Weekly television digest (Jan-Dec 1963)

8-TELEVISION DIGEST SEPTEMBER 30, 1963 to increase rates on electronic products. (2) Through office of Christian A. Herter, President Kennedy's special representative for trade negotiations, seek more advantageous negotiations of reciprocal agreements via GATT— General Agreement on Tariffs & Trade. (3) Ask Customs Bureau to invoke Anti-Dumping Act in certain electronics product classifications. (4) Ask Congress to tighten AntiDumping Act. Need for intensified EIA action at this time, Sprague told us, is dictated by "dramatic increase in imports" over past several years and threat of more to come. Spiraling import rate was detailed by Sprague in Aug. 15 letter to Herter. U. S. imports showed 11. 1 million radios in 1962— nearly double 1960's 6.5 million. TV sets— 263, 000 units in 11 months from mid1962, and, Spragueemphasized, "current imports [are] about 10 times 1961 level." Radio tubes— 51.9 million in 1962 from 27. 6 million in 1960, or "an increase of 90% in 2 years." Sprague also gave Herter these facts on 1962-VS.-1961 Japanese exports to U. S. ; TV sets, "almost a 6-fold increase in one year" to 158,591 in 1962 from 23, 151 in 1961. Capacitors— up more than 100% to 70 million from 34 million. Transistors—up almost 100% to 11 million from 5.7 million. Component parts for electronic products— "an increase of almost 900% to $11. 2 million value in 1962 from $128,000 value in 1961. Emphasizing that parts manufacturers "suffer double impact" from imports— by direct competition from imported parts and from loss of domestic business through imports of TVs, radios, other end products— Sprague informed Herter that worse is yet to come: "We believe that a major assult on the domestic market for parts by foreign producers is in prospect. We have information from Tokyo outlining Japan's 5-year plan for the production of electronic apparatus. It is significant to us that the projected production of electronic components in general is set at a 213% increase by 1967. This is almost double the 1967 target figure for consumer type end products." EIA is seeking to have electronic components deleted from Schedule 6, part 5, "Electrical Machinery and Equipment" category of Tariff Schedules of the U. S. (1963) for purpose of separate consideration as entity by Tariff Commission. "To lump electronic products," Sprague wrote Herter, with "array of other articles for the purpose of determining whether the entire classification, as an entity, should be considered for future tariff reduction, is to disregard the separate and distinct competitive situation of electronic products. Electronic capacitors, resistors, tubes and semiconductors, several of which may be held in the palm of the hand, and selling for a few cents to a few dollars each, cannot be considered, for trade agreement purposes, on the same basis as an electric generator selling for several million dollars." There's another important reason, Sprague told us, why electronic components merit special tariff protection. "If the commercial and industrial areas of our industry are adversely affected by imports, there will certainly follow an adverse effect on our research, development and production capabilities in the field of military components." Trade Expansion Act, Sprague told us, "introduced a new policy for this country —that an industry is expendable in the national interest. I question that it is reasonable for a nation to aUow an industry ♦ to be sacrificed simply because a foreign country decides to specialize and allocates resources. There should be some protection— and there isn't in the Trade Expansion Act. Here are capsules of other import subjects covered in our conversation with Sprague: (1) Dumping problem. "We're the only industrial country that doesn't have an adequate antidumping law. We have to prove 2 things— that the product sells for less here than it does domestically, and that it does catastrophic damage. That 2nd point is difficult to prove. Just across the border, in Canada, they only have to prove that the product, in the same quantity and of the same quality, sells for less than in the country of origin." (2) Balance of trade. "Balance of electronics trade is currently about 3 to 1 in our favor— but that's a misleading picture because the balance is favorable only in military electronics and in some industrial areas. If our military aid program should cease, that favorable balance would cease overnight. " (3) Affiliation deals with Japanese firms. "This is strictly a defensive measure. CXir companies certainly would prefer to make the products at home. Sprague Electric also has plants abroad, but they're there to serve those areas, and the way the economy is booming in those areas, those