Freer Trade Winds

U.S. business responded to the President's tariff reduction program surprisingly favorably.

Understandably eager for freer trade are the executives of the many U.S. industries already selling successfully overseas. But less predictably, freer trade has the endorsement, according to soundings taken by TIME correspondents, of many businessmen whose companies are currently suffering from import competition but who are confident they can counterattack effectively if foreign tariff barriers are dropped. Among the generally pro-free trade industries:

sbAUTOS. Says American Motors Corp.'s William S. Pickett, executive vice presi dent of A.M.C. Export: "If some indus tries can't make a go of it, why in hell don't they get out of business? With fewer restrictions, trade in general would be more competitive, and it would no longer be necessary to spend millions to set up foreign subsidiaries." sbSTEEL. "Our industry has survived com petitive situations before," says one big steel executive. "Although this is a tough predicament, we can do it again by pro viding better quality, better service, bet ter technology." sbOIL. "It is not wage costs between the U.S. and Europe that should be com pared," says Cecil Morgan, Standard Oil of New Jersey's chief of government rela tions, "but unit costs of production; and if you do that you'll see that there isn't much difference." sbPULP & PAPER. "We want freer trade with Europe, not tariff protection at home," says Crown Zellerbach Chairman J. D. Zellerbach. "The only way the U.S.

can hope to hold its export markets is by associating itself with the Common Mar ket movement." With Two Voices. The answer was more mixed in industries that anticipate mixed effects from lower tariffs. Examples: sbELECTRONICS. Parts manufacturers, such as Texas Instruments, faced with heavy Japanese competition, tend to be for pro tection. But Motorola, which does hand somely by using Japanese transistors and other components in some of its radio and TV sets, is all for freeing trade. Says Motorola President Robert Galvin: "In the final analysis, the U.S. industrialist will be far more interested in a potential world market of 2 billion customers than in a domestic market of 180 million." sbMACHINE TOOLS. Manufacturers who produce only standard tools are pinched by foreign imports, and dread increased competition. Makers of special equipment, such as Warner & Swasey Co. (automated turret lathes), are not only unhurt but doing a big export business. "Now that European wage rates are going up and they're running out of skilled workers, our high-production machines are becoming important to them," says Warner & Swasey Executive Vice President James C. Hodge.

The Naysayers. Businessmen who flatly oppose the whole idea of freer trade may be a minority, but get heard. Notable among them is Colonel Willard F. Rock well, chairman of Pittsburgh's Rockwell Manufacturing Co. and Rockwell-Stand ard Corp. (pumps, valves, automotive parts and Aero Commander planes). Says he: "With high U.S. wages and raw-material costs, high taxes and low depreciation write-offs, I don't know of a single U.S. product that could compete with European industry." The nearest thing to unanimous opposition to the Kennedy program was heard among businessmen in the South -- partly because much of the South's burgeoning new industry moved there to escape high wage costs elsewhere and fears that lower tariffs will offset any gains they made by moving.

Predictably enough, most opponents of freer trade speak for industries already suffering from imports. Examples:

sbGLASS. With imported sheet glass taking 32.5% of 1960 sales (v. 15.4% m 1955), Vice President Robinson F. Barker of Pittsburgh Plate Glass Co. says: "We see no real hope of sharing any growth in the U.S. market unless effective tariff re lief is granted."

sbTEXTILES. "If imports keep increasing as they have [7.2% of the U.S. market in 1960, up 300% from 1958], all U.S. textiles would be replaced by 1970," dourly predicts President William F. Sullivan of the Northern Textile Association.

sbCHEMICALS. "We should not abandon our present selective approach to a reduction of tariffs," argues President Kenneth Klip-stein of American Cyanamid. The point: the chemical industry, which is among the most highly protected U.S. businesses, wants no lowering of tariffs on the key organic chemicals that are the base for myriad highly profitable end products ranging from pharmaceuticals to plastics.

The Strings. But for all the militancy of such protests, U.S. business in general has clearly undergone a historic change of heart since World War II. Most U.S. businessmen now see more opportunity than danger in freer trade. Even in industries clamoring for protection, a concern for the U.S. world position produces some moderating voices. Says Chairman Spencer Love of Burlington Industries, the nation's largest textile producer: "If we get into a tariff reduction program and it doesn't work out, that will be the time to do something about it."

Even the most enthusiastic supporters of free trade have reservations: they want some form of relief for industries and employees who may be hurt. They want the same treatment foreign firms enjoy in depreciation write-offs and want to be certain, too, that U.S. negotiators win trade agreements that open world markets to U.S. industry on equal terms. "The other countries don't observe the rules as rigidly as we do," warns one executive. "They always have a few little gimmicks--such as tax rebates to exporters--to give themselves an extra edge." In the broad generalities of his State of the Union mes sage, Kennedy seemed to take most of these reservations into account. But it will be the dollars-and-cents specifics of the President's program that determines how much U.S. business is confirmed in its growing allegiance to free trade.

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