Evening star., 1961-12-03
BY LEE NJ. COIN
Star staff Writer

President Kennedy has de-
.ided that the United States
IAN keep pace with the world
economy only by giving a bold
new twist to one of the Oldest
md hottest issues in American
oolitics-trade and tariffs.
He will send tariff liberaliza-
lion proposals to Congress next
year which will set off long
and angry debate involving:
Jobs and wages. profits and
plant Shut-doWnS.
Prices and initiation, competi-
ion and product quality.
Taxes and investment, in
terest rates and conom C
growth.
Gold and the balance of pay
mentS, trading blocS and in
ternational banking.
Foreign aid and overseas troop
commitments, commodity mar
kets and farm price supports.
Cold war diplomacy and Rus
sia'S economic challenge, allied
unity and the vision of world
federalism.
The scope of these matters
and the vigor of the Presidents
concern on the trade issue re-
sponse have aroused the admin
istration to a high pitch of eX-
citement and zeal. A White
House aide reports plenty of
go-go-go spirit" on the Ken
nedy team.
Opponents of the Presidents
tariff-cutting program are also
excited and jealous. They ap-
pear at this early stage to have
a good chance Of defeating him
in Congress.
The reciprocal trade system.
set up in 1884 and extended
many times, will die next June
80 unless extended again.
Under the system. Congress
has delegated to the President
its authority to set tariffs on
imports. Subject to certain re-
strictionS. the President can re-
duce this country'S tariffs in
exchange for similar conces-
sions by other nations. The
bargaining on tariff cuts is con-
Quoted with other signerS of
the General Agreement on Tar
ifs and Trade.
Before entering negotiations.
the President must give the
Tariff Commission a list of
items on which he plans to
offer concessions. The commits
sion sets a peril point" for
each item. specifying how low
the tariff could be cut without
lnJuring an American industry.
The President can reduce tar
IFS below peril point levels only
if he explains his action to
Congress.
Even after tariff reductions
are put into effect. the laws
escape clause provides an out.
American interests claiming
real or potential injury from
imports may petition the Tar
If Commission. which then
may recommend a tariff in
crease through withdrawal of
a concession in whole or part
The President may accept or
reject these recommendations
Under the 1858 extension of
the law. the President was
authorized to cut tariffs 20 per
cent over a four-year period
But the peril point procedure
has in practice held permissible
reductions to much less than 20
per cent.
Other devices also are used
to restrict imports. including
quotas imposed on oil and farm
products. Quotas generally are
justified on grounds of national
security or to prevent destruc-
ton of the farm price support
system.
In addition, so-called volun-
tary quotas control imports of
such products as textiles and
wearing apparel. These quotas
are designed TO prevent disrup-
ton of markets here through
sudden floods OF imports con-
,centrated in few product lines,
Japan has accepted such quotas
on textiles and apparel, largely
in the hope of discouraging
strlcter statutory restrictions.
Wants Basic Changes
President Kennedy wants
basic changes in the tariff sys-
TEN. And the best information
is that he has decided to make
the push for them in 1862.
Barring a laSt-minute change
of mind, he intends to seek a
big increase in his authority to
reduce tariffs and other import
barriers. With details still under
discussion, Officials report he
probably will ask Congress to:
Enact brand-new law. with
9 a five-year duration, instead of
just extending the old recip-
rocal trade law.
Authorize tariff negotiations
across the board" for broad
categories of import products
such as all chemicals or all
machine toCls--instead of re-
qulring individual bargaining
. on each item.
Permit reduction of existing
tariffs by up to so per cent
in most cases, with authority to
remove tariffs in some situa-
tions.
Eliminate the peril point
procedure and make it more
difficult for American indus
tries to qualify for escape
clause relief.
Allow him to bypass the
Tariff Commission to give fast
relief under the escape clause