Special Message to the Congress Recommending United States Membership in the Organization for Trade Cooperation.

To the Congress of the United States:

The Secretary of Commerce is submitting for consideration by the Congress legislation to authorize United States membership in the Organization for Trade Cooperation.

I urge its favorable consideration.

The advantages to the United States of membership in the Organization for Trade Cooperation are compelling. It would open the way to major benefits for American trade by providing day to day review and consultation on administration of our trade agreements. It would provide machinery for closer supervision and protection of the assurances contained in those agreements against discriminatory treatment of American exports, and thus increase the benefits we receive from those agreements. It would enable us more effectively to encourage the opening of new opportunities for our exports to compete in the world market on their commercial merit.

Foreign trade is a major economic activity in the United States. In 1956 our merchandise exports, excluding goods shipped under military assistance programs, amounted to over 17 billion dollars. They constituted a greater proportion of our gross national product than the value of all non-farm residential construction last year. In the field of agriculture alone exports provide the market for the product of about 40 million acres of land.

Because exports take only part of the production of most of our industries and farms, and because they move through so many stages of processing and handling on their way to foreign markets, we frequently overlook their importance. But they are vital to the welfare of our agriculture, labor and industry.

America's foreign trade has grown rapidly under our Reciprocal Trade Agreements Program. This program has been in effect for more than 20 years, but since 1946 its principal vehicle has been a multilateral agreement known as the General Agreement on Tariffs and Trade, signed by all the major trading nations of the world.

That agreement gives to the United States important tariff and other concessions, but some of the benefits of these concessions to our export trade have been offset by such measures as quotas, licenses, and exchange restrictions. These measures have under various circumstances had the effect of discriminating against United States exports, and limiting the benefits of tariff concessions which we received under the General Agreement.

The General Agreement provides for the orderly elimination of this discrimination against our trade, but, because of inadequate machinery for administration, these provisions have not been fully effective.

The Organization for Trade Cooperation, by making possible more business-like administration of those provisions of the General Agreement, will help to make our trade agreements more fully effective and assist us in expanding our markets abroad for United States products. At the present time, administration of the General Agreement is limited by the fact that the signatories meet only intermittently.

In my Message of April 14, 1955, I reviewed the evolution of the General Agreement and the developments which led to the proposal for an Organization for Trade Cooperation. That Message was followed by exhaustive hearings before the Committee on Ways and Means of the House of Representatives and in April 1956 that Committee approved a Bill to authorize United States membership in the proposed Organization.

In reporting last year's bill the Committee on Ways and Means inserted a number of constructive amendments to assure that participation by the United States in the Organization for Trade Cooperation would relate solely to matters pertaining to international trade and that safeguards for domestic producers contained in our present trade legislation would be maintained unimpaired. These amendments have been strengthened and included in this year's bill.

The proposal being submitted by the Secretary of Commerce contains two new features not found in the bill approved by the Committee on Ways and Means last year. These are designed to provide further safeguards to insure that United States participation in the proposed Organization will be responsive to the problems and needs of American agriculture, labor and industry. The first is a provision to create an advisory committee consisting of representatives of American labor, industry, agriculture and the public to advise and consult with the United States chief representative on matters coming before the Organization. The second is a provision under which the United States chief representative would make an annual report to the President for transmittal to the Congress concerning the effect of the activities of the Organization for Trade Cooperation on American labor, industry and agriculture.

In addition, the proposal contains provisions further clarifying the substantive safeguards already endorsed by the Committee on Ways and Means by explicitly stating that its enactment will not authorize, directly or indirectly, any further tariff reduction or other tariff concession by the United States not elsewhere authorized by the Congress.

The recent development of proposals for a common market and free trade area place Western Europe on the threshold of a great new movement toward economic integration. The OTC will help to assure that this movement will develop in ways beneficial to our trade and that of other free countries, avoiding the danger that regional trade arrangement will lead to new barriers and discriminations against our exports.

To achieve our objectives, it is essential that the United States chief representative to the Organization for Trade Cooperation be a person of wide experience in practical business matters, and that the members of the Advisory Committee likewise have had practical experience in their respective fields. I intend to appoint the Secretary of Commerce as Chairman of the Advisory Committee.

The foreign trade policies of the United States are based upon our reciprocal trade legislation and the agreements that have been negotiated under it. Until we establish the best possible machinery for administration of these agreements, we are needlessly failing to obtain their maximum possible benefits for American labor, industry, and agriculture. With membership in the proposed OTC we will be in the strongest possible position to achieve the full benefits that these agreements afford.

I recommend the early enactment of this proposal.

DWIGHT D. EISENHOWER