Tide v. Undertow

Ever since he first set foot on U.S. political soil, President Eisenhower has spoken firmly in favor of lowering the barriers of world trade. Last January the President said: "It is essential for the security of the U.S. and the rest of the free world that the U.S. take the leadership in promoting the achievement of high levels of trade." Only because of the outspoken White House advocacy did the 84th Congress, reluctantly and by the narrowest of margins, pass a liberalized foreign-trade bill this year.

Very little has been done since then to implement world trade's congressional victory. A recent series of Administration actions gives evidence that the traditional undertow of protectionism is still stronger than the tide of free trade. Items:

P: The Administration upped the tariff on Swiss watches.

P: The tariff on imported bicycles was raised.

P: The U.S. Defense Department rejected a British low bid to supply generators and transformers for the Army-engineered Chief Joseph Damon the Columbia River in Washington state.

Last week, from the British Foreign Ministry to the U.S. State Department, came a note of protest against the U.S. refusal to accept the bid by the English Electric Co. Ltd. on six generators and three transformers for the Chief Joseph project. The company spent some $60,000 to prepare its bid. It was the lowest received and it met specifications. Under ordinary circumstances, Defense Secretary Charles Wilson would have been required to accept the British bid. English Electric's offer was 16% ($964,000) below that of the lowest U.S. bidder, and U.S. purchasing officers must generally award contracts to foreign firms that underbid U.S. companies by at least 6%.

But Wilson gave the Westinghouse Electric Corp. and the Pennsylvania Transformer Co. the $7,000,000 contract, even though he had to strain to do so. He took advantage of a regulation that permits him to set aside all foreign bids in order to give business to any U.S. company located in a city where unemployment exceeds 6%. Pittsburgh, site of the plants that will make the Chief Joseph equipment, has a 6.1% labor surplus--just one-tenth of 1% over the line.

In the decision to raise tariffs on bicycles, the President paid tribute to the skill of foreign manufacturers, mostly British, who make lightweight bicycles that outperform heavier U.S. varieties. If U.S. bicyclemakers would follow the foreign example, said the President, U.S. industry would benefit. Nevertheless, he penalized the foreign manufacturers with a 50% tariff increase.

The late Senator Robert Taft's brother, Charles P. Taft, president of the Committee for a National Trade Policy, characterized this recent record on trade policy. Said he: "The President's general position is sound and beyond doubt sincere, but nobody at the top of the Administration stands up and fights."

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