Message to the Congress Transmitting Annual Report on the Trade Agreements Program.

To the Congress of the United States:

I am pleased to transmit the Twelfth Annual Report on the Trade Agreements Program, as required by the Trade Expansion Act of 1962. The report covers the year 1967. The remarkable postwar growth of international trade continued uninterrupted in 1967, but at a slower pace. World trade grew by almost 5 percent, to a new record of $191 billion.

U.S.. trade grew by a little more than 5 percent. Our trade surplus for the year reached $4.1 billion, an improvement over the preceding year. The trade surplus fell off sharply, however, in the fourth quarter of 1967 and through the first half of 1968. We acted to reverse this trend through the Revenue and Expenditure Control Act of 1968 and by new export promotion measures.

The year was highlighted by the successful completion of the Kennedy Round--a milestone in the history of the bipartisan U.S.. policy of trade expansion. Tariffs have already begun to come down. The U.S.. made the first of five annual tariff reductions on January 1, 1968. The European Economic Community, the UK, Japan and some other major trading countries put into effect twofifths of their scheduled tariff reductions on July 1, 1968. These tariff cuts will promote trade, higher employment, and higher income among all countries.

America's economic well-being and the strength of the dollar are linked to our sharing fully in the future growth of world trade. I therefore directed the Special Representative for Trade Negotiations to conduct a long-range study of trade policy. This study will benefit from the views and recommendations of members of the Congress, the interested agencies of the government, and a distinguished group of private citizens serving on the Public Advisory Committee on Trade Policy. We must continue to seek ways in which foreign trade can help to keep our economy competitive and healthy and give to all our people the advantages of greater efficiency in production.

LYNDON B. JOHNSON

The White House

October 8, 1968