15 percent reduction at the fourth round in 1956 which was phased in steps of 5 percent over the 2-year period, 1956-58.

no duty reductions since that time.

There have been

The ad valorem equivalents of the former rates of duty for mosaic tile and wall tile for selected years are (in percent):

The reduction in duties (ad valorem equivalent) from 1950 to the present was 14 percent for mosaic tile and 10 percent for wall tile. Yet imports of tile grew by almost 300 percent during 1955-60, by more than 100 percent between 1960-65, or by more than 700 percent for the entire 10-year period 1955-65. I believe that it would be wholly unrealistic to conclude that this phenomenal increase in imports has been caused in major part by the relatively small decrease in duties since 1950. 1/

Even going back to 1930 and considering the 57.5 percent reduction in duties on tile since that date, my finding would not be Fifty percent reductions in duty rates have by no means

different.

been rare in tariff bargaining. The Congress authorized reductions 1 The ad valorem equivalents are used here only to indicate the approximate duty reductions. Large variations in the ad valorem equivalents can occur depending on the composition of the trade, and these variations in turn would affect the indicated duty reductions. However, if the error in duty reductions calculated above is as much as 50 percent in either direction, the range in duty reductions from 1950 to 1963 would be only 7 to 21 percent for mosaic tile and only 5 to 15 percent for wall tile. This range of duty reductions would

up to 50 percent for the first round of tariff negotiations at the GATT, as it did for the sixth round, the Kennedy Round.

Although

the overall average reduction in both cases was less than 50 percent, reductions for many individual items were as high as 50 percent.

Such reductions, however, did not lead to import growth rates of 25 percent per year for the commodities affected.

Rather, such reduc

tions typically led to much more moderate import growth. In the
case of tile imports, a return to statutory rates would involve more
than doubling actual duties currently levied on both mosaic and wall
tile, but in neither case would such a duty increase equal the amount
of the price differentials prevailing between domestic and imported
tile. I conclude therefore that imports in the years 1950-1969
would not have been enormously reduced but for the duty reductions
that have occurred since 1930, and that some factor or group of
factors other than the tariff concessions are necessary to explain
in major part the increase in imports.

The

The Japanese economy has provided the bulk of imports of floor and wall tile. Several factors combined to bring about the large increase in exports of tile from Japan to the United States. market for tile in the United States expanded greatly after 1950 in response to a high level of construction. Japanese tile makers, producing quality products at a relatively low cost, have obtained an increasing share of this market. In particular, the Japanese have produced glazed mosaic tile at a cost sufficiently low to

I consider it significant that meaningful comparisons of prices for domestic and imported glazed mosaic tile are not possible (see page A16

of factual report).

Japanese tile manufacturers and exporters have acted together to control the competition in Japan and to expand the volume of their exports to the United States. As early as 1958, the Japanese tile manufacturers and exporters agreed voluntarily to adhere to "lowest standard prices" (check prices) on mosaic tile and wall tile for export to the United States. The Ministry for International Trade and Industry (MITI) was requested to enforce the check prices.

MITI

found that in the first half of 1960 almost one-third of the industry was invoicing tile at an average 25 percent below the check prices. Voluntary quotas were established for exports of unglazed mosaic tile in 1960 and for glazed mosaic tile in 1962, but were so administered by the industry that they not only did not hinder exports but in fact promoted them.

In April 1966, following the filing of a dumping complaint on imports of wall tile from Japan, the Japan Pottery Exporters Association (JPEA) set an overall voluntary quota of 34 million square feet of wall tile to be exported to the United States from April 1, 1966 to March 31, 1967. JPEA also set suggested minimum export prices to the United States. In October 1966, MITI imposed mandatory quotas on both glazed and unglazed mosaic tile for export to the United States and Canada, and made mandatory JPEA's voluntary quota and minimum prices on exports of wall tile to the United States.

These

recent restrictions appear to have been effective in limiting exports and are partially responsible for the reduced rate of import growth since 1965, as noted above.

In summary I believe that the entire series of tariff reductions since 1930 in timing and relative importance was not capable of explaining the enormous expansion of imports, and therefore the increased imports were not in major part the result of concessions granted under trade agreements.

The import growth appears to have

been caused by product differentiation and by the concerted efforts by Japanese producers to maximize exports, through the use of a

variety of more or less orthodox trade practices.

Dissenting Opinion of Commissioners Clubb and Moore

This investigation relates to a group of workers at the Cambridge Tile Mfg. Co., who have petitioned for adjustment assistance under the provisions of the Trade Expansion Act of 1962. We find that the criteria set forth in section 301(c)(2) of that Act have been met: (1) The relevant imports have increased; (2) the increase is attributable in major part to trade-agreement concessions; (3) the workers concerned are unemployed; and (4) the increased imports were the major factor causing such unemployment.

Increased imports

The first statutory requirement is that imports must have increased. U.S. imports of ceramic mosaic and wall tile--the products like or directly competitive with the articles produced by the petitioning workers--were at a record level in 1969. Entries of such tile in that year amounted to 159 million square feet, compared with 47 million square feet a decade earlier (table 3). Indeed, the growth in annual imports of ceramic mosaic and wall tile has been almost uninterrupted in the period since World War II. The first of the requirements has been met.

In major part

The second statutory requirement is that the increased imports must result in major part from concessions granted under trade agreeAs we have stated in previous decisions, 1/ in order to 1/ Buttweld Pipe, Inv. No. TEA-W-8 (1969) at 8-11, and Transmission

ments.