INTERNATIONAL TRADE AND INVESTMENT

The Trade Act of 1974 is now law. The AFL-CIO is convinced that this unfair statute will cause more unemployment and more production losses.

These disastrous effects have serious implications for teachers as the operation of every school district directly depends on tax revenues raised at the local level. When an unrestricted flood of imports encouraged by tax loopholes and manufactured abroad by workers paid low wages makes it impossible for an American company to compete and forces that company to lay-off employees and close facilities in the United States, the impact on a local tax base can be devastating. Already entire industries such as radio, television, electronics, shoes, toys and novelties have been virtually eliminated from the American scene. A company which is forced to close its doors pays no taxes and tax revenues from workers unemployed as a result are greatly reduced if they remain in the same locality at all. The purchasing power of those workers is also reduced by unemployment and thus the impact of a plant layoff or closure quickly spreads through a community further affecting the tax base. Furthermore, necessary social services for the families of unemployed workers strain budgets already squeezed by shrinkage of the tax base.

Some of the Trade Act's complicated provisions can be used to minimize the damage. These provisions should be 7widely publicized and enforcement demanded.

Action under the law should be taken by the President, the Congress and America's unions in the following ways:

• The President should use his authority under the Act to immediately curb those imports which are adversely affecting employment and which are contributing to the huge balance of payments deficit.

• The President should impose import restrictions against countries whose trade practices have placed unfair burdens on U.S. commerce.

• Although weakened by the Act, the countervailing duty and anti-dumping provisions of the law should be vigorously enforced by the President to meet unfair competition from abroad.

• The President should immediately curb the export of raw materials, technology and products, whose export adversely affect the national interest, as provided in the Trade Act and the Export Control Act.

• Import-hurt American unions should seek relief under the Act's escape clause, which provides for Presidential action after the finding of an injury by the International Trade Commission.

• Import-hurt American unions should seek to implement the adjustment assistance provisions for workers and communities by petitioning the Secretary of Labor and the Secretary of Commerce.

• Trade unions throughout the United States are urged to call the public's attention to job losses due to unregulated imports by appearing in hearings before tee International Trade Commission starting February 25 in Washington and in 13 additional major cities. Unions are also urged to participate in the hearings before the President's Trade Information Committee, to be held in the spring of 1975 on all aspects of the international trade negotiations.

• Congress should carry out its new authority for oversight of trade negotiations through a comprehensive program of direct input and monitoring of the trade negotiations.

• Congress should carefully examine all trade agreements reached through negotiation, and refuse to ratify those which adversely affect domestic employment and U.S. production.

• Congress should maintain constant oversight activities to insure effective implementation of those provisions of the law that may be used to aid workers and to preserve U.S. jobs and U.S. industries, such as anti-dumping, countervailing duties, adjustment assistance, adequate reporting and limitation on import-sensitive items.

• Congress should not approve any new trade agreements that include concessions that allow increased imports from Communist countries while American workers are desperately in need of jobs.

However, the implementation of all of the above measures can only minimize the damage that U.S. workers are suffering because of massive imports and the export of American jobs, technology and capital.

To overcome these injuries and to reverse the oppressive economic impact on America, Congress must initiate immediate legislative action. This legislative action must include:

• Revocation of provisions for the deferral of tax payments on foreign-earned profits;

• Elimination of the foreign tax credit, which provides U.S. companies with a dollar-for-dollar credit against their U.S. tax liabilities for their foreign tax and royalty payments;

• Repeal of Section 806:30 and 807 of the Tariff Code which encourage foreign production for shipment back to U.S. markets;

• Regulation of the export of American capital and technology which results in the export of American jobs.

The AFL-CIO supports strong, vigorous, fair international trade. But the rising tide of restrictions abroad, the ever-increasing impact of the multinational corporations, the staggering balance of payments deficits and the depression-level unemployment at home, require emer­gency measures.

The immediate use of the job-protecting provisions of the 1974 Trade Act by the President and the Congress can help. Vigorous participation by import-injured unions can help laid-off workers and those threatened with layoff. And, most important, remedial action by the Congress in the form of new trade legislation is necessary to revive the badly stricken American standard of living and restore the millions of U.S. jobs lost.

The American Federation of Teachers Executive Council is aware that the Trade Act of 1974 is already effecting a disservice to American workers and citizens. The increased unemployment and production losses which are the result of current U.S. trade policy have a direct impact on the ability of school districts to provide quality education because the tax revenues which fund education fall when factories close and employees are thrown out of work. American trade policy must be reversed. The American Federation of Teachers strongly supports new trade legislation which will institute fair international trade and remedy the injustices created by the Trade Act of 1974. (Executive Council )