Evening star., 1961-03-05
By EILEEN SHANAHAN
Contributing Writer


back on the protectioniSt philoso-
ply of his native New England,
had refused to impose tariff on
imports of baler twine and hard
fiber industrial cordage, despite
arguments by United States pro-
ducers that the imports are caus-
ing serious hardship.
It was the first tariff decision
made by the Kennedy adminiStra-
ton, and under the law, it had to
be made by the President himself.
An ironic coincidence added to
the impact Of the announcement.
Mr.. Kennedy himself, as a Sena-
tor, had supported the appeal of
these same cordage producers-an
important one is located in Mas
sachusettS-for a protective tariff.
The fact that the President
could-and did-reject not just
some mine-run tariff appeal but
one from an industry whose prob
lens he knew intimately was taken
as a signal that Mr.. Kennedy had
set his course firmly on the side
of a free American trade policy.
But if the decision was an oc-
casion for celebration in nations
which feared revival of protec-
tionism in the United States under
Mr.. Kennedy. it was also a cause
for undisguised dismay in many
circles in this country.
Employers and workers alike in
a long list of American industries
ranging from steel to croquet NAL
lets (yeS-producers of the latter
item have an import competition
problem which is far from a
joke) had hoped that the Presi-
dent might rule otherwise.
Free Trode Reoffirmed
While it is possible that Mr..
Kennedy, in some future case
might find the arguments more
compelling and order imposition
Of tariffs to protect American
manufacturers, this country's
ong-standing policy Of free trade
appears to have been reaffirmed
by the cordage decision.
Thus the administration is 60
ing to have to look for other rem
edies for the problem Of main
tanning the American market for
American-made goods. The search
for new remedies is already well
under way.
Actually not all Of United
States industry is faced with any
serious competition from imported
products. Surprisingly, although
the dollar value Of imports reaches
new records almost every year
not in 1860, however-imports
nowadays are lower, as a percent
age of the Gross National Product
than they were in the years prior
to World War II. Merchandise i'm
ports in 1859, a big year for i'm
ports, amounted to 80 per cent
of GIMP. as compared with 3.5
per cent in 1887 or 4.3 in 1929.
When comparisons are made
with the period just following
World War II, the picture is diff
ferent of course. In those years,
with much Of the industrial plant
Of Europe and Japan still unre-
constructed, United States i'm
ports were much lower than they
are now.
Although reducing the import
competition issue to Gross Ma
tional Product terms may seem
to shrink the problem to manage
able proportions. there are hun
dreds of industrialiSts and hum
dredS Of thousands Of workers,
their jobs and profits actually or
potentially menaced-who would
not agree.
Many businessmen are inclined
to the view that the problem is
nearly insoluble so long as United
States wage rates are higher than
those paid anywhere else in the
world, and the prices charged Tor
American-made products must,
consequently, remain high, too.
The Motter Of Wages
American labor, which has come
to. view an annual increase in
wages as almost a constitutional
right is going to have to rid itself
Of that notion, in the opinion Of
most American businessmen, if
American products are not to be
increasingly priced out Of world
markets, including the market in
this country. They note that the
hourly wages paid American
workers are, in some cases, as
much as three or four times as
high as those prevailing in West
ern Europe and that the differ.
ential is even larger than that
between wage rates here and those
in Japan.
American labor mus t realize,
the business community asserts,
that this wage gap cannot safely
be widened even further.
Union leaders respond to this
charge with the argument that
the wage differential is not as
large as it seems because in Eu-
rope, especially, workers receive
many more fringe benefits"
which are not included in the
hourly wage rate figures.
In addition, they say, wage in
creases and price increases in this
country haven't necessarily been
related; an industry such as steel
whose wholesale prices have risen
more than 80 per cent in the post
Korean period has not granted
significantly greater wage in
creases than, say, the chemical
industry, whose wholesale prices
have risen only about S per cent
in the same period.
Management's answer is that
wage costs are bigger percentage
Of total production costs in some
industries than in others.
But there is another aspect Of
the important competition ques-
ton which is seldom examined