Mr. KING. We appreciate having your statement, Mr. Frase. Mr. C. Robert Devine is our next witness. You are recognized and may proceed, Mr. Devine. STATEMENT OF C. ROBERT DEVINE, CHAIRMAN, INTERNATIONAL COMMITTEE, MAGAZINE PUBLISHERS ASSOCIATION, INC.; ACCOMPANIED BY CHARLES D. ABLARD, VICE PRESIDENT, MAGAZINE PUBLISHERS ASSOCIATION, INC. Mr. DEVINE. Mr. Chairman and members of the committee, my name is C. Robert Devine, chairman of the International Committee of the Magazine Publishers Association, Inc., and deputy general managers of the Reader's Digest International Editions publishing 30 international editions in 14 languages. I am also the immediate past president of the International Advertising Association. Accompanying me is Mr. Charles D. Ablard, vice president of the Magazine Publishers Association representing 117 magazine publishing companies who publish over 300 periodicals of general interest in the United States and abroad. Last September 17, the President addressed the bicentennial celebration of the Smithsonian Institution and asked the Nation to "embark on a new and noble adventure" designed to aid the developing nations and regions of the world. Included in his five point program was a plan to "increase the free flow of books and ideas and art, of works of science and imagination." As a means of achieving that goal, the President had on June 1, 1965, transmitted to the Congress H.R. 8664, legislation to implement the Florence agreement to eliminate duties on imports of educational, scientific, and cultural materials. In transmitting the proposed legislation, the President stated: The purpose of the Florence Agreement is to promote the growth of international understanding by reducing trade barriers to the flow of knowledge in all directions across all frontiers. The President also urged implementation of the Florence agreement in his message on international education on February 2, 1966. We wholeheartedly support the President's goal of obtaining congressional implementation of the Florence agreement in the 89th Congress. As magazine publishers, we are fully aware of the importance of magazines in our educational programs both in the United States and abroad. Schools and libraries in this country have long benefited from their use, and the exchange of private media between countries has long been considered beneficial to the exposition of U.S. policies abroad. In furtherance of that end, the Congress since 1948 has proyided appropriations for the informational media guaranty fund to guarantee convertibility of currency obtained by publishers in the sale of books, magazines, and motion pictures in soft currency countries. Fifty nations have implemented the Florence agreement. Approval by the United States will conform our tariff laws with those of 50 countries which are now fully ratified signatories to the convention. Without ratification, U.S. publishers may be forced to pay tariffs which cannot be imposed on publications of signatory countries. But, more importantly, implementation of the treaty will show the other nations of the world, and especially the other 50 ratifying signatories, that the United States has an enlightened position on the subject of tariff barriers on educational and cultural materials. Magazines in general have fewer tariff problems than many of the other items covered by the Florence agreement. As you know, the United States imposes no tariff on the importation of magazines, and there are relatively few countries which impose a tariff on ours. Our own Reader's Digest magazines abroad are mainly manufactured abroad and not subject to tariff in any case. However, this does not detract from the basic principle involved in the legislation under consideration before this committee; namely, that the exchange of ideas should not be subject to tariff barriers. We believe strongly that, even though the immediate problem of tariffs on magazines is not an acute one, the implementation of treaty is most important as a matter of principle to magazine publishers. During the past 5 years, I have worked in 45 countries around the world and can personally testify to the great interest people in these countries have in American magazines. Everything we can do to assure continued flow of these magazines abroad will assist materially to implement U.S. foreign policy. Therefore, we urge the enactment of H.R. 8664 by the Congress to implement the worthy goals so eloquently expressed in the President's message on international education. Mr. KING. Thank you, Mr. Devine. Mr. CURTIS. Just one question, Mr. Devine. In regard to the problem of exchange controls, there is a point you make on the Informational Media Guaranty Fund. Shouldn't that largely eliminate any excuse for one of these developing nations to impose these restrictions? Mr. DEVINE. Well, sir, it may eventually, but the countries covered by the Informational Media Guaranty Fund are not necessarily the same as those which have ratified the Florence Agreement. Mr. CURTIS. You might examine that further. If you could give us any additional information for the record, I would appreciate it. Mr. DEVINE. I will do that. (The following information was received by the committee:) The countries covered by the Informational Media Guaranty Fund for Fiscal Year 1966 are Afghanistan, Guinea, Korea, Poland, Turkey, Vietnam, and Yugoslavia. Three of these nations, Afghanistan, Vietnam, and Yugoslavia, have fully ratified the Florence Agreement. The other four have not yet signed it. While the Florence Agreement does provide that signatories will undertake "as far as possible" to grant licenses and foreign exchange for the importation of educational, scientific, and cultural materials, there is no requirement that they unconditionally do so except for books and publications consigned to public libraries and to the libraries of public educational, research, and cultural institutions, and all official government and United Nations publications. Thus, the Florence Agreement, while encouraging the nations to provide foreign exchange, will not fully supplant the program of the Informational Media Guaranty Fund even in those countries which have ratified the Florence Agreement. The IMG program is exclusively aimed at providing protection against devaluation and guarantee of convertibility of foreign currency in com. mercial transactions in specified countries. Mr. DEVINE. In the case of Poland, for example, which is Informational Media Guaranty, American publishers selling publications in Poland are assured against loss in conversion of zlotys to dollars and Poland is not a signatory to the Florence agreement. Mr. CURTIS. How do the native regulations allow printing inside of Canada? How does this come within the Florence agreement? Mr. DEVINE. Maybe that is why Canada is not a signatory. Neither is Japan. Mr. CURTIS. Does Japan have a similar requirement to Canada? Mr. DEVINE. I don't know, sir. Mr. CURTIS. Is that why Reader's Digest prints in so many countries? Mr. DEVINE. We print in Canada and Japan. Mr. CURTIS. I know you do, but you said Reader's Digest-that in most of these countries you actually print within the country itself. Mr. DEVINE. Yes, sir. Mr. CURTIS. The question is, is that because these countries do have restrictions of this nature? Mr. DEVINE. Well, sir, I made that statement because I wanted to qualify my integrity as a witness and I am speaking primarily for the Magazine Publishers Association. Mr. CURTIS. I know that. All I am trying to do is get information. Mr. DEVINE. I think over the years in the development of our rather substantial business abroad this has been one of the more compelling reasons why we have sought to manufacture locally and in most cases do. Mr. CURTIS. I wasn't necessarily being adversely critical of these nations, but just wanted information for the record. Again it points out that I think there is a nationwide masochism going on that the Americans want to beat their breasts to get us to move forward, but I get a little tired of it when we run into some of these restrictive techniques that are imposed by these nations. Mr. DEVINE. Apropos that point, we lost a substantial printing press in Havana but we are still trying to manufacture locally where we can. Mr. KING. Thank you again, Mr. Devine, for coming to the committee and giving us the benefit of your views. The committee will now adjourn and reconvene at 10 a.m., tomorrow morning. (Whereupon, at 12:50 p.m., the committee was adjourned, to reconvene at 10 a.m., Tuesday, June 7, 1966.) IMPLEMENTATION OF FLORENCE AND BEIRUT AGREEMENTS TUESDAY, JUNE 7, 1966 HOUSE OF REPRESENTATIVES, Washington, DC. The committee met at 10:05 a.m., pursuant to recess, in the committee room, Longworth House Office Building, Hon. Cecil R. King presiding. Mr. KING. Our first witness this morning is Mr. O. R. Strackbein. It is good to see you again, Mr. Strackbein. STATEMENT OF 0. R. STRACKBEIN, INTERNATIONAL ALLIED PRINTING TRADES ASSOCIATION Mr. STRACKBEIN. Thank you. I have appeared before you on several occasions in the past. It is always a pleasure. Mr. KING. We would have difficulty knowing the other side of many stories without you, Mr. Strackbein. Mr. STRACKBEIN. My appearance this morning is with respect to H.R. 8664, or the Florence Agreement. I appear in behalf of the International Allied Printing Trades Association. This association is composed of printing trades unions affiliated with the AFL-CIO. The unions for which I speak are: The International Typographical Union, The Printing Pressmen's Union, The International Brotherhood of Bookbinders, The International Stereotypers' and Electrotypers' Union and the Lithographers and Photoengravers International Union. Their combined membership is upward of 300,000. These Unions are in accord with the principle of international dissemination of scientific, educational, and cultural materials with the least restrictions compatible with fair competitive practices. We, however, question the effectiveness of H.R. 8664 in its present form as an instrument that would assure a remedy against injurious developments under the free-trade provisions so far as books and other printed matter are concerned. 1. The protocol annexed to the Florence Agreement is not satisfactory as an instrument of defense against injury; and the legal standing of a substitute for this protocol, such as is provided under section 11 of H.R. 8664, which declares that "any duty-free treatment provided in this act, shall, for purposes of title III of the Trade Expansion Act of 1962, be treated as a concession granted under a trade agreement," would be very doubtful. I say that acceptance of this would be very doubtful. It would be in the nature of a unilateral modification of the protocol; and as such could be successfully challenged by any other signatory country as having no effect. 135 2. The provision of the Trade Expansion Act of 1962 relating to injury from imports, and which would come into play under the provisions just cited, that is, section 11 of H.R. 8664, has itself been a complete failure. It would be a cynical act to extend its total ineffectiveness to the printing industry as a special concession. The nullity of the adjustment assistance and similar provisions of the Trade Expansion Act of 1962 was recognized when it was superseded in the automotive trade agreement with Canada. Why then saddle this useless instrument on the printing industry, as if it would afford relief for injury even if it were recognized as having legal standing under the protocol? 3. The Florence agreement appears to discriminate between printed matter and scientific apparatus. The free importation of the latter, that is to say scientific apparatus, is properly restricted by regulations and by confinement to exclusively educational purposes or pure scientific research. The free importation of printed matter should be similarly restricted. Much importation of printed matter, including books, represents no more than commercial enterprise. Numerous books are not aimed at educational use and many of them are negative quantities so far as cultural benefits go. There is no justification for extending the duty-free treatment to them under an agreement designed to promote educational, scientific, and cultural development. Let me say here that I agree fully with the statement made before this committee yesterday by Mr. James French who was speaking for the Book Manufacturers' Institute. On page 4 he says that his second, and more focal, criticism is that it is improperly proposed in H.R. 8664 to wipe out the historic differentiation in our tariff between books written by American authors and books written by foreign authors and, furthermore, to eliminate the 7 percent duty rate applicable to books of American authorship as well as the 3 percent duty rate applicable to books of foreign authorship. He says that the Book Manufacturers' Institute favor, and have long supported, the elimination of the duties on imports of genuine foreign books. The elimination of such duties is requisite to promoting the free flow of ideas as envisioned by the authors of the Florence Agreement. However, we strongly object to the proposed elimination of the duty applicable to imports of books written by American authors. The removal of this duty is neither requisite under the Florence Agreement nor a wise or desirable move. The occasion for importing books of American authorship is almost always the importation for sale in the United States of a foreign-manufactured edition which was deliberately sent abroad for manufacture in order to avoid paying the cost of American skilled labor. He adds that: We do not believe that it was the purpose or intent of the framers of the Florence Agreement to facilitate this type of purely commercial book manufacturing transaction. As I say, I wish to endorse that statement as strongly as I can. That is the end of the quotation. Since, as I have said, numerous books that may be imported are not aimed at educational use and many of them are negative quantities so far as cultural benefits go, therefore there is no justification for extending the duty-free treatment to them under agreement to promote education and scientific and cultural development. There is therefore no justification for removing printing matter and noneducational and nonscientific books from the regular channel |