Special Message to the Congress on the Reciprocal Trade Agreements Program.

To the Congress of the United States:

I request the Congress to enact legislation that will permit a continuation of the reciprocal trade agreements program on an effective basis for a minimum of five additional years past June 30, 1958.

The enactment of this legislation--unweakened by amendments of a kind that would impair its effectiveness--is essential to our national economic interest, to our security, and to our foreign relations.

The high importance of trade to our economy is evident. The income of our people arising from export trade alone approximates or exceeds that arising from many major segments of our economy. The development of a healthy export trade has created a significant number of jobs for our working men and women. Imports furnish our industries with essential raw materials and the benefits of technological advances, add to the variety of goods available to our consumers, and also create jobs for our workers. Moreover, important geographical areas within our country, as well as many of our key industries in both manufacturing and agriculture, look to expanding world trade as an essential ingredient of their future prosperity.

Reciprocal trade agreements negotiated since the advent of the Trade Agreements Act have helped bring a more vigorous, dynamic growth to our American economy. Our own economic self-interest, therefore, demands a continuation of the trade agreements program. Under this program sound two-way trade can be further developed to assure to our industries widening opportunities for participation in world markets, and to provide foreign nations the opportunity to earn the dollars to pay for the goods we sell. We can either receive the benefits of the reciprocal lowering of trade barriers or suffer the inevitable alternative of increasingly high barriers against our own commerce which would weaken our economy and jeopardize American jobs.

Important as growing international trade is to our country, it is equally important to our Allies and trading partners. For them it is indeed vital to the health and growing strength of their economies, on which their political stability and military power heavily depend. The assured future of the reciprocal trade program is necessary for our national security and for our entire foreign policy.

In particular, it is essential to enable us to meet the latest form of economic challenge to the free world presented by Communism. In the State of the Union message, I spoke of the economic offensive that has been mounted against free nations by the Communist imperialists. The Soviet Union is engaged in an intensive effort, through combined programs of trade and aid, to divide the countries of the free world, to detach them one by one and swing them into the orbit of Communist influence.

We must recognize the growing capacity of the Soviet Union in the economic field. Their advances in technology and industrialization, together with their continuing repression of domestic consumption, enable them to supply, better than ever before, the machinery, manufactures, and other goods which are essential to the economic life of many countries.

The Soviet capacity to export is matched by its capacity and willingness to import. It is increasingly offering to import the surpluses of non-Communist States. In this way it seeks to tie such States to the Soviet orbit, and to exploit the trade difficulties of the free world.

This challenge in the economic field cannot be ignored without the gravest risk to our way of life. This fact alone makes it imperative that previous positions be re-examined, and that particular interests be reappraised in the light of overriding national needs.

The question is whether the system of free competitive enterprise for which we stand will meet successfully in the international economic arena the challenge hurled by the Soviet leaders.

We will fail in this endeavor if the free countries do not continue their reduction of the barriers which they themselves impose on their trade with each other. We will fail if closed markets and foreign exchange shortages force free world countries into economic dependence upon the Communist bloc. We will fail if the United States should now abandon the task of building a world trading system from which all free world countries can gain strength and prosperity in a free economic society.

If our government is to play its decisive part in protecting and strengthening the free economic system against the Communist threat, the trade agreements legislation which the Administration is requesting of the Congress must be enacted.

The Secretary of Commerce, who is Chairman of the Trade Policy Committee which I recently established to advise and assist me in the administration of the trade agreements program, including review of recommendations of the United States Tariff Commission, will transmit to the Congress the Administration's legislative proposals. These proposals, including the various safeguards for domestic industry, will generally follow the pattern set by the Trade Agreements Extension Act of 1955.

The amount of tariff reduction authority to be requested is essential to the continuing success of the program, as is the five year period of the proposed extension to the continuity in our trade relations.

There is a further and very specific factor necessitating a minimum extension of five years. Six European nations, which purchased nearly $3 billion of our exports last year, have established a European Economic Community which will become a common market with a population nearly as large as our own. These countries will ultimately have a common tariff applying to imports from the rest of the world. It is anticipated that important steps toward this common tariff will become effective during 1962--up to four-and-one-half years from the renewal date of our trade agreements legislation. This period must be devoted to negotiations with the new Economic Community and these negotiations must be preceded by painstaking preparations. Both preparation and negotiation must be based on a clear grant of adequate authority. This timetable requires an extension of the legislation for a minimum of five years. Such an extension, with the tariff reduction authority to be requested, is necessary to carry the trade agreements program through the early formative years of the European Economic Community and strengthen our ability to further vital American interests there and elsewhere in the world.

The five-year extension of the Trade Agreements Act with broadened authority to negotiate is essential to America's vital national interests. It will strengthen our economy which is the foundation of our national security. It will enhance the economic health and strength of the free world. It will provide a powerful force in waging total peace.

DWIGHT D. EISENHOWER