Foreign Relations of the United States, 1961–1963, Volumes VII, VIII, IX, Arms Control; National Security Policy; Foreign Economic Policy, Microfiche Supplement

457. Minutes of Cabinet Textile Advisory Committee, July 18¹

July 18, 1962

PRESENT

• Luther H. Hodges, Secretary of Commerce, Chairman
• George W. Ball, Under Secretary of State
• Charles S. Murphy, Under Secretary of Agriculture
• Meyer Feldman, Deputy Special Counsel to the President
• G. Griffith Johnson, Assistant Secretary of State
• Hickman Price, Jr., Assistant Secretary of Commerce
• W. Michael Blumenthal, Deputy Assistant Secretary of State
• E. Wayne Weant, Deputy Assistant Secretary of Commerce
• Daniel P. Moynihan, Special Assistant to the Secretary of Labor
• Robert A. Wallace, Special Assistant to the Secretary of the Treasury
• Stanley Nehmer, Department of State
• Robert C. Sherman, Department of Agriculture

The meeting was called to order by Secretary Hodges, as Chairman.

Woolens

Mr. Feldman led a discussion on woolens. He described recent discussions with representatives of the National Association of Wool Manufacturers and submitted a draft of a letter from him to the President of that Association, on which he asked for approval or suggestions.

The report of the Ad Hoc Subcommittee, consisting of representatives of Departments of State, Commerce, and Labor, dated July 13, 1962, was then considered and approved. A copy of this report is attached hereto as Annex A.

The State Department was requested to take necessary steps to call a meeting of the International Wool Study Group and to prepare a press release covering this. Mr. Price was instructed to call a meeting of the Wool Advisory Committee after the State Department has arranged for the organization of the proposed meeting of the International Wool Study Group, and immediately prior to issuance of the press release to inform the members thereof as to proposed action.

Mr. Feldman observed that it would be desirable at the same time to inform a selected list of Senators who are interested in the wool and woolen textile problem of this new development of the Administration’s program, and said that he would prepare a letter for this purpose.

The Committee then instructed the Interagency Textile Administrative Committee to expand its functions to include monthly and continuing studies of importations of textile products manufactured from fibers other than cotton and to report to the Committee any significant changes of import trends, this being in line with the last paragraph of the recommendation of the Ad Hoc Subcommittee.

The Administration’s policy to hold imports of wool textile products to approximately the present level was reiterated.

Short Term Arrangement

The next item on the agenda was import results and problems arising therefrom during the first eight months of the Short Term Arrangement.

Mr. Feldman explained to the Committee the history underlying the letter dated June 27th from the President to Congressman Vinson. Mr. Feldman explained that the President was attracted to the principle of the ratio of imports to domestic consumption, the basis for restrictions to be the quantitative import level of FY 61. The President’s idea is to set a limit of 6% on imports to domestic consumption during the life of both the Short Term and Long Term Arrangements on the theory that it is virtually impossible to administer a program involving so many nations and categories in such a way as to hold to an exact total such as the quantitative figure of FY ’61.

Secretary Hodges read appropriate sections of the President’s letter of June 27, 1962, to Congressman Vinson, which is attached hereto as Annex B.

The Chairman gave a report on imports during the first eight months of the Short Term Arrangement, which are summarized as Annexes C, D and E hereof.

Mr. Blumenthal stated that due to the large number of categories presently under restraint from a number of countries, he anticipated that imports for the 12 months ending September 30, 1962, would be somewhere between 115 and 120 percent of FY ’61, and that imports in the last month of the Short Term Arrangement year might be as low as 2%. He further said that the State Department’s estimates were that this would result in an import/consumption ratio for the 12 months ending September 30, 1962, of slightly less than 6%. Mr. Price agreed that this was a theoretical possibility but that experience has shown that imports from countries not under restraint tend to increase sharply in those categories where one or more important countries were under restraint and that as a result these estimates were a bit too hopeful.

Discussion ensued as to possible means of curtailing imports during the remainder of the 12 months ending September 30, 1962, so as to achieve the lowest possible excess above the level of FY 1961. There was some discussion as to how far it was feasible to request restraint from countries not now restrained in categories which are under restraint in the case of one or more other countries. It was concluded that restraint actions should be taken wherever feasible in order to prevent further disruption in such categories and to cut down further the total flow of imports during the remainder of the Short Term Arrangement year, but that caution should be exercised not to accentuate international complications by requesting restraint from countries whose exports in such categories are not significant in relation to the total. ITAC was requested by the Committee to restudy the entire import situation under the Short Term Arrangement and to take such action as may be necessary under the above criteria.

Long Term Arrangement

Conversation then progressed to the Long Term Arrangement. The question was raised as to the possibility of negotiations with one or more countries who have shipped during the Short Term Arrangement year quantities substantially in excess of the level of FY 1961. Mr. Blumenthal said that the State Department was prepared to open discussions with Portugal, from which country in the first 8 months imports had reached 147% of its total FY 1961 base level and which had continued to export large quantities of carded yarn to the United States after it had advised the State Department that no further shipments would be permitted after March 12th. It was proposed that the United States would request Portugal to delete from any restraint level requested under the Long Term Arrangement the amount of yarn exported from Portugal during the Short Term Arrangement year after March 12, 1962.

Further discussions developed as to the possibility of requesting cut backs from other countries based on excessive shipment in the 12 months ending September 30, 1962, from which agreement was reached on four basic points:

(a) The United States will not reopen negotiations of the Long Term Arrangement;

(b) The United States will undertake negotiations with the largest five or six exporting countries, particularly those which are under restraint in important categories, to prevent an undue concentration of exports in the first few months of the Long Term Arrangement following the end of the restraint and/or embargo period of October 1. The limited time in which to accomplish this was emphasized.

(c) A plan is to be developed in the immediate future with all of the large exporting countries toward the end of spacing shipments under the Long Term Arrangement at an even rate of flow in order to avoid undue concentration in any one period, since the Long Term Arrangement does not specifically make provision for such even spacing;

(d) ITAC is to undertake a study toward the end of ascertaining best base periods under which to effect restraints under the Long Term Arrangement, following the first 12 out of the previous 15 month formula.

A subcommittee within ITAC was appointed to prepare a program of guide lines and procedures for operation under the Long Term Arrangement. This subcommittee will consist of Hickman Price, Jr., W. Michael Blumenthal and Daniel P. Moynihan.

There was some discussion with regard to the rights of a minority within ITAC. The Chairman read from minutes of the meeting of this committee of May 7, 1962, as follows:

“Secretary Hodges stated that it was necessary to regularize the operations of the Interagency Textile Advisory Committee so that at its meetings each representative of the Departments concerned would have full authority, if possible, to act at the meeting. In the event this were not possible, or if the representative of any Department desired to appeal a decision being taken on majority vote by ITAC, such representative should appeal the decision within two days in writing to Secretary Hodges as Chairman of the President’s Cabinet Textile Advisory Committee.”

The principle contained in the minutes as above quoted was reconfirmed, including the rights of either a majority or a minority of ITAC to appeal to this Committee.

The Chairman advised that it was most important for all of the members of ITAC to operate on a team basis and to cooperate to the fullest extent amongst themselves toward the end of achieving the objectives of the President’s Textile Program of May 2, 1961.

Annex A

July 13, 1962

Report of Ad Hoc Subcommittee

On May 7, 1962, the Cabinet Textile Committee appointed a Subcommittee to study the implementation of the President’s Seven-Point Program with respect to textiles other than cotton. In view of the strong feeling expressed by the Cabinet Textile Committee that there should be no international negotiations, there is a need to make recommendations to the Committee that could be employed in providing a positive response to the requests by representatives of the woolen and man-made fiber textile industries for governmental assistance.

After a detailed appraisal of the situation, the Subcommittee reaffirms the Cabinet Textile Committee’s decision not to undertake international negotiations on woolen and man-made fiber textiles. The Subcommittee also recommends that the Tariff Commission should not be asked to undertake a study on imports of these items at this time in view of the fact that the industries concerned desire action rather than the promise of another study.

However, in view of the representations made by industry leaders that the domestic market in woolen and man-made fiber textiles and products is being substantially depressed by imports from foreign countries, the Subcommittee recommends that the Management Committee of the International Wool Study Group be requested to call a meeting of its member countries to explore those present and future problems of international trade in wool and woolen products and competing fibers and products that are of mutual concern to them.

The Department of State would first informally approach the United Kingdom Government and such other governments as it considers necessary to lay the necessary groundwork for the United States request to the Management Committee. The Department would indicate that it is not the intention of the United States to propose an international agreement at the meeting of the International Wool Study Group, but rather to reconvene a forum for all countries to discuss and study the commodities concerned and the problems confronting these commodities in international trade.

The Subcommittee also recommends that the terms of reference of the Interagency Textile Administrative Committee be broadened to permit it to consider textiles other than cotton textiles, pursuant to the President’s Seven-Point Program of May 1961.

G. Griffith Johnson

Assistant Secretary of State for
Economic Affairs

Hickman Price, Jr.

Assistant Secretary of Commerce
for Domestic Affairs

W. Willard Wirtz

Under Secretary
of Labor

Attachment

June 27, 1962

Dear Carl:

I have carefully studied your letter of June 13. The arguments you make and the statistics you present are very persuasive.

It seems to me important to maintain a relationship between the volume of imports of cotton textile products and domestic consumption in such a manner as to prevent dislocation of domestic production, thus permitting the textile industry and individual mills to plan intelligently, on the basis of estimated demand. Such programing of imports and domestic production will permit the industry to assume its rightful place as a growing, vital factor in the economy.

As you know, the imports of cotton textile products are now subject to limitation under the Short-Term International Cotton Textile Arrangement expiring September 30, 1962. There has also been negotiated with 18 other nations a Long-Term International Cotton Textile Arrangement, expiring September 30, 1967, which will become effective October 1, 1962, upon adherence by the nations involved.

I note particularly your reference to the level of imports of cotton textile products during the first seven months of the Short-Term International Arrangement. Since it has been our intention to use imports during Fiscal Year 1961 as the base period for calculating the appropriate relationship between imports and domestic consumption, the excessive imports in recent months have been disappointing. It occured due to temporary factors associated with the newness of the Arrangement and the lack of authority for dealing with nations not participating in the International Arrangement which was corrected by PL 87–488.

I am informed that these temporary factors have not been substantially resolved. Nevertheless, I am requesting the Departments of Agriculture, Commerce, Labor, State, and Treasury, which are represented on the Interagency Textile Administration Committee, to take such measures as may be necessary to limit imports of cotton textile products during the remainder of the Short-Term Arrangement to the desired level.

Similarly, it is our intention to use the terms of the Long-Term Arrangement in such a way as to limit imports of cotton textile products during its life to a level designed to achieve the objectives of the second paragraph of this letter. This would mean that the ratio of imports to consumption would be approximately that of Fiscal Year 1961, adjusted to such mandatory increases as are provided by the Arrangement. To prevent hardship to any one sector of the industry, the level of imports in each category will be held as closely as possible to the same desired level.

It is my intention that these agreements, together with such other powers as are available to the Executive department, be implemented and exercised in such a way as to prevent any further deterioration in the relationship between imports and domestic consumption.

With regard to textile products manufactured from fibers other than cotton, imports are being carefully scrutinized monthly. If a rising trend of imports above present levels affects adversely domestic industry, such measures will be taken as may be necessary to prevent deterioration in the imports/domestic consumption relationship.

I appreciate the assistance you have rendered in helping meet this objective.

Best personal regards.

Sincerely,

JFK

Annex C

Certain Performance Figures
under the Short-Term Arrangement
(which excludes Japan)

(Millions of sq. yds. equiv.)
12 months ending June 30, 1961	567
8 months at FY 1961 going rate	378
8 months actual imports	514
8 months excess above FY 1961 going rate	136
% in excess above FY 1961 going rate	36.0%

The following countries have importantly contributed to the overages:

Country	FY 1961	8 mos.		% of
	8 mos. Going Rate	Actual Imports	Excess	Excess
Hong Kong	135	221	86	64%
Portugal	33	72	39	118
Taiwan	16	28	12	75

Annex D

RATIOS BY WEIGHT
Imports/Consumption

	Monthly	Cumulative
1957	2.5 %
1958	3.0
1959	4.0
1960	6.0
FY 6/30/61	5.22
1961	4.7
October 1961	4.8 %	4.8 %
November	3.9	4.3
December	6.6	5.0
January 1962	6.9	5.5
February	7.5	5.9
March	8.3	6.3
April	7.5	6.5
May	7.4	6.6

Annex E

IMPORTS
in Square Yard Equivalents
(millions)

	All Countries except Japan	Japan	Total
FY 6/30/61	566.9	245.9	812.9
Oct. 1961	41.7	17.8	59.5
Nov.	41.8	18.5	60.2
Dec.	57.7	22.9	80.7
Jan. 1962	72.0	42.0	114.0
Feb.	72.4	25.9	98.3
Mar.	78.0	30.7	108.7
Apr.	85.6	33.5	119.1
May	65.3	33.5	98.8
Total 8 Months Ending May ’62	514.0	224.8	738.8
% of FY 6/30/61	92	91	92
Balance to reach FY 6/30/61 in remaining 4 mths.	52.9	21.1	74.1

Attachment

July 27, 1962

Dear George:

Attached hereto are the minutes of the meeting of the President’s Textile Advisory Committee of July 18, 1962.

If there are any changes which you would care to make I would appreciate hearing from you.

Sincerely yours,

Luther H. Hodges

Secretary of Commerce

1. Discussion of import restrictions. Attached is a June 27 letter from President Kennedy to Congressman Vinson on textile concerns. Confidential. 13 pp. Department of State, Central Files, 100.4/7–2762.