A Rise in Exports

"No industry in America is safe from damage by foreign goods." Thus warned James A. Chapman, president of the American Cotton Manufacturers Institute, in a speech last week to 1,000 industry leaders at the institute's annual meeting in Bal Harbour, Fla. Chapman called for "a reasonable system of import quotas--country by country and category by category."

Chapman's protectionist plea would find ready support from a small but growing number of U.S. producers pinched by foreign competition. Manufacturers of typewriters, fishing tackle, brass plumbing and floor tile, along with shrimp fishermen and horseradish-root growers, are asking the Government to check foreign competition. Such successful Japanese imports as transistor radios, umbrellas and chinaware are rising. So are imports of scissors and shears from Italy and West Germany, leather gloves from France and fish meal (for fertilizer) from Canada and Peru.

Fortnight ago, U.S. typewriter makers asked for a 30% duty with a $10 minimum on all foreign imports. They complained that typewriter imports have grown from 36,000 ten years ago to 470,000 last year, now account for 30% of the U.S. market. The fact is that U.S. makers themselves account for one-third of all typewriter imports from their own plants overseas. If typewriters are protected, a similar case could be made by automakers, electrical-equipment producers and other U.S. manufacturers who import products from foreign subsidiaries.

Creating Competition. Not many of the pleas for quotas or tariffs are likely to be heeded. The Administration and U.S. industry have learned that a quota or tariff system favoring one group usually brings new competition from another. Says a top Commerce Department official: "The inevitable result of controls is for U.S. importers to seek new sources of supply." Although the Japanese voluntarily limited their shipments of cotton goods to the U.S. in 1957, imports continued to rise. Last year they reached $202.3 million, v. $150.2 million in 1958. Japan's share of the U.S. market last year dropped by 22%. But other producers, such as Hong Kong, India, Pakistan, Formosa, Spain and Portugal, prodded by U.S. importers, more than made up the difference.

Amid the rise in protectionist sentiment, the U.S. is actually exporting more this year than last, selling far more overseas than it is buying. At the end of last year the surplus of exports over imports was down to $1.1 billion, a postwar low. Last week the Commerce Department reported that the surplus was on the rise again. February exports rose slightly over January's, to $1,576,100,000. February imports rose to $1,287,000,000, 13% over January, when they were unusually low. The U.S. export surplus is now running at an annual rate of $3.5 billion. Since December, U.S. exports have risen to the annual rate of $19 billion. While imports have also risen, they are running only at the annual rate of $15.5 billion.

Checking the Flow. The big reasons for the U.S.'s bigger trade balance are: 1) a reduction in steel imports following the end of the strike, 2) a slowdown in foreign auto imports, and 3) a pickup in exports of autos, trucks, machinery, aluminum, raw cotton and other commodities. The growing success of the campaign to export more was reflected by a big drop in the outflow of gold from the U.S. in the first quarter. In the first quarter last year, the U.S. lost $92 million in gold. Last week the Treasury reported that in the first quarter the outflow of gold was only $48 million.

Also responsible for the improvement: with high interest rates on short-term U.S. Government securities, foreigners have been willing to invest their funds in the U.S. rather than switch them abroad.

Foreign Discrimination. Despite the rise in exports, many U.S. industries complain that foreign nations are moving far too slowly to ease trade barriers. Last week the French government took a step to ease restrictions, lifted import quotas on more than 100 products, including chemicals, phonographs, dictating machines and plywood, rubber and plastic equipment. By 1961 France hopes to end all quotas. But U.S. businessmen face some new restrictions, not only in France but in other nations.

The U.S. tobacco industry, which ships 25% of all its exports to the six Common Market nations, faces a 30% tariff this summer. The common tariff, when fully applied, will be three times higher than the group's present average. Although cigarette consumption is rising throughout the world, U.S. makers have been hit by tariff increases or outright bans on imports by 65 nations during the past three years. Venezuela, traditionally one of the U.S.'s biggest cigarette customers, has banned cigarette imports.

For the first time in history, the U.S. auto industry last week went to the Government to complain about foreign tariffs. Before the Commerce Department, the Automobile Manufacturers' Association argued that European duties, purchase taxes and quotas have priced U.S. cars out of the market. Noted the association: with taxes and duties, a U.S. compact such as the Ford Falcon (New York list price: $2,040) costs an English buyer $5,238, an Italian $4,368 and a Frenchman $4,184. Many a businessman feels that unless foreign nations allow U.S. products to compete on equal terms in foreign markets, there will be a rise in protectionist sentiment in the U.S.

This file is automatically generated by a robot program, so reader's discretion is required.