This point was underscored by Congress in the Trade Expansion Act of 1962. The bill as passed the House provided that, in determining whether a firm or industry had been seriously injured, the Commission was to take into consideration all economic factors, including "inability to operate at a profit. In the Senate this phrase was broadened to read "inability to operate at a reasonable profit level." 1/ This change suggests that Congress intended the Commis sion to find serious injury if the domestic industry is unable to realize sufficient profit to justify continuing in business on a longAccordingly, it is incumbent upon the Commission to range basis. make a finding of serious injury in this case despite the fact that the domestic sheet glass industry has suffered only a modest decline in sales and production because the sharply downward trend of profits in the past few years makes it clear that a substantial portion of the industry cannot survive in the long run under present conditions. Remedies The Trade Expansion Act authorizes the President to provide two possible remedies for an industry seriously injured by imports. On the one hand, he can increase import restrictions, and on the other, he can grant trade adjustment assistance in the form of loans and tax relief to firms in the industry, and unemployment compensation, See the Conference Report on the Trade Expansion Act, H.Rept. No. 2518, 87th Cong., 2d Sess. (1962), p. 9. retraining, and relocations allowances to the workers. 1/ It is important to note in this connection that, although the Act requires the Commission to determine the level of import restrictions which would be necessary to remedy the injury, 2/ this determination does not constitute a recommendation by the Commission that import restrictions, rather than trade adjustment assistance should be given the industry involved. On the contrary, in this case there appear to be several considerations which may indicate that adjustment assistance, rather than increased import restrictions should be used. The first consideration is that one of the side effects of greater import restrictions on sheet glass would be an increase in 1 Section 302(a) provides, (a) After receiving a report from the Tariff Commission con- (1) provide tariff adjustment for such industry pur- (2) provide, with respect to such industry, that its (3) provide, with respect to such industry, that its (4) take any combination of such actions. 2/ Section 301 (e) provides, (e) Should the Tariff Commission find with respect to any the cost of housing in the United States. Higher tariffs on imported sheet glass would undoubtedly raise the price of both imported and domestic sheet glass. (Indeed, if they would not, it is questionable whether the higher tariffs would help the domestic sheet glass industry.) If the price were raised by the full amount of the tariff increase found necessary by the Commission, it would cost U.S. sheet glass consumers about $14 million annually. Since the greatest vol ume of sheet glass is consumed by the U.S. construction industry--and a large part is used in residential construction--import restrictions on sheet glass must ultimately be reflected in an increased cost of housing. Second, the firms, workers, and communities which have suffered most from import injury, would likely gain less from higher tariffs than those who have remained healthy. Although the sheet glass indus try as a whole has been seriously injured, this injury has been unevenly felt within the industry. Certain aggressive firms with modern plants are very healthy and need no assistance to compete effectively; others are continuing to show losses; still others have reduced production or have closed marginal plants. If a general increase in demand for domestic sheet glass were brought about by higher tariffs, the domestic firms and plants likely to benefit most would be those which are already healthy. At the very least such firms would benefit as much as their less healthy competitors. In contrast, ad justment assistance could be selectively used to benefit most those who have been injured most. Finally, adjustment assistance could be granted over a relatively short time period, while there is a tendency for import restrictions to go on and on. In this connection it might be observed that this industry has already had the benefit of some form of escape clause protection since 1962, and still it is being seriously injured by im ports. Adjustment assistance might well be able to solve the prob lem better in a quicker, less expensive manner. Statement of Commissioner Leonard Under section 301(b)(1) of the Trade Expansion Act of 1962, an affirmative finding by the Tariff Commission in a case must rest on 1. Whether the article in question is being imported in 2. 3. 4. Whether the increased imports are a result in major Whether the domestic industry producing an article Whether the increased imports have been the major fac- In the instant investigation, I have concluded that the case with respect to sheet glass fails to meet the fourth requirement set forth above, and the case with respect to plate and float glass, rolled glass, and tempered glass fails to meet the third requirement. Having so found, it is unnecessary for me to reach conclusions respecting the other statutory requirements. The principal reasons for my finding with respect to sheet glass are set forth below. With respect to plate and float glass, rolled glass, and tempered glass, I agree with the reasons relating to the lack of serious. injury given by Commissioner Newsom in his statement. |