the English and French languages, each being equally authentic, on behalf of their respective Governments, on the dates appearing opposite their respective signatures. Hon. WILBUR D. MILLS, DEPARTMENT OF HEALTH, EDUCATION, AND WELFARE, Chairman, Committee on Ways and Means, Washington, D.C. Washington, June 8, 1966. DEAR MR. CHAIRMAN: This letter is in response to your request of March 31, 1966, for a report on H.R. 8664, a bill "To implement the Agreement on the Importation of Educational, Scientific, and Cultural Materials, opened for signature at Lake Success on November 22, 1950, and for other purposes." This bill would provide for United States implementation of the Agreement on the Importation of Educational, Scientific, and Cultural Materials of November 22. 1950 (commonly called the Florence Agreement). 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 United States participated in the negotiation of this agreement which is now in force in 47 countries. The agreement was signed on behalf of the United States on June 24, 1959, and was ratified by the Senate on February 23, 1960. The final U.S. step-implementing legislation-is provided by H.R. 8664. H.R. 8664 would amend existing U.S. Tariff Schedules to provide for dutyfree treatment of certain scientific, educational, and cultural materials as required by the Florence Agreement. These materials would include scientific instruments and apparatus; books, pamphlets, and other printed and manuscript material; works of art and antiques; documents of foreign governments and international organizations; scientific specimens; articles for exhibitions; etc. In some cases, free entry would be subject to safeguarding qualifications of one kind or another. With specific reference to scientific instruments, H.R. 8664 would permit nonprofit scientific and educational institutions to import, duty free, scientific instruments upon application to the Secretary of the Treasury and determination by the Secretary of Commerce that no instrument of equivalent scientific value is manufactured in the United States. In making this determination, the Secretary of Commerce would afford an opportunity for hearing the views of interested parties and would receive the written advice of the Secretary of Health, Education, and Welfare on the availability of equivalent American instrument. The bill would also amend Tariff Schedules to delete present duty-free entry of electron microscopes. This would put the entry of these instruments on the same basis as that of other scientific instruments. The proposed amendments to the Tariff Schedules would become effective on a date to be proclaimed by the President. This date would be within a period of three months after the U.S. instrument ratifying the Agreement has been deposited with the Secretary General of the United Nations. The Department fully supports the objectives of the Florence Agreement and believes that H.R. 8664 represents an intelligent and constructive approach to attaining these objectives. Enactment of the legislation would be of very material benefit to our schools and universities, science laboratories and research foundations, libraries, art galleries, museums, as well as institutions and organizations devoted to the welfare of the blind. The Department has been particularly concerned by the burden which is imposed on the limited resources of scientific and educational institutions by the present tariff charged on scientific instruments. H.R. 8664 is considered to be an equitable solution to difficulties in this area. We would therefore recommend that H.R. 8664 be enacted by the Congress. We are advised by the Bureau of the Budget that there is no objection to the presentation of this report from the standpoint of the Administration's program. Sincerely, /s/ WILBUR J. COHEN, Under Secretary. EXECUTIVE OFFICE OF THE PRESIDENT, OFFICE OF THE SPECIAL REPRESENTATIVE FOR TRADE NEGOTIATIONS, Hon. WILBUR D. MILLS, Chairman, Committee on Ways and Means, Washington, D.C. Washington, D.C., June 3, 1966. DEAR MR. CHAIRMAN: I understand that the Ways and Means Committee will shortly begin consideration of H.R. 8664, which would implement the Agreement on the Importation of Educational, Scientific, and Cultural Materials, commonly known as the "Florence Agreement". This proposed legislation is not directly related to the Kennedy Round of tariff negotiations or to the trade agreements program, for which this Office is responsible. However, by providing duty-free treatment for a broad range of educational, scientific, and cultural materials, it would make a significant contribution to increased trade and would be wholly consistent with our liberal trade policy. Accordingly, this Office strongly supports the proposed legislation, and hopes that it will be enacted by the Congress as soon as possible. The Bureau of the Budget advises that from the standpoint of the Administration's program, there is no objection to the submission of this report. Most sincerely yours, CHRISTIAN A. HERTER, THE GENERAL COUNSEL OF THE TREASURY, Hon. WILBUR D. MILLS, Chairman, Committee on Ways and Means, Washington, D.C. DEAR MR. CHAIRMAN: Reference is made to your request for the views of this Department on H.R. 15271, "To implement the Agreement on the Importation of Educational, Scientific, and Cultural Materials, opened for signature at Lake Success on November 22, 1950, and for other purposes.' The purpose of the Agreement is to facilitate the duty-free exchanges of educational, scientific, and cultural materials between all countries of the world. The bill, if enacted, would increase the number of duty-free provisions applicable to printed matter so that nearly all printed mater susceptible of authorship would be free of duty, enlarge the scope of provisions permitting duty-free entry of artistic objects, authorize certain nonprofit organizations to import free of duty scientific instruments and aparatus the scientific equivalent of which is not manufactured in this country, and make a few other minor changes in the Tariff Schedules of the United States in harmony with the aims of the Agreement. This Department does not anticipate any unusual administrative difficulties if the bill is enacted into law and recommends enactment of the bill. This Department was advised by the Bureau of the Budget that there was no objection from the standpoint of the Administration's program to the submission to the Committee of an identical report on H.R. 8664, an identical bill. Sincerely yours, FRED B. SMITH, General Counsel. U.S. TARIFF COMMISSION, MEMORANDUM TO COMMITTEE ON WAYS AND MEANS ON H.R. 8664, 89TH CONGRESS, A BILL "TO IMPLEMENT THE AGREEMENT ON THE IMPORTATION OF EDUCATIONAL, SCIENTIFIC, AND CULTURAL MATERIALS, OPENED FOR SIGNATURE AT LAKE SUCCESS ON NOVEMBER 22, 1950, and for OTHER PURPOSES" H.R. 8664, if enacted, would amend the provisions of the Tariff Schedules of the United States (TSUS) so as to enable the United States to ratify and give effect to an international "Agreement on the Importation of Educational, Scientific, and Cultural Materials" of November 22, 1950, commonly knows as the "Florence Agreement" or "Unesco Agreement" and hereinafter referred to as the "Agreement." The bill would also provide for the application of the tariff adjust ment and other adjustment provisions of Title III of the Trade Expansion Act of 1962 in connection with the tariff amendments which would be made by the bill. The Agreement is sponsored by the United Nations Educational, Scientific and Cultural Organization (Unesco). The text was adopted at a session of the General Conference at Florence in July 1950, which accounts for its being known as the Florence Agreement. After being opened for signature on November 22, 1950, at United Nations headquarters in New York, it entered into force on May 21, 1952, with the ratification or acceptance of ten nations. Fifty nations are presently parties to the Agreement, not including the United States which has never ratified the Agreement. The United States participated in the negotiation of the Agreement but we did not sign until June 24, 1959. Thereafter the Committee on Foreign Relations of the Senate held public hearings on the Agreement on January 26, 1960; the Senate on February 23, 1960 gave advice and consent to its ratification. The Agreement is concerned with the free exchange of ideas and knowledge between nations, to be accomplished primarily by means of the free interchange of books, publications, and educational, scientific and cultural materials. In part the Agreement provides generally that there should be no charges (other than those which apply also to domestic merchandise) in connection with the importation of such materials into the contracting States. The parties are to grant necessary licenses, foreign exchange, and avoid other restrictions and impediments. Assurances are provided in the Agreement that the rights of individual nations are to be respected on such matters as national security, public morals, outstanding international obligations, copyrights, trade-marks or patents. There is a separate provision whereby the parties may withdraw from the Agreement. The articles for which free entry is to be accorded pursuant to the Agreement are listed in Annexes A, B, C, D and E to the Agreement. The relevant provisions of the Annexes will be discussed below in connection with our comments on the provisions of the bill. 2 PROVISIONS OF H.R. 8664 The bill is designed to permit the President to give effect to the Agreement. In determining how to accomplish this result, consideration was given to two methods: (1) the enactment of a simple enabling authority directed towards giving effect to the Agreement as a separate collateral provision of law to be interpreted and administered by customs authorities, or (2) the enactment of specific amendments of the TSUS designed to make the duty-free privileges accorded under the TSUS consistent with the Agreement. It is generally agreed that it would be highly desirable that the United States give effect to the Agreement by the second method, i.e., direct amendment of the TSUS, as is proposed in H.R. 8664, for the reason that the article descriptions in the Agreement are in some respects unclear. Consolidation of the relevant duty exemptions into the TSUS would clarify their scope and facilitate administration. Such action also would be consistent with the purposes of the study made by the Tariff Commission leading to the adoption of the consolidation and revision of the tariff classification laws embodied in the TSUS. A substantial trade in imported articles of certain of the types embraced by the Agreement is already accorded free entry under existing provisions of the TSUS (see Appendix 2, table 1 to this report). Thus, the provisions of H.R. 8664 are directed primarily toward appropriate amendments of those provisions of the TSUS imposing duties on articles which pursuant to the Agreement should be duty free (See Appendix 2, table 2). The Annexes to the Agreement in some instances impose limitations on the exemptions listed therein. For example, under its terms Annex A does not apply to "Newspapers and periodicals in which the advertising mattter is in excess of 70 per cent by space". With respect to certain other books, publications and documents, the Annex does not apply if the advertising matter in them "is in excess of 25 per cent by space". These limitations and certain other limitations were not incorporated in the draft legislation for the reason that they are either regarded as not being significant or 1 The Agreement is reproduced as Appendix 1 of this report. 2 The Tariff Commission furnished to the executive departments technical assistance in drafting the provisions of H.R. 8664 and the related "Analysis of Florence Agreement Implementing Legislation". This report is confined generally to certain matters as to which it is believed further comment may be of assistance. in some instances would be limitations on duty-free exemptions already accorded by the United States. Under the terms of the Agreement, the obligations of contracting parties to accord the duty exemptions set forth in the Agreement need apply only with respect to other contracting parties. However, the obligations of the United States would not only run to such contracting parties but to all other parties who have such rights under existing commercial agreements providing for m-f-n treatment. The duty exemptions which would be enacted in H.R. 8664 have been generalized and would apply to all of the articles involved, irrespective of their country of origin. The sections of the bill are analyzed below in numerical order. Section 1. Short title, etc. Under this section, the short title of the proposed legislation is given as "The Educational, Scientific, and Cultural Materials Importation Act of 1965". The date "1965" should be corrected to "1966". This section also sets forth the purpose of the bill. Subsection (c) includes a technical provision regarding amendments of the TSUS. Inasmuch at the Tariff Schedules Technical Amendments Act of 1965 in section 1(c) authorized the use of "Tariff Schedules of the United States" as the official designation of the tariff schedules, it is suggested that a period be inserted in line 9, page 2, after the words "United States" and that the rest of subsection (c) (lines 9 to 15) be deleted. Such a change would also require a deletion of all the references in the bill to page numbers in the original publication of the TSUS in the Federal Register. Section 2. Effective date This section provides that the provisions of the bill shall become effective with respect to articles entered, or withdrawn from warehouse, for consumption on and after a date to be proclaimed by the President, but it is provided that such date shall be within a period of three months after the date on which the United States instrument of ratification of the Agreement is deposited with the Secretary General of the United Nations. Section 3. Books, pamphlets, and other printed and manuscript material Annex A to the Agreement provides for the free entry of books, newspapers, periodicals, and other categories of printed matter. Except for architectural plans and designs, which by the Agreement are specified to be for study in scientific establishments or educational institutions, all Annex A articles are intended to be unconditionally free of duty without qualification as to their educational, scientific, or cultural character or use. Under the TSUS, such books and pamphlets as those in foreign languages, those printed over 20 years, certain catalogs, bibles, tourist literature, and those books and pamphlets brought in by persons emigrating to this country are already free of duty. All manuscripts and newspapers and most periodicals, too, are already exempted from duty. In addition, maps, atlases, charts, certain drawings and plans, and music printed over 20 years free of duty under the existing provisions of the tariff schedules. Such articles as charts, engravings, lithographs, and music when imported for the use of a public institution, or a scientific or educational institution, by law are also entitled to free entry. In section 3 of the bill, provision would be made for removing the existing duties on such of the books, pamphlets, periodicals, music, maps, atlases, charts and other printed matter as are not already duty free (see items 270.35, 270.40, 270.45, 270.50, 270.60, 273.15, 273.20, 273.40, and 737.52). The only exception is that duties would be retained on "printed catalogs relating chiefly to offers for the sale of United States products" which catalogs are not covered by the Agreement. Where appropriate, new items would be added or amendments to the existing items of TSUS are proposed. Various free provisions would be consolidated where no purpose would be served by retaining the existing separate categories. The bill would broaden slightly the present provision for free entry of tourist literature (item 270.70) to include publications containing information as to "educational opportunities" outside the United States. Insofar as the proposed retention of the duty on catalogs is concerned (see section 3 (a) (1) (ii) of H.R. 8664 and items 270.45 and 270.50 of TSUS), it appears anomalous to classify catalogs according to their authorship. Moreover, it appears highly unlikely that catalogs of the kind in question would be authored by foreign citizens. Under the circumstances, it is suggested that the proposed provisions for catalogs be amended to read as follows: 270.47 Printed catalogs relating chiefly to current of fers for the sale of United States products--- 7% ad val. 25% ad val. With respect to books, pamphlets, periodicals, music, maps, atlases, and charts, table 3 of Appendix 2 shows United States production, imports for consumption, exports, and apparent consumption for specified years 1958-65. It will be observed from this table that imports of such articles, which include both dutiable and free goods, are less than exports and represent only a small portion of apparent consumption. It is believed that the duties on these articles have little protective incidence and do not significantly affect importation. The removal of the duties as proposed therefore is not likely in and of itself to have any substantial effect on trade. Section 4. Works of art; antiques Annex B of the Agreement is entitled "Works of Art and Collectors' Pieces of an Educational, Scientific or Cultural Character". Of the articles listed thereunder, the United States already accords free entry to most of such merchandise. The principal exception thereto is that this country does assess duties under item 765.07 of TSUS on copies (not originals) of "Paintings, pastels, drawings, and sketches. executed wholly by hand" at the rates of 8 percent ad valorem (col. 1) and 25 percent ad valorem (col. 2). Section 4(a) of the bill proposes that all such articles would be free of duty under a new provision in TSUS which would combine the originals and copies under the same classification description. Imports of the originals and copies during 1964 and 1965 were as follows: Total imports of such originals (item 765.05) in 1964 and 1965, respectively, were approximately 56 million dollars and 79 million dollars; imports of copies (item 765.07) for the same two years were approximately 1 million dollars for each year. It is not anticipated that the removal of the duties on the copies would materially increase imports of copies. In many instances the fact that the works are copies has a considerable influence as to their dollar value and an 8 percent rate of duty thereon is not particularly a deterrent to the importation of such articles. Section 4 (b) of the bill proposes that the article description preceding item 766.20 of TSUS be amended so that antiques would be free of duty if made prior to 100 years before their date of entry. Under item 766.25 articles are presently free of duty as antiques if they are rugs and carpets made prior to the year 1701; violins, violas, violoncellos, and double basses of all sizes, made prior to the year 1801; ethnographic objects in aboriginal styles made at least 50 years prior to the date of entry; or other articles made prior to the year 1830. Where such imports have been repaired with a substantial amount of additional material within 3 years prior to importation, under item 766.20 a duty is imposed upon the value of the repairs. Even with the fixed dates of the present law, customs officers have considerable difficulty in ascertaining the age of articles claimed to be antiques. This is particularly true since such methods as laboratory analysis to establish age may often be injurious to the article itself and would considerably reduce the value of the article if not completely destroy its value as an antique. Whereas handcraft work has been an ear-mark of many of the articles made before 1831, the industrial revolution thereafter brought about great changes in method of production and attendant increases in the volume of production. For those articles made after 1830, under the bill as proposed, the individual handcraftsmanship of articles would no longer be a clue as to their age. The opportunities for fakers and indiscriminate persons to profit by the change in the law would seemingly be considerably enhanced. Another difficulty with respect to the proposed provision is that it would have a "sliding" date for determining antiquity. The requirement of the bill would be that the article be 100 years old prior to the date of entry. What is not an antique today might become an antique tomorrow. It is understood that some of the administrative agencies are presently in favor of having articles which are 100 years old as of a particular date be free of duty-the date would thereafter be changed in 10-year, or other stages. Although this would be a considerable improvement over the present proposal, it still does not get to the heart of the problem. Various bills such as S. 1051, 89th Congress, and H.R. 2330, 88th Congress, have been introduced in recent Congresses to amend the tariff provision on antiques to establish a 100-year age requirement in lieu of the fixed cut-off dates in the present law. The problems inherent in such a requirement are believed to be responsible in large part for these bills dying without enactment. |