bution of materials to which it relates on grounds of national security, public order, or public morals and that it shall not affect laws and regulations relating to copyright, trademarks, or patents. Since it is a provision of the agreement that contracting parties shall retain these rights, the bill does not address itself to these matters.

Most of the articles for which duty-free treatment is provided in the agreement (1) are now, under existing law, duty free or (2) are now subject to column 1 rates of considerably less than 10 percent ad valorem or (3) under the bill would become duty free only when imported by specified educational, scientific, or cultural institutions. Moreover, in the case of scientific instruments, they would be duty free only if no instrument or equivalent scientific value is being manufactured in the United States. It is estimated that imports in 1965 of articles which are to be made duty free amounted to roughly $39 milion, with revenue to the Treasury of about $1.75 million. We believe that passage of the bill will not result in any significant increase in the level of imports.

Consequently, we believe there is little reason to anticipate that the implementation of the agreement would result in serious injury to any domestic industries, firms, or workers. However, in the negotiation of the agreement in 1950, the United States obtained a protocol, annexed to the agreement to permit us to ratify the agreement wih a reservation. This reservation would give us the right to suspend, in whole or in part, any obligations under this agreement if any of the materials covered by it should be imported in such increased quantities and under such conditions as to cause or threaten serious injury to domestic producers of like or competing products. In requesting advice and consent to ratification, in 1960, it was stated that ratification would be subject to such a reservation.

Section 11 of the bill implements this reservation. It specifies that provisions of title III of the Trade Expansion Act of 1962 are applicable to the articles for which duty-free treatment is provided in the bill in the same way as if such duty-free treatment were a concession granted under a trade agreement. Accordingly, tariff adjustments as well as adjustment assistance will be available.

In view of the minimal impact on trade, already referred to, we do not expect that this bill will have any significant adverse effect on the U.S. balance of payments.

In letters of June 1, 1965, to the Vice President and the Speaker of the House of Representatives, the President stated: "The purpose of the agreement is to promote the growth of international understanding by reducing trade barriers to the flow of knowledge in all directions across all frontiers." He expressed the view that enactment of implementing legislation "would be of very material benefit to our schools and universities, science laboratories, and research foundations," and to certain other organizations, and asked the Congress to approve such legislation "promptly."

On November 8, 1965, the President issued a statement pointing out the need for passage of the bill in the interest of "economy of effort." He had just signed 14 individual bills providing free entry for specific scientific instruments imported for use in universities throughout the country. He indicated that had the implementing legislation for the Florence agreement been enacted these separate bills would have been unnecessary.

More recently, in his message to Congress urging passage of the International Education and Health Acts of 1966, the President stated:

I recommend prompt passage of legislation to implement the Florence Agreement and thus stimulate the movement of books and other educational material between nations. This agreement was signed by representatives of the U.S. Government in 1959 and ratified by the Senate in 1960. The necessary Congressional action is long overdue to eliminate duties and remove barriers for the importation of educational materials.

The United States has traditionally adhered to the policy of encouraging the international exchange of educational, scientific, and cultural materials as a means of increasing understanding between nations, of assisting developing countries, and of establishing a more enduring basis for international peace. With the increasing emphasis that is given by this administration to educational and scientific cooperation across the borders, the importance of implementing legislation to enact the Florence agreement is all the greater.

In the United States and in the world as a whole, there is now taking place a vast expansion of the number of educational institutions and of educational opportunities. Educational and scientific aids are also increasingly complex, and moreover, scientific instruments and apparatus have become both more refined and more expensive. However, although large private foundations have been helpful, teachers, educational institutions, and research organizations here and abroad still suffer from an incapacity to obtain the instruments they need for modern education and research. The passage of implementing legislation for the Florence agreement should help reduce the costs. It should also be noted that because educational and scientific materials have become so complex there has been an increasing specialization in their manufacture and use. As a result, academic and scientific institutions in many parts of the world have become progressively interdependent. The Florence agreement is an effort to take account of this situation in a realistic fashion.

There has been a growing interest within the United States in the Florence agreement. This has been expressed over several years by associations such as the American Book Publishers Council, Inc., the American Council of Learned Societies, the American Library Association, and the Association of American Colleges. It has also been expressed by various institutions and individuals. At the recent White House Conference on International Cooperation, the Panel on Culture and Intellectual Exchange recommended to the President that the U.S. Congress be requested to implement the Florence agreement. Commenting on this report, Dr. Frank Stanton, President of the Columbia Broadcasting System, Inc., referred to the agreement as an essential part of what he described as a "cultural bill of rights," and stated:

Export taxes, import tariffs and surcharges have no place on materials whose major content and purpose are cultural and intellectual. As revenue measures, they are picayune, and as protective devices they are self-defeating, harassing the very activities they theoretically protect. Again, as in copyright, we lag behind by not implementing the Florence Agreement that takes a considerable step forward in this area.

The administration considers it very important that the bill be passed as soon as possible. The United States has repeatedly expressed itself as favoring the improvement of international understanding

through the freer exchange of ideas. Our failure to implement the Florence Agreement would be inconsistent with this ideal.

I should be glad to answer any questions from the committee regarding the proposed implementing legislation.. Since many of the questions are of a technical nature, I have asked Mr. James F. Collins, Assistant Secretary for Domestic and International Business, Department of Commerce; Mr. Joseph A. Greenwald, Deputy Assistant Secretary for Economic Affairs, Department of State; Mr. Shelton B. Granger, Deputy Assistant Secretary for International Affairs, Department of Health, Education, and Welfare; and Mr. Edward I. Kilpatrick, Director of the Division of Tariff Classification Rulings, Bureau of Customs, to assist me in answering questions. Technical experts from various interested agencies are also available.

Mr. KING. Thank you, Dr. Frankel.

Without objection, Mr. Collins, you may proceed to make your statement, then the committee can question all those at the witness

table.

STATEMENT OF HON. JAMES F. COLLINS, DEPUTY ASSISTANT SECRETARY FOR DOMESTIC BUSINESS POLICY, DEPARTMENT OF COMMERCE

Mr. COLLINS. Thank you, Mr. Chairman.

Mr. Chairman, this Department appreciates the opportunity to present its views on H.R. 8664 a bill to implement the Agreement on the Importation of Educational, Scientific, and Cultural Materials, commonly referred to as the Florence Agreement.

The purpose of the agreement is to foster mutual understanding among countries by reducing trade barriers that otherwise inhibit the flow of knowledge. The agreement provides that specified articles of a cultural, scientific, or educational nature shall be subject to duty-freetreatment among the signatory countries. H.R. 8664 would implement the agreement by amending the relevant provisions of the Tariff Schedules of the United States.

Many books, works of art, scientific specimens and other educational, cultural, and scientific materials which the agreement proposes to make duty-free are already free of duty in the tariff schedules. Most of the other articles entering the United States are subject to low. rates of duty. The granting of reciprocal duty-free treatment by other signatory countries would in turn benefit U.S. exports.

BOOKS AND OTHER PRINTED MATERIAL

In terms of commercial significance, the provisions of the legislation that would grant duty-free treatment to books and other printed matter are among the most important. The book publishing industry has for several years supported and urged the enactment of the Florence Agreement implementing legislation. The particular associations that have made their views known on this matter include the American Book Publishers Council, Association of American Colleges,. American Textbook Publishers Institute, American Libraries Association, American Council of Learned Societies, and American Council on Education.

Total imports of books and printed matter affected by the provisions of H.R. 8664 amounted to over $58 million in 1965. Of this amount, approximately $19 million were free of duty. Other printed materials are generally subject to duties ranging up to 7.5 percent. While imports are relatively small, the industry has been quite successful in the exportation of U.S. books and other printed material. Total exports by U.S. printing and publishing industries in 1965 reached $226 million. Consequently, both the publishing and printing segments of the industry should experience a net benefit from the enactment of this legislation.

SCIENTIFIC INSTRUMENTS AND APPARATUS

Of particular interest to this Department, article I, annex D of the Florence Agreement provides that duty-free treatment shall be granted to scientific instruments or apparatus, intended exclusively for educational purposes or pure scientific research, provided that such instruments or apparatus are consigned to public or private scientific or educational institutions and provided further that instruments or apparatus of equivalent scientific value are not being manufactured in the country of importation.

Section 6 of H.R. 8664 would implement the agreement by amending the tariff schedules of the United States to establish procedures under which certain instruments and apparatus could be imported free of duty by qualified institutions established for educational or scientific purposes upon a determination by the Secretary of Commerce that no instrument or apparatus of equivalent scientific value is being manufactured in the United States.

Implementation of the agreement will benefit the domestic scientific instrument industry. The industry is generally recognized as being able to produce instruments and apparatus of the highest quality, and involving the latest scientific developments. It is not possible to com-. pare exactly domestic shipments of scientific instruments with exports and imports due to differences in product classification. However, imports are relatively small, amounting to $20.7 million in 1965 and constituting less than 6 percent of apparent domestic consumption. Imports are generally concentrated in lower priced, less sophisticated instruments. Exports of U.S.-made instruments are continuing to.. increase. Last year the U.S. industry exported close to $81 million of its products. Thus, the relative magnitude of these statistics indicates that the industry has a large stake in export markets and would benefit from the implementation of the Florence Agreement.

The Department of Commerce welcomes the opportunity to make systematic the treatment of applications for duty-free entry of scientific instruments and apparatus for educational and scientific institutions. In recent years this Department has reported to Congress on an increasing number of private relief bills introduced each year to provide duty-free treatment for scientific instruments, such as mass spectrometers, entered for the use of educational institutions. In commenting on these bills, the Department has attempted to apply the spirit of the Florence agreement with respect to determining whether a domestic instrument was available of equivalent scientific value to that being imported. These bills have been examined by analysts in the domestic and international business areas and, to the extent pos

sible, domestic manufacturers have been contacted as to their interests. Each case has also been reviewed by the appropriate scientists in the National Bureau of Standards.

The enactment of H.R. 8664 will enable the Department to formalize these procedures in reviewing each case. Notification in the Federal Register as required by section 6(c) will afford all interested parties the opportunity to present their views. Such notice will also serve to inform both the domestic industry and qualified institution of the instruments and apparatus being considered for duty-free treatment, and the final determinations of the Secretary of Commerce, together with the reasoning therefor.

Consistent with the provisions of the Florence agreement, section 6(c) provides two broad tests for the duty-free entry of scientific instruments or apparatus: (1) the qualification of the institution seeking the duty-free treatment and (2) the determination of whether an instrument or apparatus of equivalent scientific value to that being imported is being manufactured in the United States. In meeting these two tests, it will be necessary for the applicant to provide information necessary for the Secretaries of Treasury and Commerce to fulfill their responsibilities under the legislation by insuring that the conditions of section 6(c) are met.

The Secretary of Commerce is responsible for the administration of the second test embodied in section 6(c), the determination of scientific equivalency. In order to assist the Secretary in expediting his determination, it is expected that an application for duty-free treatment by a qualified institution will contain pertinent information relating to the second test. It will be necessary for the institution to identify the specific instruments or apparatus desired to be entered free of duty and the purpose for which the instrument or apparatus is being acquired. It will also be necessary for the applicant to indicate why the instrument or apparatus desired to be imported is not available domestically and, in particular, to identify the unique features of the foreign product which are not available in instruments or apparatus of domestic origin.

With regard to other information that might be required of the applicant, section 9 of H.R. 8664 provides for administrative cooperation, and it is anticipated that the Departments of Treasury and Commerce will issue joint regulations for carrying out the responsibilities of the two Departments under section 6(c).

This Department believes that section 6 of H.R. 8664 balances the needs of the scientific community for freer access to foreign scientific instruments and apparatus not available in this country with the need to insure that the duty-free privilege will not adversely affect the commercial interest of domestic manufacturers of scientific instruments or discourage the development and adaptation of new technology.

The Department of Commerce urges the early enactment of H.R. 8664.

Thank you, Mr. Chairman.

Mr. KING. Does that complete your statement ?

Mr. COLLINS. Yes, sir.

Mr. KING. Thank you very much.

Are there questions?

Mr. BURKE. Mr. Chairman.