decision of the
Tariff Commission left some legal
question as to whether it made
Q peril point finding in this case.
Based on Quota Status.
The present tariff on Venezue-
Ian oil shipped here is 1912 cents
a barrel on a quantity falling
within special quota. and 81
cents a barrel for that over the
quota.
The new agreement removes the
quota and provides for a tariff
rate Of 1012 cents per barrel on
higher grade oils with a specific
gravity of Is degrees API (Ameri-
can Petroleum Institute) rating,
or more. The rate is cut to 5A
cents per barrel on imports Of
heavier oil testing less than Is
degrees APP.
The State Department estimat-
ed that, on the basis Of 1850 trade |,
figures. about SITS million worth
Of Venezuelan exports to this
country would benefit from the
new concessions. Only about SIT
million worth Of this, officials
said. would come under the 514Ii
cent rate. SE # 4,
The quota arrangement removed
by the new agreement limits the
reduced 101z cents per barrel
tariff rate on imports from all
sources to a yearly quantity equal
to S per cent of the amount of
crude petroleum prpcessed in con-
tinental United States refineries
during the preceding calendar
year. Il Ill /
Divided Among Several. Il
The quota is divided among
Venezuela, Columbia, Kuwait,
Saudi-Arabia and other oil pro-
ducing countries.
In explaining the tariff con-
ceSsions to Congress-especially,
the 514 cent per barrel rate on
heavier oil-the President pointed
out that: .
!. Most of this country's domes-
tic production of crude petroleum
is Of higher specific gravity than
Is degrees API.
2. Most Of our imports are Of
higher than IS degrees gravity.
3. The 5A-cent rate will apply
primarily to imports Of residual
fuel oil usable mainly by power
plants and East Coast industries
which now find coal is cheaper
anyway.
In addition to the concessions
on oil, the new agreement covers
existing duty-free imports into
this country of iron ore. The
Venezuelan iron ore deposits are
now being developed intensively.
officials estimate that investments
of two American companies. Unit
ed States Steel Corp. and Bethle-
hem Steel Co., in Venezuelan iron
ore development will amount to
$500 million in the next few years.