• HATIONAL BANK FOR RECONSTRUCTION AND DEVELOP o 66874 OUTLOOK FOR U. S. IMPORTS IN 1949 and 1950 Economic Department Date: April 13, 1949 Prepared by: Vittorio Marrama OUTLOOK FOR U.S. IMPOBTS IN 1949 and 1920 • I Table of Contents Page No. I Summary and Conolu§io~s ••••••••••••••••••••••••••••••••• ~ Introduction ••• 'It • • • • • • • • ~ • • • • • • • • • • • Ii • • • • • • • . • • , •••• • • • • • 1 Summ~rY Qf SSotion I •••••••••••••••••••••••••••••••••••• 14 Section I Coffee, cocoa and tea '" ••• ;.; ••••••••••• ; ••• ~. 16 o, • • • • • • • Paper and manufactures •••••••••••••••••••••••••••••• 20 Paper base stocks ••••••• , ••••••••••••••••••••••••••• 22 Fruits and nuts ••••••••••••••••••••••••••••••••••••• 25 Jute and manufaotures •••••••••••••••••••••••••••• ~~. 29 Furs and manufactures •• ~ ••••••••••• ~ •••••••••••••••• 33 Semi.manufactured wood ••••••••••••••• , •••••••••••••• 36 Tobacco and manufactures ••••• ~ •••••••••••••••••••••• 39 Hides and skins •••••• ~~.~~.~~ ••• ~ ••••••••••• ~ ••••••• 41 Fish and products ••••••••••••••••••••••••• ~ •• ~ •• : •• ~ 44 Vegetables and preparations •• ~ •••••••••••• ~ ••••••••• 47 Fertilizers and fertilizer materials ••••••••••••••• , 50 Silk and manufactures ••••••••••••••••• ~ •••• ~.~ ••••• ~ 53 ••• ~ • ~ • ~ Conclusions ••••••._•••••••••••••••••••••••••• " 55 Summary of Sect±on II •••••••• 4 • • • • • • • • • • • • • • • • • • • • • • • • • • 58 Section II Non-ferrous metals and ferro-alloys ••••••••••••••••• 60 Rubber and manufactures ••••••• , ••••• ,............... 66 Oilseed$ and vegetable oils •••••••••••• ~~~ •••• ~.~... 69 Petroleum and products ••••••••••••••••• ~.~ ••• ~.~~ •• ~ 74 Precious stones ••••••• " •••••• " •.••• " •••• ~ •• ~ • ~ ~ • ~ • • • • ••• " 76 Vegetable fibres other than cotton, jute," flax, hemp and ramie •••••.•••••••••••••••• ~ ~ •••••• ~ • • • • • • 79 Nav~.lstores, gums and resins ••••••••••••• ~ ••••••••• 81 Conclusions •••••••••••••••••••••••••••••• ~.~~~~ •••• ~ 83 S:qmmary of Section III •••••••••••••••••••••••••••••••••• 85 Section III Sugar and related products •••••••••••••••••••••• " •••• 88 Unmanufactured yool ••••••••••••••••••••••••••••••••• 91 Beverage~ ••••••••••••••••••••••••••••••••••• ~.~.,. ••• 94 Unmanufactured cotton ••• ~ •••••••••• , ................ . 0/7 Clocks and yatches ~ ~ O' • • •" •• • • • • • • • • • • • • • • • • • • • • • • ". '• • • 101 Leather manufactures" .............................. '•••• 102 1,7001 manufaotures ••••••••••••••••••••••••••••• : •••••• 105 Cotton manufactures" ••••••••• ~ ................... " ••••• 108 Flax, hemp and ramie Iilamifactures ••••••••••••••••••• III 11eat products ••• ~ ••••••••••••••••••••••••'•.•,••••• '•••• 113 Conclusions •• " •••••••••••• , •••••••• ~ ••••• '••••, ., ••••••, 116 ii Tabl~ of Contents Page No. "2ummar;y of Section I1l ...... • -<1....... ................... ........... 119 s~ction IV Other i;mports ••• " ..................... " .......... '........... AI • . • 120 Summari[ of Section '! ................. o'." .. .; ••• "... ".•••• '... O'. . 129 Section V General conclusions " • .; .•.•••••• fi . . . . . . . . ti . . . . . . . . . " • • • • • •• 130 ~: This study was., for the most part, completed by Christmas, 1948, but checking of certain figures has delayed its release until now. i OUTLOOK FOR U. S. Il.'IPORTS IN 1949 "J\]ID 1950 summ~ and Conclusions 1. U. 5.. general imports amounted in 1947 to:.5·, 739 million compared to eA'Ports valued at:14,456 million. The e~~ort surplus Tras ':)8,717 million. The acute dollar shortage clee.rly stems from this dis- equilibriura in the U. S. balance of trade. The restoration of equilibrium in the U. S. balance of trade is the necessary, though not su.fficien-c, condi -Cion upon Trhich the smooth expansion of international trade in the years ahead 1'!ill de~Jend. It must be recognized, horrever, that, for this restoration to have the m.ost salutary effect e!i~,ilibrium between U. s. exports and im;,Jol'ts must be reached at a high level. It follows that the expe.nsion of U. s. imports is to be considered the keystone of any sound structure of Yforld trade in the years to come. 2. Compared Tlith the prew'ar period~ U. S. imports in 1947 vrere at a lol'v level. The ratio betYfeen imports and disposable income plus cor- porate profits after taxes and dividend paynents 'was 3.~~ against a ratiO of 5% in 1929. Assuming the latter as a rough indication of the "nol~malll ratio in a full employment year imports in 1947 should have been around ~:.9,40o million or 64% above the actual figure. The low level of U. S. imports in 1947 seems to be due primarily to the lack of sufficient supply in foreign countries • .3. The purpose of' this paper has been to attel:1pt an estimate of the probable amount of U. S. imports in 1949 and 1950 under the follovring assumptions: (a) steady increase in the availability of supply abroad; eb) a high level of prosperity in the United states in the years a..~ead; (c) no a!,p+,eclable change in prices through 1950 from those prevailing in ii the first semester of 1948; (d) unchanged U. S. import duties. Some space, horrever, has been devoted to the posDiole effects of further reductions in duties. The approach has been primarily a structur 81 one. . By this it is meant that the cmalysis relies mainly on a type of information gathered from various sources covering such relevant variables as structural changes "'ihich have occurred since 1929 and particularly during the TTar period, domestic conslunption and production of the various commodities, production in foreign countries, etc. On the basis of this analysis, often integrated uith an examination of the most recent trends of imports, single forecasts for each group and subgroup of U.S. imports have been attempted •. 4. . The analysis shmlS that the probable amount of U. S. imports may be expected to be .,7 ,L~66 million in 1949 and;8,027 million in 1950 (current prices). These results have been reached by dealing in detail Y[i th the 30 principal subgroups of U.S. imports selected according to their vclues in 1947 and 1929. .~s a 1'f1101e these subgroups covered 87 and 82 per cent of total imports in the two years, respectively... The remaining subgroups have been analyzed in the aggregate. The principal subgroups have been classified in three large groups. The first includes those commodities, such as coffee, cocoa, paper, wood, jute, furs, tobacc 0, hides and skins, etc., the imports of uhich '.'Jill depend primarily on (a) the trend of consumption in the U.S •. as opposed to the trend, if any, of domestic production, (b) the availability of supply on foreign markets. The second group includes those commodities such as non-ferrous metals and ferro-alloys, rubber J oilseeds and vegetable oils, petroleum 111 etc., the imports of which will depend upon the above,-:::cr.:ticr.cd f.:'-ctcrs plus (a) 17.S. purchases fer the national stockpile, (b) U.S. purchases for the purpose of conservation of domestic resources. The third group includes those commodities such as sugar, wool, textile manufactures, meat products, etc., the imports of which will depend upon the factors mentioned under group I plus (a) U.S. import duties, (b) the U.S. absolute-quota and tariff quota system, (c) other u.S. restrictions. 5. The following table' summarizes the partial results of our estimates, includlngthoseobtalned for the groups of oommodities not considered in det,Bil. The estimates for 1949 and 1950 are compared with the actual figures for 1947 and the annual rate for 1948 based on the trade returns for the first nine months.11 Groups lW.. 12/& 12.42 l2iQ Group I 2,360 2,821 2,973 3,141 Group ,II 1,617 1,893 2,172 2,415 Group III 995 1,145 1,259 1,346 other Imports -766 1,032 '1,062 !.122 Total S,73S 6,S9S 7,466 8,027 The estimated increase in 19;0 over 1947 for all U.S.' imports is 4010,- the absol~te increase probably being greater in Groups I and II. i7 The .d.g'1U'es for 1948 in this table as well as throughout the analysis refer to the imports forcoosumption, whereas those for 1947 and 1929 refer to general imports. The difference beti,feen t4Fl' two reprel;lents'. the movement into and out of the warehouse and is~aually negligible. General imports in 1948 (annual rate based on the trade' returns' for '. the first 9 months) amounted to ~6,9J4 million as compared to imports fOf consumption of $6,898 million. 1v The estimated global figures for 1950 show an increase of 7.5% over 1949, the latter an increase of 8.2% over 1948. 6. The largest share ·of the estimated net increase from 1947 to 1950 will probably be covered b.1 the following commodities or groups of commodities: Non-ferrous metals and ferro-alloys, mainly tin, copper, lead and zinc Crude petroleum Coffee and cocoa Hides and skins Raw wool Machinery in general Paper base stocks, mainly chemical wood pulp Undressed furs standard newsprint paper Semi-manufactured wood, mainly softwood lumber Burlap Together the subgroups in whioh these commodities are included represent about 65% of the total estimated net increase. 7. MaQY countries would benefit from the expected increase in the U.s. imports, but particularly the following~ United Kingdom and her colonial dependencies; some Latin American countries such as Venezuela, Brazil and Chile. Canada; Scandinavian countries; Netherlands Indies; India and Australia. v 8. Although the analysis has been cro~ried out on the assQmption of no further U.. S.· tariff reduction, systematic attention has been given to the probable effect of a further reduction in duties on the value of U.S. imports. It appears that furthEiJ' tariff restrictions ",·rould probably increase U.8. imports by some ~~400 million.' Tariff restrictions ;:rould be presumablY most effective in the case of such products as textile manufactures, machinery, etc. It seems that European marlcets in particular would benefit from a further reduction in U.G. duties. 9. '7hen a line is fitted to the data (actual 2.nd estimCi.tes) for the period 1947-50, it indicates an upVlard trend increasing at a diminishing rate, Trith U.S.· imports levelling off at some ;::,9 - 9.5 billion in 1952-53. However, our estimates have been, in general, rather conservative. Presumably with a real drive of foreign countries (particularly Europe) to increase their exports to the U.S. a level of ,,)10 billion could be achieved by 1952-53. )\n increase of such 343 million in 1947; those of chemical wood pulp at ~90 and ~317 million, respectively, against~~38 million in 1947jthose of sawmill products at $177 and $192 million, respectively, compared with ~121 million in 1947. The estimated increase in the import of bwlap i$ noteworthy, but it will strictly depend upon the future policy of India and Pakistan~ The figures for 1949 and 1950 run at ~~156 and ~166 million, respectively, as against ~111 million in 1947. With a greater supply abroad the expected increase in IT,S. imports of hides and skins will be large. These imports have been estimated at ~;j190 million in 1949 and ~?220 million in 1950 compared with ii$89 million in 1947. The largest per cent increases in 1950 over 1947 are expected to occur in imports of hides and skins, fertilizers, furs, semi-manufactured wood and jute. The largest absolute increases from 1947 to 1950 seem likely to occur in imports of coffee, cocoa and tea, hides and skins, paper base stocks, furs, standard newsprint paper, semi-manufactured wood and jute. These seven subgroups represent 84% of the estimated net in'!'" crease from 1947 to 1950. The largest s~re of the benefit would accrue to some Latin American countries (such as Brazil and Irgentina), Canada, Scandinavian countries, India" and some British African Colonies. Further substantial reduotions in U.S. duties might s't-imulate primarily imports. of silver cr black fox furs, tomato products and canned fish. On the whole" U.S. imports might in such cir.cumstances reach :W3,,050 million in 1949 and;;)i3,230 million in 1950, the net increase in 1950 over 1947 due to tariff reductions being ~89 million. 16. SECTION I. There are good reasons to believe that most U.S. imports in the first group (namely coffee, cocoa, paper, etc.) will increase auto~ matically in the next two years as a result of the upward trend of domestic consumption and, in some cases, of the restoration of produo- tion abroad. No problem of tariff policy arises. in this group in as muoh as most of the commodities enter the United States duty-free or at very low duties. Only in a few cases are the U.S. import duties signifi- cant. The tariff regime will be mentioned for each commodity or small group of commodities: where it is relevant, a brief analysis will be devoted to the effects of a tariff reduction. Coffee. Cocoa and Te~. U.S. imports of coffee, cocoa and tea amounted to ~782.3 million in 1947, coffee being the principal single commodity imported into the United States, (~~600 million or 1/10 of the total of U.S. imports). The following table indicates the imports of this subgroup in 1947 as com- pared to 1929. ~~._-12~ ____ ~___ ~~~1~92~2~~~~--. gommodities Millio:., Pot:nds M5U :i.on $ 1-1i1lion Pov.nds M;llion $ Coffee 2,500 600 1,482 302 Cocoa y 608 155 515 51 Tea 67 27 89 26 Total 782 379 !I Includes also prepared cocoa and chocolate, whioh are negligible items. In quantitative terms imports of coffee and cocoa were in 1947 at levels 68% and 18% higher, respectively, than tLose of 1929, but im- ports of tea were at a lower level. 17. The international situation of the three markets seems to be at , present as follows: enough supply in the case of ooffee and tea (black tea), shortage of supply in the case of cocoa. It follows that U.S. imports will depend in the first two cases upon the trend of domestic consumption.. in the last case also on the restoration of production abroad and/or the diversion of some exports from other markets toward the qn~ted States~ The U,S# per capita consunption of coffee (duty-free) showed in the past a steady increase from 12 pounds in 1929 to 19,1 pounds in 1946, dr~pping thereafter to 17.8 pounds in 1947. This drop, however, does not seem to indicate a turning point in the upward trend of per 2~pi~l con- sumption. It is therefore reasonable to assume that the u.s. per capita oonsumption of coffee will remain at the current level and perhaps in- crease to some 17 .. 50 pounds in 1949 and 1950. This slight increase, together with the normal rise of U.S. population'and an uno hanged Volume of stocks, would give some 2,566 million pounds imported in 1949 and 2,588 million peunds in 1950. Such figures compare, however, with an annual r~te of 2;834 million pounds for 1948 (based o~ the trade returns tor the first six mOnths) and an annual rate for the first six mo~ths of 1947 of 2,471 million pounds (which is very close to the actual figure for 1947). T~ least that can be said about the previous estimates for 1949 and 1950 ls; therefore, that they are rather conservative and may be safely rounded to Z,600 million pounds for 1949 and 2,6$0 pounds for 1950. At current prices (25 cents per pound) U.S. imports of coffee, which come almost entirely from Brazil and other Latin American coun... tries, would be worth ~650 million in 1949 and 1~ million in 1950. Turning to cocoa (duty-free), the U.S. per capita consumption seems to have been stationary since the early thirties at around. 4 pounds. However, there are reasons to believe that the per capita consumption would be, at present levels of income, higher, if the foreign supply were adequate. Now it is difficult to say whether or not the supply will be able to meet the U.S. demand in the next two years. An increase in production seems possible in the producing areas of Latin America (such as Brazil, Dominican ~epublic, Ecuador, etc.) but it will take time, whereas an increase in production in the British African Colonies (Gold Coast and Nigeria) is for the time being to be excluded owing to the depletion of soil fertility and the virus disease attacking the cocoa tree (partioularly serious in the Gold Coast) which have caused cocoa output of these territories to decline since 1937.11 However, an increase in U.S. imports of cocoa trom the Gold Coast and Nigeria·may occur as a result of some diversion of the exports of those territories (mainly the Gold Coast) from the United Kingdom to the United states, which seems to be the actual case. On the whole it appears probable that U.S. imports of cocoa will not increase much above the 1947 level in 1949 and 1950. A safe estimate for 1949 and 1950 would be some 620 and 630 million pounds, respectively, valued at;)2l7 and ;w220 million (current price of 35 cents per pound). In the case of ~ (duty-free) U.S. imports will depend, as in the case of coffee, on th~ trend of domestic consumption, which is very difficult to determine. The domestic per capita consumption in the 11 The imports of cocoa from Latin American countries and the British African Colonies represented in 1947 more than 90 per cent of the total U.S. imports. 19. last few years before the war showed a downward trend. At present it runs at 0.54 pounds compared with 0,57 pounds in 1947. Whether or not this downward trend will continue is difficult to say. With a restor- ation of production in China and Japan (produoers of green tea.) the pE!r capit! consumption might increase, for the simple reason that less cups of tea are 'brewed from a pound of green tea than from a pnund of black tea (the type now imported, mainly from India and Ceylon). HQw- ever, it must be pointed out in tbis conneotion that green tea is a special taste. For the following estimates it is assumed that prO- duction in China and Japan will not be restored by 1950 and that the U~S. per capita consumption of black tea will amount to some 0.55 pounds both in 1949 and 1950. Taking into aoeoUnt the increase in U.S, population, and an unchanged volume of stocks, U.S. imports of tea rr~ all sources will probably amount to 80 million pounds in: 1949 and 81 million poUnds in 1950. At current prices (50 cents per pound) the estimated quantities would give $40 million in 1949 and $4l million in 1950, The following table summarizes the estimated U.S. imports of coffee, coooa and tea in 1949 and 1950 cO'mpared with 1947 {millions of The figures for 1949 and 1950 have been slightly inoreased in order to take intO' account imports of prepared oocoa an4 ohooolate~ 20. The percent increase in 1949 and 1950 above the 1947 level is largely due to the sharp increase in the price of cocoa from 1947 to 1948. Should this price drop again, the estimated global figur~ for 1949 and 1950 would be reduced. Paper and Manufagtures. , __ • 4, , u.S. imports of paper and paper manufactures consist mainly of §tandard newsprint paper (duty-free). In 1947 the imports of this ooromodi ty $I!lounted to ;i~343 million or 94 per cent of the total imports of the subgroup. Compared with 1929, imports in 1947 were, quantitative- ly, 63 per cent higher (namely 7.9 billion pounds as against 4.8 billion). Even taking into account that newsprint consumption is consider- ably affected by changes in national income and tends to move closely with the level of business activity (take for instance the clo$~ re- lationship between advertising and paper consumption), the high level of imports in 1947 would seem to preclude any substantial increase in the next two years. However, the trend of imports for the, first six months of 1947 througl1 the same period of 1948 shows a sharply in- creasing movement: the current annual rate runs at 8.4 billion pounds . as compared to an annual rate for the first semester of 1947 of 7.4 . billion. Undoubtedly this trend reveals both a further inorease in U.S. oonsumption and a reduction in U.S. production. As tar as the latter is concerned, it seems that the inorease in domestic consumption failed to provide the stj,mulus, to ~omestic newsprint produotion which was ex- pected, particularly iJ? the South: at present U.S. production runs at 1.4 billlo,n pounds as compared to 1.9 . ' . billion pounds in 1939. Current cons~ption may be estimated at some 10 billion pounds compared to 7 21. billion befere the war, but it may be reasonably estimated at some 11 billion pounds in the next two years. Supposing a Blight increase in the level of U.S. production from 1.7 to 2 billion pounds, imports ~n 1949 and 1950 may be expeoted to run at some 9 billion pounds, It remains to be seen, however, whether or not foreign supply will meet the U.S. demand. The bulk of U.S. imports of newsprint paper in the prewar period came from Canada, with considerable quantities from Finland, Newfoundland and Sweden. In 1947 some 92 per cent of U.S. im- ports came from Canada and some 5 per cent from Newfoundland. It is therefore clear.that, in the short run at least, the expansion ot U.S. imports of newsprint will largely depend on the Canadian supply. It is unknown to what extent an increase 1n Swedish supply may take place in the next two years. Now, as far as Canada is concerned, it seems from recent information that newsprint output is inoreasing in that country: it is expected that it will reach some 10 b~llion'pounds by 1951 or 1952 as compared to 8.8 billion in 1947, the net inorease being 1.2 billion. As a large part ~t the Canadian newsprint is Shipped to the U.S. (newsprint is Canada 's largest single earner of U.S. dollars), it. may be assumed that U.S. imports of newsprint paper from all sources would probably amount to 8.7 billion in ~949 and 9 billion in 1950. These figures presuppose ~lso an increased supply from Newfoundland, Sweden and Finland. At current prices (4.6 cents per pound) these quan- tities would give ~400 mUlion in 1949 and i:p414 million in 1950 com- pared wi th ~343 million in 1947 and an annual rate tor 1948 of ~p.392 million. Turning to U.S. imports of the other items ot the subgroup such as uncoated bookl wrapping paper, pulpboard in rolls tor wallboard, paper~ 22. board, etc., which are subject to various ad valorem and specifio duties, no appreciable increase is expeoted. Their value may be assumed slightly above the 1947 level, say $25 million 'both in 1949 and in 1950 as com~ pared to $20 million in 1947. The following table s~rizes the estimated U.S. imports of paper and manufactures in 1949 and 1950 as compared to 1947 (milllo~s of dollars): ~ l242 1950 Standard newsprint paper 343 400 414 Miscellaneous paper and manuf. 20 ~ ~ Total 363 42~ 4.39 Per cent increase over 1947 17% 21% Paper Base Stock§ U~S~ imports of paper base stocks include mainly the following items: ohemica1 and me,chanical wood pulp and pulpwood (all duty-free), They amounted in 1947 to ,1293 million compared with ~;;l18 million in 1929, the increase being due only partly to higher prices. The high level of national income, which implies a greater use of paper for publications of all kinds and a greater and more elaborate packaging of products, the substitution of paper for textile fiber in many different uses and the ever increasing production of rayon are re- sponsible for the increase in tr.S. imports of these products, These imports were distributed in 1947 among the various items in the following way: 19/+7 1929 Co odi Thou and Million Th usand Hill on Pulpwood cord) 1,829 30.5 1,350 14.6 Mechanical \Joodpulp (s. ton) 314 19.2 273 6.2 Chemical Wooqpulp (s.ton) 2,017 ~38.2 1,612 82.2 Other paper stock (1000 Ibs.) ,.147 2,6 718 12,3 Total 293.; 118.1 23. The present analysis will be limited to the first three items of the table, which represented, in 1947, 98 per cent of the total U.S. . imports of the subgroup. Most of the PY4pwood that is imported into the United States comes from Canada and is consumed in the Northeastern and Lake states. Imports are of principal importance in supplementing the wood supplies of these regions for the production of white pulp. With current U.S. oonsumption of pulpwood estimated at some 19 million cords, imports could amount to 2.2 million cords, on the basis of the ratio of imports to consumption existing before the war. Such an increase in imports above the 1947 level is, however, strictly dependent upon the Canadian supply. Large imports from the USSR might also be considered, but any foreoasts regarding this development are for the time being purely conjectural_ Recent reports seem to show that Canadian production of pulpwood is increasing at a fairly 13atisfactory rate. However, it must be re- membered that exports from Canada are now limited to some extent not only by the requirements of the domestic pulp and paper industry but also by government restrictions on the exports of unmanufaotured wood. As a result of these restrictions an increased shift (which had al- ready occurred in large part before the war) toward exports of pulp- wood products in the form of wood pulp or of newsprint paper is to be noted. ot course, some European sources· (such as the Scandinavian countries) could supply part of the U,S. requirements, but it is highly unlikely that those countries will be induoed to ship substantial quan- tities ~f pulpwopd to the U,S. They will prefer to ship wood pulp Qr standard newsprint paper. On these assumptions it seems reasonable to estimate that U.S. imports of pulp wood will run at some 1.9 million cords valued at $33 million, both in 1949 and 1950 (at the average current price for pulpwoods). A different picture characterizes the import trade in mechanical and chemical wood pulp, which come in large quantities from Canada, but also in substantial quantities from the Scandinavian countries (such as Sweden, Finland and l'lorway). Estimating total current consumption in the United States at some 14 million tons (as compared to 8.8 million before the war) and domestic production at 11 million tons, a further i~crease in imports from 2.3 million tons in 1947 to .3 million may be expected. This increase would prnbably come mainly from the Scandi- navian countries in the form of chemical wood pulp, but it is uncertain to what extent those countries will be in a pcDGition to increase ship- menta in the next two years, and moreover to what extent domestic pro- duction will be ~timulated by the high domestic demand. A conservative estimate points to U.S. imports of some J50,000 tons of mechanical wood pulp valued at :ili21 million both in 1949 and 1950 and some 2.2 and 2.4 million tons of chE;lmical wood pulp, re- spectively, in 1949 and 1950, valued at :;290 million and :;,.317 million (at the average current price for chemioal wood pulps)., The previous estimates are summarized in·· the following table and compared with the actual figures for 1947 (millions of dollars): l2J!l. ~ lliQ Pulpwood 30.5 .3.3 .33 Mechanical wood pulp 19.2 21 21, Chemical wood pulp 2.38.2 290 317 Other paper stocks 5,6 -1 -1 Total 29.3,5 351 .378 Per cent increase over 1947 ... 19% 28% 25. The figures for 1949 and 1950 of the imports of other paper stocks have.been obtained by applying to this item the same percent in- crease over 1947 as for the other items. The figures hav:e been rounded., FrtHts and Nut! Under this heading a great number of oornmoditie~ are inoluded. The present anal~sis will be conoerned in detail only wi th the prin- , cipal items of the subgroup, which are indioated in the following table together 'With the quantities and values of U.S. imports in 1947 and 1929. . .. . 19ft7 1929 . million million '* million million t Bananas (bunch) 60 49.6 65 36.0 Olives in brine (gallons) 7.1 14·4 6.3 4.6 P:rinoipal nuts and preparations y 183 ..f!L.Q 165 ~ Total 111.0 63.9 Percent of total imports of the subgroup 79% 74% !I Includes; chestnuts, almonds, Brazil or oream, filberts, walnuts, pistache, cashew and prepared coconut ~at. U.S~ imp<:>rts of bananas (duty-free) come almost entirely from the Central American countries. The volume in 1947 was below the 1929 level, although the increase in per capita cons~ption of all fruits in general (from 138.7 pounds in the period 1935-39 to 145.9 pounds in 1947) might have suggested a net increase in imports of bananas. The low level of imports is entirely due to the plant disease in most Central American countries, which compels producers t~ give up large areas of oultivation. It seems that the restoration of production 26. will require some time, so that an increase in U.S. imports of bananas appears at the moment highly improbable. It is assumed that imports in 1949 would amount to the same quantity as in 1947 (60 million bunches) which gives, at current prices, ~49 million. An increase of 5 million bunches is assumed in 1950, which gives a total of ':,53 million .. The imports of olives in brine (subject to specific duties J rather low on an equivalent ad valorem basis) suppli~ before the war more than 50 per cent of U.S. consumption. With the increase in national income, olives represent one of those commodities the consumption of which seems bound to increase considerably., Because of the difference in type between domestic and imported olives, the increase in domestic consumption may greatly stimulate imports. However, the actual volume of imports will depend on the ability of the supplying 2:reilS (Medi- terranean oountries) to meet the U.S~ demand.. A glance at the volume of U,S. imports ot olives in the first six months of 1948 shows that shipments to the United states are steadily inc7'6Et.:.,J,ng. It can there- fore be estimated that in 1949 and 1950 u.S. imports of olives in brine will probably average some 12 million gallons valued at ~19 million. It is very difficult to make any reliable prediction on the future U.S. imports of nuts and preparations. The number of products covered by this item, although reduoed in the present analysis to the principal commodities, is still large enough to affect any sort of generalization. Moreover most of these imports are subject to various duties which oomplicate the picture further. However in what follows a tentative estimate of U.S. imports in 1949 and 1950 will be given, distinguishing tree nuts (ohestnuts, almonds, Brazil or cream, filberts, walnuts, pistache and cashew) from prepared coconut meat, Imports ot tree nuts used to cover before the war some 40 per cent of domestic consumption: they came mainly from Mediterranean countries (chestnuts, almonds, filberts, pistache), India (cashew, China (walnuts) and Brazil (Brazil nuts). In 1947 U.S. imports of ,these tree nuts amounted to 112 million pounds valued ati>3l.4 million. With the present high level of national income in the U.S. an inorease eo~d be expeoted in the imports of tree nuts above the 1947 level~ However, it must be considered in the first place that in many cases foreign nuts compete directly with domestic nuts (this is the case for almonds, walnuts and filberts); in the seoond plaoe, that foreign nuts not pro- duoed in the United States also compete to a large extent with domestic nuts; in the third place that the War has heavily damaged the nut in- dustries of some of the major foreign suppliers (this is the case in China and some Mediterranean countries). For these reasons an increase in U.S. imports of nuts seems highly improbable. It is possible in this category to obtain an inorease in imports through a reduotion in duties (which are still fairly high although reduced somewhat at the Geneva Agreement) but in no case would the increase be at all large.li The U.S .. trade returns for the first six months of 1945 show, asa matter of fact, a reduotion instead of an inorease in imports of tree nuts in spite of the tariff concessions made at Geneva last January. On the whole it seems safe to expect imports of tree nuts in the United States in 1949 and 1950 at around the 1947 value say ::,>31 million. U.S. imports of prepared coconut meatYamounted in 1947 to 71 million pounds, valued at $15.6 million, eoming mainly from the 17 On shelled walnuts aitariff~quota ~stem of 5 million pounds is established" ~ Does not include copra" 28. Philippine Islands (duty-free). They used to cover., before the war, almost the entire U.S. consumption. Owing to the greatly increasing output of confectionery and bakery products in the U.S,. and the rather stationary domestic production of coconut meat (Puerto Rico)., a fairly markedincreaae in imports in this category may be expected from Pacific areas. A sharp increase in imports is already shown by the U!,S. trade.'returns for the first six months of 1948. A simple' ".pro--- jection of the most recent trend, even at a sharply decreasing rate, would give a.volume of imports in 1949 and 1950 of some 140 million pounds. Assuming some difficulties in increasing shipments from Pacific areas to such an extent, U.S. imports of prepared ooconut meat are estimated at 120 million pounds valued at $)0 million in 1949 and 130 million pounds valued at $32 million in 1950. The following table summarizes our estimates compared with the 1947 figures (millions of dollars): ~ .~ l22Q Bananas 49.6 49 5) Olives in brine 14.4 19 19 Principal nuts and preparations 47.0 ..2l .-2.1 Total 111.0 129 1)5 These estimates do not include, as stated at the beginning, many other types of fruits and nuts. Some 6 per cent of the total value of nuts and preparations imported into the United States in 1947 and same 30 per cent of the total value of fruits and preparations imported in 1947 have been excluded. In the case of nuts other than 't:ose considered in detail it may be safely assumed, as for the trincipal nuts, that their imports will not increase in 1949 and 1950 above the 1947 level. The 29. figures of the previous 'table may therefore be rounded to ~64 million in 1949 and $66 million in 1950, Similar procedure is not reasonable, however, in the case of fruits and preparations not considered in de-- tail, which amounted in 1947 to $27 million~ The oDly criterion to folloW in this field, apart from a detailed analY$is, is the most recent trend. Now this trend seems to be slightly increasing. Projeoting it through 1950, these imports may be estimated at $?l million in 1949 and $33 million in 1950, so that total U.S. imports of fruits and preparp ati(jns wi~lamount to ~~99 million in 1949 and $105 million in 1950. A summary table of U.S. 'imports of fruits and nuts in 1949 and 1950 as compared to 1947 appears as fellows {millions of dollars}: 124Z 12it.2 1950 Fruits and preparations 9:1-.2 99 105 Nuts and preparations Total . 49.~ l41!'O ~ 163 -- 66 171 Per cent increase over 1947 16% 21% The largest share of the estimated net increase in U,S. imports of the subgroup is covered bY' prepared coconut meat from the Pacific area (mainly the Philippine Islands). U.S. imports of jute andmsmtadiures consist mainly of burlap, unmanufactured jute and jute bags and sacks. These imports amounted in 1947 to ~128 million, or 94 per cent of the total for the subgroup, coming almost entirely from India and Pakistan. The following table indicates the quantities and values of U.S, imports of jute and manu- factures in 1947 and 1929. 30. 1929 million million millionmilliori . Commodity pounds dollars pounds dollars Burlap 552 lU.5 643 ·77.4 Urunanufactured jute 89 10.8 121. 8.1 Bags and sacks 37 6.6 32 3.2 Other jute prod\1cts ~ ~ 7 '8 gj -1&l Total 1.36.7 !I Not available for some prodl,lcts .. Burlap, which is subject to a very low speoific duty, is the· principal teXtile manufacture, in terms of both value and weight, im- ported into the U.S. About 3/4 of the supply is used in the manufacture of bags, chieny for agricultural purposes,. The remaining 1/4 enters into industrial uses, chiefly as wrapping material" although sub- stantial amounts are used in the manufacture of linoleum, hair felt, upholstered furniture and mattresses, and in automobiles as wrapping for springs, ~ining for seats and similar uses. A glance at these various and important uses of burlap in the United States indicates that the prospects for an inorease in U.S. imports o£ this oommodity are good. However, it is also to be re- membered that in the last few years (especially during the waQ,burlap has been replaoed by paper and by cotton fabrics in a great manY uses. Of course since the war burlap has regained most of its former market in bag manufactures (at the expense of cotton fabrics which are high priced) but in wrapping material the reoovery has been slower and per- haps some of the market lost to the lower cost wrapping of paper may never be regained. Assuming, besides good crops of jute in the years ahead, an Indian policy of holding down exports of unmanufactured jute and an .31. agreement between india and Pakistan so that a large part of the raw jute produced in Pakistan is shipped to the processing industries in India, U.S. imports of burlap from India may amount to some 590 million pounds in 1949 and 630 million pounds in 1950 compared with 529 million pounds in 1947. Adding imports from other areas, the previous figures may be rounded, respectively, to 600 and 640 million pounds. At current prices (26 cents per pound) these quantities would give ~il156 million in 1949 and $166 million in 1950•. The prospects for U.S. imports of unmanufaotured jute (duty-free) are conditioned by the assumptions made in the case of burlap. Imports of raw jute came entirely from India and Pakistan in 1947. Raw jute is used principally in the foundation fabrio of wool carpets, in the manu- facture of wrapping twines and in reinforcing paper. As there is no oommercial produotion of burlap in the United states, no imported jute fiber goes into burlap_ Therefore, the imports of raw jute and those of burlap are not compe.titive. However; an increase in U.S. imports of unmanufactured jute may bar an increase in imports of burlap, inas- much as Indian production of raw jute may be unable to supply both the United States and the Indian processing industry. Given the previous assumptions about U.S. imports of burlap in the next two years, it is safe to estimate U.S. imports of raw jute at some 130 million pounds in both 1949 and 1950 valued at ~O million. J/ An increase in U.S. imports is, on the other hand, not to be ex- pected in the case of 1ute bags , and sacks (subject to low duties) which p • 11 It is interesting to note that the U.,8. trade returns for' the first six months of 1948 show U.S. imports of burlap from all sources at the annual rate of 478 million pounds, as compared to 552 million in 1947, and those of raw jute at the annual rate of 220 million pounds as com· pared to 90 million pounds in 1947. The estimates ~~~ an based on a fmldamental,. although very probable, change in the policy of the governments of India and Pakistan. 32. again come almost entirely from India. Jute bags are of two types, those made of burlap and those made of sacking gunny cloth~ Burlap bags are produced domestically out of imported burlap, whereas bags mad.e of sacking are i~ported from India. They enter at P~erto Rico and Hawaii, and are used in those territories as containers for sugar. Imports supply most of the jute-bag requirements of these territories, but in oontinental U.S. imports supply a negligible part of the requirements, Now, owing to the fact that sugar produotion in Puerto Rico and Hawaii has shown little variation over a period of years and is expected to continue so, no increase in the imports of jute bags and sacks is ex-. peoted in 1949 and 1950. It is assumed that in both years U.S. imports will remain at the 1947 level, namely ~7 million in round figures. The probable amount of U.S. imports of jute and manufactures 1n 1949 and 1950 is indicated in the following summary table, which gives also the actual figures for 1947 (millions of dollars): 194? 1949 1950 Burlap 111.5 156 166 Unmanufactured jute 10.8 20 20 Bags aqd sacks 6.6 7 7 other jute produots 7.8 .JJ: ..J2. Total 136.7 194 205 Per cent increase over 1947 43% 52% The estimated figures for other jute products in 1949 and 1950 have been obtained assuming an increase in these imports proportional to the inorease in the imports of the principal jute products. The figures are rounded. The estimated increase in U.S. imports of jute and manufactures in 1949 and 1950 above the 1947 level is large. But, if the mentioned 33. changes in the policy of the governments of India and Pakistan do not materialize, U.S. imports of burlap in 1949 and 1950 would be far lower and this loss would certainly not be offset by greater imports of raw jute. Furs and l-fanufactures , U.s. imports of furs and manufactures consist almost entirely of raw furs. In 1947 they amounted to $127 million, of which ~il23.3 million were raw furs. The following table indicates the U.S. import of furs and manufactures in 1947 and 1929 (quantities and values) distinguished by large groups of commodities: 1947 1929 million million million million Commodity pieces dollars pieces dollars Undressed and dressed raw furs, except silver or black fox 40 !I 122.1 sI 38 lV 119.9 sI Silver or black fox furs 0.1 Fur manufactures --l:1 --2.:..§ Total 127.0 125.8 Does not include coney and rabbit furs, which are given in Ibs. (19 million). Does not include hare and coney and rabbit furs, which are given in pounds (2 million and 17 million pounds, respectively). Dressed furs amounted to ~1.7 million in 1947 and $11.9 million in 1929. The table shows that, on the average, the import prices of ~ fur@, except silver or black foxes, have not changed from 1929 to 1947. The table shows also that these imports, which are duty-free if un- dressed, and subject to rather high ad valorem duties if dressed, were in 1947 at the same level as in 1929. Now, as most furs are regarded 34. as a luxury and consumption usually follows the trend of national in- come and as moreover some 50 per cent of the raw furs consumed in the United S~ates are imported from abroad (principally from the USSR, Canada, South Africa, and Australia), a larger volume of imports in 1947 might have been expected. The relatively low level of imports in 1947 seems to be due to the fact that imports in 1946 amounted to,~33 million and probably some overstocking of the market has taken place. The average of the two years 1946 and 1947 gives a figure of ~177 million, an increase of 47 per cent over the 1929 level. The drop in U.S. imports of raw furs, which occurred from 1946 to 1947, must be considered therefore as a temporary phenomenon due to over-stocking of the market. The annual rate for 1948 (based on the returns for the first six months) already shows a sharp increase over 1947 (~l68 million), which may be regarded as a return to the normal in relation to current levels of national income. Projecting this movement through 1949 and 1950, imports of raw furs, primarily in the form of undressed furs, may be safely estimated at some ~;;l80 and $200 million, respectively." Such figures would represent an increase over 1929 of some 50 per cent and 67 per cent, which compare with an in- crease in the real disposable personal income in the United states in the same period of 64%. It does not seem unreasonable to assume in this field a linear relationship between the relevant magnitudes. This relationship would hold good even supposing a non~linear relation- ship between domestic consumption of raw furs and real disposable personal income (in the sense that consumption increases less than proportlona.telyto disposable income), since the increase in domestic 35. produotion of raw furs seems to fall short of the increase in con- sumption. As far as the 'foreign supply is concern~d, it appears to be in a position to meet the U.S. dsmand. Turning to imports of silver or b1ackfo~ fUrs, the low level of 1947 was probably due to the high duties (37~1/2% ad valorem) and to the absolute quota of 100,000 skiZl$ established in 1940. The quota was removed, however, in May 1947. Sinee then no increase in imports has occurred, so that there are reasons to believe that the import trade is heavily restricted by the high duties. It is likely that a substantial reduction in duties could stimulate imports, although silver or black fox furs are not now so much in style. In such cir- cumstances imports might be estimated at some ,15-20 million in 1949 and 1950. Should no reduction occur, as is assumed in the following estimates, these imports would remain more O~ less at the 1947 level, say ;;ji2 million. There is no chanoe of an increase in imports of f!tr manufactures. They are subject to rather high ad valorem duties, but even a large tariff reduction could only moderately stimUlate imports. It must be remembered that in this field changes of taste are a fundamental fac- tor in determining the whole trade: the processing of raw material will therefore remain mainly with the domestic industries which can closely follow these changes. For these reasons U.S. imports of fur manufactures are estimated at some ~4 million both in 1949 and 1950, assuming however no tariff reduction. The following table summarizes the previous estimates oompared with 1947 (millions of dollars); 36.. 1947 1949 1950 Undressed and dressed raw furs, except silver or black fox 122.1 180 200 Silver or black fox furs 1.2 2 2 Fur manufactures --l:1 --'z --1t Total 127.0 186 206 Per cent increase over 1947 46% 62% The high per cent increase over 1947 is mainly due to the fact that the imports of undressed raw furs in 1947 were at an abnormally low level. A reduction in duties on silver or black fox furs and on fur manufactures could increase the totals for 1949 and 1950 to ;~03 and $223 million, respectively. Semimanufactured'VJood and Shingles U.S. imports of semimanufactured wood or sawmill products amounted in 1947 to $121.1 million, distributed in three principal categories: 1) softwood lumber; 2) hardwood lumber; 3) shingles. In relation to 19Z9 imports of these wood products in 1947 stood as follows, in quantitative and value terms: 1947 1929 Commodity million Bd.Ft, .mil1ion $ million Bd.Ft. million $ Softwood lumber 1,090 1,41S 36,5 Hardwood lumber 214 124 6.8 Y Shingles Total 1,981 121.1 1,673 :eI -6.8 50.1 !I thousand squares y millions 37. Softwood lumber, the import of which is subject to very low duties (whether specific or ad valorem), comes almost entirely from Canada and consists primarily of spruce, fir, pine, hemlock, larch and cedar. Normally some 70 per cent of all softwood lumber consumed in the United States is used in construction_ It follows that, owing to the large accumulated demand for new construction, maintenance and re. pairs (not taking into account the vast requirements in manufacturing and other industrial uses) both consumption and domestic production of softwood lumber are at present at a high level, Production in the United states seems to average some 25 billion hoard feet compared with 20 billion before ,the war. Adding to the figure of domestic production 1,090 million board feet imported in 1947, apparent U.S., consumption is around 29 billion board feet. However, the potential level of .con- sumption, at the current national income, seems to amount tJ some 29-30 billion board feet or more. In such conditions an inQrease in domestic production and imports is to be expected in the next two years, which may be quite marked unless the pressure on producers to pursue sustained yield practices (already exerted by the governments of the United States and Canada) is further promoted. Considering the most recent movement of imports in this field (which is sharply upward) and assuming no further restrictions in Canada, U.S. imports of softwood lumber may be estimated at approximately 1.7 billion board feet in 1q49 and 1.8 billion in 1950.. At current prices (;:r?4 per thousand board feet) these quan- tities would give~126 million in 1949 and 1~133 million in 1950. The situation is different for hardwood lumber, which enters the United States under low duties. This kind of lumber includes many types of domestic hardwoods (mainly used in the manufacture of flooring and furniture), cabinet woods of foreign types (used principally for furniture, ship finish, partitions and other cabinet work), balsa (used in the manufacture of model airplanes and for life preservers) and teak (used in the oonstruotion of ships and boats). Here again domestio production is very high (it averages some 7.5 billion board feet as oompared to 3.7 billion before the war) but the demand of the market, strongly enhanced by the high level of national inoome, is still higher. A further increase in imports of all kinds of hardwood is, therefore, to be expeoted in the near future, This inorease, how- ever, will depend on supply conditions in the principal countries of origin, which are Canada (hardwoods except cabinet woods), the Philippine Islands, Mexico, and Brazil (cabinet wood lumber,) Eouador (balsa wood) and Burma, Siam and Java (teakwood). For many reasons, such as the oonservation practices in Canada and partioularly the fact that produotion has not been completely restored in the F~ East ooun- tries, the inorease in U.S. imports may take time. The most recent trade returns show, in faot, no appreciable increase in U.S. imports in this field. Assuming a slightly greater foreign supply in the near future, especially from the Far East, U.S. imports of hardwood lumber may be oonservatively estimated at some 250 million board feet in 1949 and 270 million in 1950. At current prices (~1~0 per thousand board feet) they would be valued at~:p27 million in 1949 and !ii>30 million in 1950. Turning to imports of shingles, chiefiy used for roofing but also for side-wall coverage of houses and farm structure, the situation 39 • . is similar to that described in the case of softwood and hardwood lum- ber L~ported from Canada. Again the potential increase in imports, which are duty-free, is considerable, but may be hindered by conditions of supply in Canada. Assuming enough supply in the next two years, U.S. imports may amount to some 2.5 million squares in 1949 and 3 million squares in 1950 valued, respectively, at~4 and ~~9 million (current prices). The estimated values of U.S. imports of sawmill products and shingles in 1949 and 1950 are assembled i~ the following table and com- pared with the actual figures for 1947 (millions of dollars): ill! ~ l22.Q Softwood lumber 77.4 126 133 Hardwood lumber 24.2 27 )0 Shingles _19.2 ~ ~ Total 121.1 177 192 Percent increase over 1947 46% 59% Tobacoo and Manufactyres ; The bulk of U.S. imports in this subgroup oonsists of unmanu- factured tobacco, mainly' stemmed cigar leaf and unstemmed cigarette leaf. 1947 imports amounted to 105 million pounds valued at ;~94 million. In the following table U.S. imports of tobacoo in 1947 are distinguished by broad categories and compared with imports in 1929 (quantitative and value terms): 1947 1929 million million million million Commodity pounds ;k pounds ; . $ Leaf for cigar wrapping 1.2 4.3 8.6 15.7 Cigar leaf 13.4 19.1 26.1 19.2 Cigarette leaf 85.7 65,9 31.0 18.1 Scrap and manufactures 4. 8 4. 8 4t 9 7.6 Total 70.6 60.6 40. u.s. imports of leaf for cigar wrappers (subject to specific duties which, although appreciably reduced at the Geneva Agreement, are still rather high) used to cover before the war some 20 per cent of domestic consumption, coming almost entirely from Sumatra (90 per cent of the total), The low level of imports in 1947 as compared to 1929 is mainly due to the disruption of the wrapper industry in Sumatra which occurred during the Japanese occupation~ It is expected that it will be some time before production can be restored sufficiently to provide exports of high qual~ty leaf. With the restoration of pro- . duction in Sumatra U.S, imports will probably increase appreciably, but this restoration does not appear to be possible beyond a certain extent in the short~run and, moreover, a marked increase Beems to be excluded in any case since domestic production was steadily developed during the war. For these reasons U.S. imports of leaf for cigar wrappers may be estimated at some 1.5 million pounds in 1949 and 1.8 million in 1950, valued, respectively, at $6 and $7 million (current prices, figures rounded). Some further increase in imports m~y, how- ever, occur as a result of a reduction in duties, which is not con- side red in the present estimates. As far as imports of cigar leaf (mainly imported from Cuba) and of cigarette.leaf (mainly imported from Turkey and Greece) are con- cerned, no increase in U.S. imports is expected in the next two years. In the case of cigar leaf an increase is unlikely because of the un- certain trend of consumption of cigars in the postwar period. It is true that cigar consumption is higher than before the war because of high national income, but a further increase. is improbable. The same is true of Cuban tobacco used in the cigars made in the United States. In the case of cigarette leaf, an increase in imports is again unlikely because the taste of the American consumer would not welcome a much larger proportion of Turkish tobacco than ie now customary in the m~~u- facture of cigarettes. Of course in both cases an increase in imports will occur as a consequence of the increase in the U.S~ population, but this increase is unlikely to be appreciable. Perhaps a redu~tion of duties, which, a~though lowered somewhat at Geneva, are fairly high on both products (particularly on Turkish tobacco) might increase U.S. imports, but for the above mentioned reasons such an increase is un- oertain. It is assumed, therefore, that U.S,! impQrts of tobacco wil~ be in 1949 and 1950 slightly above the 1947 level~ say at some $87 million in 1949 and ~90 million in 1950. Similarly an increase in U.S. imports of scrap tobacco and manu- factures in the next two years seems highly improbable. They may be estimated at some $5 million both in 1949 and 1950. In the following table our estimates are summarized and compared with the actual values for 1947 (million dollars): ~ J.W 1250 Leaf for cigar wrappers 4.3 6 7 Cigar leaf 19~1) Cigarette leaf 65.9} 87 90 Scrap and manufactures -'u.§ ...2 ...2 Total 94.1, 98 102 Per cent increase over 1947 4% 8% Hid es and Skins U.S. imports of raw hides and skins amounted in 1947 to :$89 /' million compared with ';?137 million in 1929.. The value of imports in 1947 relative to 1929 is very low indeed, but of course the volume is still lower, as the following table, in which imports of the subgroup in 1947 and 1929 are distinguished by broad categories, indicates (quan- titative and vaiue terms): 1929 million million million million qommodities J;lounds , pounds $ Cattle hides 56 14.9 265 42.6 Calf and kip skins 5 1.9 56 16.4 Sheep and lambskins 46 18.9 65 21.9 Goat and kidskins 59 39.4 100 47.5 Other hides and skins 25 a/ l4.~ 30 8',9 Total 191 89.6 516 137.3 !I Does not include miscellaneous hides and skins. The value of these products is included in the dollar figure. The small amount of hides and skins imported into the United states in 1947 seems to be due mainly to the following causes: (a) the relative shortage in the leading exporting oountries such as Argen- tina and Brazil (cattle hides), India (goatskins), Australia, New Zealand and several African countries (sheepskins); (b) the wartime de- velopment of tanneries in some exporting countries (such as Argentina, Brazil and India) which inoreased their oonsumption of hides and skins in domestic production of leather both for local consumption and for export; (c) the a~ute shortage in Europe, which is therefore competing heavily with the United States on the export markets. All these causes together certainly affected the volume of U.S. imports of hides and skins in 1947 and will probably affect it somewhat in the short-run, but one of them, namely (b), will be significant also in the long-run. Moreover, since 1929 many substitutes for leather, such as natural and synthetic rubber, plastics, cork fabrics, felt and fiber for foot- wear and a greater variety of fabrics for upholstery materials~ luggage, 43. handbags, etc., have been used in increasing quantities., so that it seems unlikely that U.S. imports of hides and skins in the future could attain levels comparable with that of 1929 (taking into account the difference in levels of national income). Nevertheless, U.S. imports of hides and skins, which are duty- free with the exception of cattle hides and calf and kid skins (subject, however, to very low duties), may be expected to increase very con~ siderably above the 1947 level. At present the domestic demand for leather products is very great as a result of current and accumulated needs, while domestic production, although high compared with the pre- war period, is not in a position to meet the dem,and. Of course the expansion of imports depends upon the availability of foreign supply. From recent information it appears that the supply situation abroad is easing, especially in some Latin American countries, but also, in India, Australia, Net., Zealand and Africa. As a consequence U.S. imports of hides and skins in the first six months of 1948 have shown a steep up- ward trend,. A linear projection of this movement through 1950 would give very high figures in the next two years, but they would be rather unrealistic since (a) the high level of import of hides and skins in 1948 will cover a large part of the accumulated demand, (b) the U.S. production of hides and skins will increase appreciably in the years ahead as a result of the expected improvement in the livestock situa- tion. It seems therefore more reasonable to project a trend increasing at a decreasing rate; the results are assembled in the following table. The quantitative distribution among the different categories of hides and skins both in 1949 and 1950 has been estimated according to the distribution in the first six months of 1948, slightly modified in order to allow for some increase in supply of certain types of pro- ducts. The values of each category have been estimated at current average prices. 12tt2 1220 millions millions millions millions Commodity pounds )( pounds (::- 'iP (. Cattle hider- 180 48 215 56 Calf and kip skins 20 13 30 18 Sheep and lamb skins 85 35 100 4l Goat and kid skins 90 66 100 73 Other bides and skins 45 !I 28 55 !I 32 Total 420 190 500 220 !I Does not include miscellaneous bides and skins. The value of these products are included in the dollar figures. The global figures for 1949 and 1950 compare with ~9 million in 1947, showing a per cent increase of 113 per cent in 1949 and 147 per cent in 1950. Fish and Products U.S •. imports of fish, shellfish and products amounted in 1947 to 411 million pounds valued at ;~4 million compared with 383 million pounds valued at $40 millinn in 1929. In broad categories these imports were distributed as follows (quantitative and value terms): 19~7 1222 million million million million 9ommodity pounds ,~ pounds o~ * Fresh or frozen fish 235 33.7 174 11.8 Dried and pickled or salted fish 80 11.5 126 10.1. Canned fish 36 14.9 35 6.8 Shellfish 52 22.3 42 11.1 Others 8 1.9 2 0.9 Total 411 84.3 383 40.7 45, The table shows that U.S, imports of fresh or frozen fish in 1947 were, in quantitative terms, well above the 1929 level, whereas imports of dried and pickled or salted fish were oonsiderably below it. Ninor changes occurred in the import of canned fish and shellfish~ On the average the imports of the subgroup were only slightly above the 1929 level t reflecting, at least to a oertain extent, the stationary trend in the United States per capita consumption (11 pounds of edible weight on the average, before and after the war). The increase in imports of tresh or tr~~en f!~h (subject to very low speoifio duties, with the exception of smelts, tuna and herring which are d~tY-free) has resulted from an expanding market in the U.S, These imports come from a number of countries, primarily Canada, and could increase somewhat in the near future if there were sufficient re- frigerating faciliM,.ee for transport and storage, together with adequate marketing schemes, to allow an increase in consumption of fish products in the Central states which are responsible for the very low ~er oaplya oonsumption in the United States as a whole. It is expected that such refrigerating facilities will be provided on a verY large scale in the near future. To what extent, however, fish consumption will increase in the Central States is difficult to say. It is reasonable to expect that this increase will take time, so that for the ne~ two years U,S. imports of fresh or frozen fish may be estimated at some 240 million pounds valued at ~40 million in 1949 and 245 million pounds valued at ~43 million in 1950 (average current prices). With respect to dried and pickled or saltegfish, which again " J , ' , ,t enters the United states aubjeot to very low specific duties, no in~ crease in imports seems to be expected in the next two years, Domestic consumption of this type of fish products has clearly shown in the last few years a declining trend and no significant change in this trend is in sight. U.S. imports of these products will probably amount to ~12 million both in 1949 and 1950. The category of canned fish, which includes fish in oil and fish in airtight containers, differs from the previous ones mainly because it consists to a large extent of high-priced products which are never- theless highly appreciated by American consumers. Canned fish is im- ported primarily from Norway, Portugal and Peru. At ourrent levels of national income in the United States, an appreciable increase in these imports may be expeoted in the next two years. Its extent will; how- ever, depend largely upon the U.S. tariff policy. Canned fish in general, and fish oanned in oils in particular, are subject at present to ad valorem duties which, although reduced somewhat at the Geneva Agreement, are still rather high. Assuming no reduction in duties U.S. imports of canned fish may be estimated at 50 million pounds valued at $2i million in 1949 and 60 million pounds valued at $25 million in 1950. Should a substantial reduction in duties occur in the next two years. the previous figures could increase to $40 and $50 million, respectively. In the following total estimates an unchanged level of duties is assumed. The prospects are favorable also with regard to shellfish and products which are imported principally from Canada, Mexico and Newfound- land. Before the war a large part of the imports of shellfish consisted of canned crabmeat t coming almost entirely from Japan. It is unlikely that this trade will resume its former importance in the near future, but an appreoiable increase may be expeoted in other imports, such as . n 47. those of lobsters, which enter the United States duty-free. It seems safe to estimate the U.S. imports of shellfish in general at some 90 million pounds valued at ~36 million in 1949 and 100 million pounds valued at $40 million in 1950. The previous estimates are summarized in the following table in whioh the probable amount of the U.S. imports of fish and shellfish in 1949 and 1950 is compared with the actual figures for 1947 (millions of dollars): ~ ~ 12iQ Fresh or frozen fish 33.7 40 43. Dried and piokled or salted fish 11.5 12 12 Canned fish 14.9 21 25 Shellfish 22.3 36 40 others f!/ 1.9 ~ ..J. Total 84.3 111 123 Per oent inorease over 1947 3~% 46% !I Approximate figures for 1949 and 1950 on the basis of the average inorease estimated for the other p~oducts~ With a reduction in duties on canned fish, the global figures for 1949 and 1950 could inorease to $130 and $150 million, respeotively. Vegetable and Preparations This subgroup includes a great variety of oommodities, imports of which in the next two years are very difficult ~o predict. The present analysis will be limited to the most important commodities, and for the others an attempt will be made toward a reasonable generalization. U.S. imports of vegetable and preparations ~ounted in 1947 to $54 m~llion compared with ~48 million in 1929. The following table 48. indicates the principal commodities imported under this heading (quan- titative and value terms): 1947 1929 million million million million Cormnodity pounds $ pgunds $ Tomatoes, fresh, and tomato paste, and canned tomatoes 282 22.9 308 14.4 White potatoes 315 7.4 256 4.3 Farinaceous substances 87 6.2 181 4.7 Other vegetable and preparations !!l 17·1 !!l 24·7 Total 53.6 48.1 !!l Not calculated. In the category of tomatoes and produc~s, imports of tomatoes in the natural state (coming principally from Henco) reaohed a very high level in 1947 compared with 1929 (263 million pounds against 119 million) but those of canned tomatoes and tomato paste (coming mainly from Italy) were much below the 1929 level (18 and 0.29 million pounds, respectively, as against 174 and 13.8 million). The low level of U.S. imports of canned tomatoes and tomato paste seems to be due partly to the low output abroad (Italy) and partly to the high level of U.S. duties (which are very low in the case of tomatoes in the natural state). In such circumstances an increase in U.S. imports of canned tomatoes and tomato paste is probable in the near future with the restoration of pro- duct10n abroad, but any substantial increase seems to be excluded at the present level of duties. An expansion of imports from Hex1co of tom- atoes in the natural state also seems pOSSible, but no large ihcrease above the 1947 level is likely. On the whole U.S. imports of tomatoes and products may be estimated at some $\25 million, both in 1949 and 1950 •. A substantial reduction in duties on canned tomatoes and tomato paste 49. could increase this figure to some $50 million (taking the volume of imports of canned tomatoes and tomato paste in 1929 as a basis). No increase in imports seems to be expected in the category of ~hite potatoes (almost entirely from Canada). The U.S. per capita con- sumption of potatoes has been decreasing steadily since 1921, largely because of the change in American diet. The current high level of national income is most unlIkely to cause a higher consumption; if any- thing, the current level of income may mean a greater shift toward higher priced vegetables and fruit, and, therefore, decrease further the con- sumptio~ of potatoes. In such circumstances no benefit would be der- ived from either an increase in the quota (tariff~quota system) now established on white potatoes or a reduction in duties. U.S~ imports of white potatoes in 1949 and 1950 may be safely estimated at the 1947 level, say $8 mill~on. Some increase in imports of farinaeeoys subs~an~e§ (tapioca, sago and arrowroot) which are duty-free, seems possible owing to the various important uses for these substances (e.g. for foods, for making textiles and paper, etc.) They may be estimated at some $9 million in 1949 and $10 million in 1950. The information derived from the previous analYsis cannot be used for any reasonable estimate of the probable amount of imports of other vegetables and preparations in the next two years. The only method seems to be to extrapolate the trend of the most recent period through 1950. Now the annual rate for 1948 (first six months) shows for all imports of vegetable and preparations, not yet considered, an increase of some 10 per cent over the annual rate for 1947 based on the first 50. six months of the year. Taking price increases into account, the quan- titative inorease appears very small indeed. Assuming increases of some 5 per cent a year, and allowing for seasonal variations, tentative figures for 1949 and 1950 are $20 million in 1949 and ~2l million in 1950, The following table summarizes the results now obtained and com- pares them with the aotual figures for 1947 (millions of dollars); ~ 12&2 ~ Tomatoes (fresh and canned) and tomato paste 22.9 25 25 '\Ilhite potatoes 7.4 8 8 Farinaceous substances 6.2 9 10 Other vegetables and preparations Total 17·,1 53.6 &Q 62 - 21 64 Per cent increase over 1947 16% 19% Should a substantial reduction in duties on canned tomatoes and tomato paste occur, the total figures for 1949 and 1950 m~ increase to $87 and ~89 million respectively. Fertilizers and Fertilizer Materials U.S, imports of fertilizers and materials consist primarily of nitrogenous fertilizers, as is shown in the following table in which the imports in the subgroup, distinguished by broad categories, in 1947 are compared with those in 1929 (quantitative and value terms): 1947 1922 thousand million thousand million Commodity sh,tons t sh.tons ,! Nitrogenous fertilizers 1,Ci>5 37.4 1,485 50.4 Phosphate fertilizers 56 0.7 117 4.1 Potash fertilizer materials 48 1.9 896 17 .. 6 Others 92 J.4 112 2.1 Total 1,268 43.4 2,610 72.2 51. Nitrogenous fertilizers are ot two types: inorganic, of whioh sodium nitrate (from Chile) and calcium cyanamide (from Canada) are the most common, and organic., Of the two, the inorganic is much more important, ,acoounting befor e the war for about 90 per cent of U.S. reported produotion of the two types, 95 per cent of imports, and 90 per cent of reported consumption. In 1947 U.,S. imports of nitrogenous fertilizers (which are duty.free) amounted to ~37 million, of which almost i;,»)0 million consisted of sodium nitrate, calcium cyanamide, ammonium nitrate and ammonium sulphate. At present world production of chemical fertilizer nitrogen is somewhat higher than before the war, but world demand has increased more than production owing to the pressure for higher agricultural production, depleted fertility of the soil, educational programs intended to e~ courage the use of more fertilizers, etc. Of course this situation restricts impArts into the United States, which used to cever, before the war, some 45 per cent of the domestic consumption of chemical nitro- gen. In 1947 u.s. imports amounted to about 1 million short tons (gross weight) as compared to 7 million tons consumed (for agricultUral and industrial purposes); that is to say, the ratio of inlports to consumption decreased to 14 per cent from 45 per cent before the war, The relative shortage of supply abroad is without doubt largely responsible for the drop in the ratio of imports to consumption, but it must also be noted that during the war the U.S. capaoity for production of synthetic ammonia increased very greatly owing to the military uses of this pro- duct. It is to be expected that a greater availability of supply abroad will increase the ratio of U.S. imports to consumption, although a 52. restoration of the prewar ratio seems to be out of the question. U. S • trade returns for the first six months of 1948 show a sharp increase (allowing for seasonal variations) in imports of fertilizers in general over the 1947 level, the net increase, hOl-IeVer, being entirely due to sodiu:n nitrate from Chile. This product seems to compete successfully with domestic synthetic 8lliIllonia. On the basis of a proj.ection at a decreasing rate of the most recent trend, imports of sodium nitrate may be estimated at some SOO million pounds valued at $25 million in 1949 and at 850 million pounds valued at $27 million in 1950; total impo~s of nitrogenous fertilizers as a whole would probably amount (at current prices) to ~ million in 1947 and $62 million in 1950, assuming nn appreciable increase in imports of other nitrogeneous materials, in- organic and organic. Both phosphates and potash fertilizer§, which again enter the U.S. duty-free, are at present minor items in the U.S. import trade and they are bound to remain so in the near future. Together with other ferti- lizer materials their imports into the U.S. will pr(lbably amount to' some $7 million, both in 1949 and 1950. The following table indicates the estimated amount of U.S., imports of fertilizers and materials in 1949 and 1950 compared with the actual figures for 1947 (millions of dollars): ~:2 ~ l22.Q Nitrogenous fertilizers 37.4 60 62 Other fertilizers 6.0 -1 -1 Total 43.4 67 69 Per cent increase over 1947 56% 63% 5.3. Silk and Manufactyres This subgroup provides the most outstanding example of once typical U.S. imports, which have by now almost disappeared. Im- ports of silk and manufactures amounted to ~71 million in 1929 (mainly raw silk -- 90 per cent of the total) but deoreased to $130 million in 1939. In 1946 they stood at $1.36 million due to the U.S. Government program of supporting large irilpol"ts of raw silk from Japan, but dropped to $29.7 million in 1947, as soon as that program was discontinued. This unparalleled decline may be ascribed to three causeSf (a) the in... creased use of substitutes, mainly rayon, in the thirties; (b) trade difficulties with the traditional exporting countries, such as Japan and Italy in that period, and (c) the appearance in recent years of a new synthetic fiber, nylon. In broad oategories U.S. imports of silk and manufactures were distinguished as follows in 1947 and 1929 (quantitative and value terms): thousand million thousand millio~ Commaditx p ';, pounds s? 120unds t Raw silk and other unmanuf. silk 3,182 16.1 98,016 432.3 Silk manufactures Y J..49 !I ~ Total 29.7 471.3 !I Not calculated. j, 4 t Certainly two of the causes mentioned above, namely the competition af rayon and nylon, will not disappear in the future, and, thererore~ it is quite evident that U.S. imports of raw silk (which enter the U.S • . duty~free) will never regain a position remotely oomparable with that in 1929. However, the very low amount of imports of 1947 was also due to the laok of supply abroad, and the high level of prices. It is reason- able to expeC't an appreciable increase in U.S .. imports of raw silk with the restoration of production in the principal exporting countries (Japan ~nd Italy) and a reduction in prices. Already in 1948 imports of raw silk show in quantitative terms a considerable increase over 194?and it seems very probable that this upward trend will continue to a certain extent in the near future. At the current high levels of national income in th~ United states a fairly large domestic consumption of raw silk is to be expected. Assuming a constantly increasing flow of foreign production, u. s .. imports of raw silk may be estimated at 7 million pounds, valued at ~~17.5 million in 1949 and at ·7.5 million pounds valued at ~2.5million in 1950 (at current prices, which are greatly below the 1947 level),. Adding one million dollars for imports of other u.rn:nanufactured silk the previous figures may be rounded to $19 and $24 mill:i,on, respectively. It is much more difficult to predict the probable amount of U·.S. imports of silk• manufactures, which are subject to very high ad valorem import duties. If no reduction in duties occurs in this category, U.S. imports will certainly never become significant; they will probably re- main more or less at the 1948 annual rate (based on the returns for the first semester), say $20 million. 'vJith a substantial reduction in duties U.S. imports could increase somewhat, provided that foreign ex- porters succeed in oarrying out adequate marketing programs in the U.S. Successful competition with rayon and nylon on the U.S. market seems to depend upon the ability of foreign exporters to stimulate a renewed interest of the American consumers in silk products. The same is true, a fortiori, of raw silk. Subject to this condition U.S. imports of 55. silk manufactures and particularly raw silk may be greatly stimulated, but to what extent it is difficultto say. Any estimate 1ft this field, at the present moment, would be purely conjectural. The following estimates are based on the assumption of no re- duction tn duties on silk manufactures and of.no major marketing schemes by the exporting countries. They are compared with the actual figures for 1947 (millions of dollars): 1947 •. ~ 1920 Raw silk 16 ..1 19 24 Silk Manufactures 13.6 .~ - 20 Total 29.7 .39 44 Per cent increase over 1947 31% 48% Conclusions The probable values of U.S. imports of the commodities in this ·.group in 1949 and 1950 are assembled in the following summary table, in which the estimates are compared with the actual figures for 1947. Percent Percent of millions of dollars i, r $nc:rease total in':" ~ubgrogps in 1950 crease from. ., 19!P 1249 '!_ ,b, 1950 , .over 1947 1947 to 1950 Coffee~ cocoa and tea 783 910 928 19 18.6 Paper and manufactures 363 425 439 21 9.7 Paper base stocks 294 351 378 28 10.7 Frui ts and nuts 141 163 ·171 21 3.8 Jute and manufactures 137 194 205 52 8.7 Furs and manufactures 127 186 206 62 10.1 Semimanufactured wood 121 177 192 59 9.1 Tobacco and manufactures 94 98 102 8 1.0 Hides and skins 89 190 220 147 16.8 Fish and products 84 III 123 46 5.0 Vegetable and preparations 54 62 64 19 1.3 Fertilizers and materials 43 67 69 63 3.3 Silk and manufactures 29 39 .. 4/t 48 1.9 T~ta1 2.359 2,97.3 3,141 4 F ; i . 33 ( L _ 100. 56., " The table shows that the largest per cent increases over 1947 will probably take place in the categories of hides and skins, ferti- lizers,furs, semimanufactured wood and jute. '. The greatest absolute increases occur in the categories of coffee, cocoa and tea, hides and skins, paper products, furs and semimanufactured wood.' From the analysis it emerges also that the expansion in U.S. imports depends in many. oases upon the restoration of production abroad. This is particularly true of cocoa, standard newsprint paper, paper base' stocks, bananas, semimanufactured wood, hides and skins and fertilizers. Finally it must be remembered that the previous table rests on the assumption of no reduction in duties. Should a substantial reduc- tion occur, U.S. imports of silver or black fox furs, canned tomatoes and tomato paste and canned fish would increase appreciably. According to the previous estimates for these commodities the totals for 1949 and 1950 would be ~3,034 million and $3,210 million respectively. It has not been estimated what increases a reduction of duties could pro- mote in other fields such as those of nuts, tobacco and silk manufactures. In order to take into account also the probable effects of a tariff re- duetion on the imports of these items, the previous figures may be tentati vely rounded to $3,050 million and ~:13, 230 million respectively. The following table distinguishes the probable amount of U.S •. imports of the commodities examined, in 1949 and 1950, in the case of no reduction of duties from the probable amount of such imports in the case of a substantial tariff reduction (millions of dollars): Per cent increase 1947 ~ 1950 in 1950 over 1247 13 subgroups with no reduction in duties 2,359 2,973 3,141 33% 13 subgroups with SUbstantial . reduction in duties 2,359 3,050 3,230 37% Increase due to·reduction of duties 77 89 4% 57., The table shows quite clearly that a substantial reduction in duties on the commoditieS' included in Gl"OUp I would change only slightly the picture of the future U.S.' import trade. 58. SIDY1l'14RY OF SECTION II. Se otion . II deals in detail w:l::bh.:the following subgroups of U.s. imports: (1) non-ferrous metals and ferro-alloys,. (2)rub'ber and manufactures, (3) oilseeds and vegetable 011s" (4) petroleum and products, (5) preoious stones, (6) vegetable fibres other than ootton,. jute,. flax,. hemp and ramie, (7) naval stores, gums and resins.· The estimated value of these imports i8·$2,172 million in 1949 and $2,415 million in i950 oompared with *~1,616· million in 1947~· Increases in the value of importsba:ve been estim.ated.for all subgtoups,- particularly non-ferrous metals and ferro-alloys, andpetroleutn. Imports of non-ferrous metals and ferro-a11oyswillbe greatly stimulated by the U.S. stookpiling program. A1mcst all the non-ferrous metals and ferro-alloys are li.sted by the Munitions Board as strategic materials to be stookpiled 111 the U.S. On the assumption that purohases for the stookpile will be speeded up in the near future and supply abroad will be. 'greater, U.S. imports of non-ferrous metals and ferro-alloys have bef)n estimated at.$802 niillion in 1949 and $895 million in 1950 as compared to.$515million in 1947. The largest sha.re of the increas~ iacovered . by copper, lead, tin and zino. Witll regard to petroleum and produots, it is interesting to note the ohanged position 'of the U.S. In 1947 the U.S. wfls, for the first time in twenty-five years, on a net import basis for crude petroleum. This sit~tion isexpe.cted to continue in the future" Assuming an increasing produetion .of crude petrol.eum in Venezuela and large shipments to the U.S., imports for 1949 and 1950 have been estimated at $.350 and. $4.30 million, respeotively, compared with~170 million in 1947.,U~S.imports of fuel oils have Peen estimated at ~;100 million in 1949 and (;,80 million in 19:50 as against ~~75 million in 1947. Smaller increasesth~ in the previ.ous two subgroups a-re' ·expectad. in U.S. imports of rubber, preoious stones and vegetable fibre.sother'than cotton, jute, eto. In the oase of rubber and manu~actures (mainly crude rubber) the relatively 3,.0\1 value ,of imports of crude rubber estimated for 1949' and'. 1950. ($297 and ~~.337·million, ~elilPectivel.y" l;I.f,lcompared to(~306 nrl.llion 1n 1947), is primarily due to the reoe:nt;drop.inpriees •. The prospeots for U.S. imports ofpreeiws stones and vegetable f:tbres other than. cotton, jute, ~tQ. are more favorable •. An appreciable inorease is to be expec~ed in imports of indUstrial diamonds (whioh are listed by th~ Munitions Board as strategic material) ,and the total value .of imports of precious stones in 1949 and 1950 may be estima.ted at ~157 and . $163 million, respectively,. as compared with (~I25 million in 1947•. 59. Imports of vegetable fibres other than cotton, jute, etc., ,.,hich include primarily sisal and manila (strategic materials), have been put at ~?lOO million in 1949 and ~,pl14 mUlion in 1950 against $82 million in 1947. Minor increases are expected in imports of oilseeds and vegetable oils and naval stores, gums and resins, A tight supply will probably characterize the international market in some vegetable oils in the near future, but the estimated moderate increase in U.S. imports of these products during the next two years is due to the expected drop in the purchases of linseed oil. On the whole, U,S. imports of oilseeds and vegetable oils have been estimated at ~~271 million in 1949 and $292 million in 1950 compared with $265 million in 1947. Imports of naval stores, gums and resins (primarily lac and shellac) will probably ~ount to $45 million in 1949 and $49 million in 1950 as against ~~43 mj,llion in 1947. Both the largest per cent and the largest absolute increase in 1950 over 1947 will probably occur in the imports of petroleum and non- ferrous metals and ferro.alloys. These two subgroups together represent 81% of the estimated net increase over the next two years. The largest share of the benefit woUld accrue to some Latin American !)ountries (such as Venezuela, Chile, and }·1exico), Fer East countries (such as British Malaya and Netherlands East Indies), some British African dependenoies, Canada and South Africa. Further substantial reductions in duties would be almost meaningless in the field of imports Qovered by this section. It has been estimated that the U.S. imports would be raised by some ~~lO million should such reductions be granted. 60 • . SECTION II This section is devoted to the analysis of U.S. imports of those oommodities which have beeninoluded in Group II namely: (1) non-ferrous metals and ferro-alloys; (2) rubber and manufactures; (3) oilseede and vegetable oils; (4) petroleum and produots; (5) preoious stones; (6) vege.. table fibres other than cotton, jute, flax, hemp and z:amie; (7) naval s~ores~ gums and resins. The pr'8e~t analysis will be carried out on the assumption that the 1 . , ourrent U.S. stockpiling program will be oompleted by June 1953. Also in this section the U.S. tariff regime for eaoh oommodity will be mentioned, : aJ.though here again, as in the previous section, no real problem of tariff policy seems to arise. N2~fetr0Y§(met~ls and ferro-a~oys. This subgroup includes most of the materials being stockpiled by the U.S. It is needless to stress, therefore. tne1r great importance in the U.S. import trade. U.S. imports of non-ferrous metals and ferr~alloys amounted in 1947 to $515 million compared with ~:~331 million in 1929. The follo,,,ing table indicates the quantities and values of the principal imports in the subgroup in the two years (manufactures are indicated separately) : 61., 1947 1929 Million Million Million Million .Q2!!Eodity______ Pounds d'· S!? P~unds ~ Copper (content) 82S 162~5 974 153.7 Lead (content) 461 54.2 238 13.5 Tin (content) i17'. 62.9 195 91 •.8 Zinc (content) 750, 34.9 29 1.1 Manganese (content) i599 35.8 724 8.4 Chromite (oxide content) 868 18.9 711 2 •.7 Nickel 176 45.4 97 19.1 Tungsten (content). 9 8.7 7 2.5 Bauxite (crude.) 3644 1l.9 853 1.7 Aluminum metal" scrap,etc. 63 6.4 48 8.9 Other non-ferrous metals & alloys Jal 29.0 !!I Brass and bronze manufac- tures (copper content) 15# 14Y O'ther manufactures !I !:/ Total 515.1 -- if Not calculated .12/ Includes only old brass and elippings~ itJ'ith respect to the U.S. stockpiling program it is estimated (a) that, of the balance of strategic materials still to be purchased for the national stockpile, namely $2.5 billion, some $1.9 billion will probably be spent on copper, lead, !in, iinc" manganese and chromite" (b) that of this amount, supposing conservatively a distribution over the next four and " one-halt years at an increasing rate, the shares for 1949 and 1950 will be $300 and $400 million, respectively, (c) that these amounts will probably be allocated as follows: 25% to copper, 20% to lead, 25% to tin, 20% to zinc, 5% to manganese and 5% to chromite. It is assumed, moreover, that U.S. imports of these materials for normal requirements (that is, outside the stockpile program) will remain in 1949 and 1950 at the same lev~l as in 1947. This assumption is based on the presumption that, although for some materials such as copper, lead and zinc current net.- imports plus domestic production are not sufficient 62. to meet domestic consumpt~on an increase in domestic production as well as a decrease in exports may be expected in 1949 and 1950. This is not so tor tin which is not produced in the U.S. and is exported in negligible quantities. The gap between domestic consumption and imports in 1947 (44 million pounds) must be covered by an increase in imports, which will be considered in the. following calculations. As far as manganese and chromite are concerned, it seems that current imports meet approxi- mately U.S. normal requirements. On the preceding assumptions, U.S. imports of the six materials in 1949 and 1950 for normal requirements and for the stockpile at current prices 11may be theoretically estimated as follows (million dollars). The estimates are compared with the aotual figures for 1947. 1947 ~ 12.2Q Copper 162 250 277 Lead 54 135 158 Tin 63 216 235 Zinc 35 107 123 J.1angane se 36 53 61 Chromite 19 ~ --2l Total 369 800 905 The totals for 1949 and 1950 differ from those reached by adding to the total for ·1947 ~,;300 million in 1949 and ;M,OO million in 1950 for two reasons: (a) the higher current prices of the six materials, (b) the addition of some 44 million pounds to the imports of tin in 1949 and 1950 in order to cover the normal requirements. lJ' Current prices (average of the first 8 months of 1948) are as follows: manganese $45 per short ton, chromite ~30 per ton, cop~r '#440 per ton, lead ~p300per ton, tin ~p1800 per ton and zinc :::;200 per ton. In calculating the dollar figures, moreover, current prices have been deflated somewhat in the casas of copper and lead (5%) and especially in the cases of tin and zinc (8and 20%, respectively) in order .to take into account the fact that part of the imports enter the U.S. in the form of oonoentrates and therefore command lower prices per unit of metal content. 63. The problem now is to investigate whether such an expansion in U.S. imports is possible, which 'Would imply, of course, an investigation of the trend of production of each material in the producing countries. Such an analysis is difficult and, moreover, it would require too much space. Looking at the supply situation in the various producing countries (such as Latin America for copper, tin, zinc and lead, the Netherlands Indies and British Malaya for tin, the Belgian Congo and Northern Rhodesia for copper, USSR and Southern Rhodesia for manganese and ohromite, Australia and Canada for zinc and lead) it appears that the actual figures of the mentioned U.S. imports for 1949 and 1950 will probably fall short of the theoretical figures. This seems to be particularly true in the case of lead and zinc. The following table gives the probable U.S. imports of the six materials in 1949 and 1950, compared with the figures for 1947 (million dollars). The estimates have been based also on the most recent trend of U.S, imports of these materials. llli ~ 122Q Copper 162 219 230 Lead 54 85 100 Tin 63 182 215 Zinc 35 72 80 Hanganese .36 45 50 Chromite --12 ~ ~ Total 369 639 717 Percent inorease over 1947 73% 94% listed by the 11unitions Board as strategic Inaterials to be stockpiled. It is estimated that,l of the baJ snce to be spent on strategic materials other than the six minerals already examined, some i;~300 million will probably be allocated to other minerals such as nickel, tungsten, bauxite, etc. Assuming also in this case a distribution at an increasing rate in the next four and one-half years, some $50 million in 1949 and ~p75 million in 1950 will probably be spent on these materials_ Now, on the assumption that imports ih 1947 covered in many cases the normal domestic requirements (an exception, perhaps, is tungsten); U.S. imports would amount to some $150 million in 1949 and $175 million in 1950. Allowing for s6me increases in prices in the last few months for the minerals to be stockpiled and for some further imports for normal requirements, the previous theoretical figures may be safely raised to some $160 million and e185 million, respec- tively. Here again, however I the question arises l-lhether or not the foreign producers will be in a position to meet the U.S. demand. On the whole it seems that, with the major exception of tungsten and antimony (whioh come mainly from China), the supply situation abroad is good enough to meet a large part of the U.S. demand for the next two years. The trade returns for the first six months of 1948 show, as a matter of fact, a sharply increasing trend in these imports. Conservatively, it is assumed in the following estimates that U.S. imports of non-ferrous metals and ferro-alloys other than the six minerals previously considered will amount to some ~1;0 million in 1949 and $170 million in 1950. The analysis has n6t considered up to now U.S. imports of brass and bronze manuf~~BXe~ and misce~laneous manuf~~. As far as the former is concerned the high level of 1947 was entirely due to imports of war surplus from the U.K. under an agreement to return refined copper. It is therefore to be expected that they will sharply decrease in the next two years. To vhat extent, it is difficult to say. It is assumed that they will run in 1949 and 1950 appreciably below the annual rate for 1948 ($25 million), say $10 million and $5 million respectively. Miscellaneous . . . " , metal manufactures are expected to be, as in 1947, a negligible item.' It is ass\lIlled that they will amount to some $3 million both in 1949 and 1950. The following table summarizes the estimates of the probable U.S" imports of non·ferrous metals and ferro-alloys ln1949 and 1950 compared with the actual figures for 1947 (million dollars): - 1947 12lt2 1950' Si~princlpal strategic materials 369 639 717 other non-fer.rous·metals and ferr()ooo.alloys 101 150 170 Brass and bron~e manu!. 42 10 5 other manufactures --2 -1 -,J . '. Total 515 g02 895 Percent increase over 1947 56% 74% " The U.S. tariff treatment of the imports of non-ferrous metals and ferro-alloys ea~ be described as follows: (a) some products, such as chromite, tin and nickel enter the U.S. dutY~free, (b) other~, such as bauxite, aluminum alloys and scraps, zinc, lead and nickel in ingots or bars, are subject to specific rates that are not very high on an equivalent ad valorem basis, (c) others, such as manganese and tungsten are subject to specific rates that are rather high on an equivalent ad valorem basis. Copperoceupies a particular position; it is duty-free, but subject to an import tax of 4 cents per pound (copper content) temporarily suspended , until l1aTch 1949. The duty on lead has also been suspended temporarily: In normal times, it does not seem that a reduction in duties could stimulate appreciably the imports of no~ferrous metals and ferro-alloys~ In the present circumstances it can be safely concluded that a reduction in duties would not affect the volume of U.S. imports. 66. Rubber and manufactures u.s. imports of rubber and manufactures amounted in 1947 to ~325 million as compared to ~247 million in 1929. They consisted mainly, as usual, of crude rubber. The following table indicates U.S, imports of this subgroup, distinguished by broad categories, in 1947 and 1929 (quantitative and value terms): 12/;;7 1929 million million million million Qgmmoditl Crude rubber poWds 1,547 $ 306.9 po;unds .J )1,263 - 240.9 Natural latex 39 9.8 ) Other rubber and gums 28 6.2 43 4.1 Rubber manufactures !JI --b.2 ~/ ~ ~ 325.8 247.3 §7 Not calculated. Imports of ~e naturaLr~ (which are duty-free) used to cover, before the war, the total u.s. consumption of rubber, coming mainly from British Malaya and the Netherlands Indies. In 1940, of the 650,000 long tons of crude rubber consumed in the U.S., approximately 97% came from those areas, Of course this situation changed substantially as a consequence of the war in the Far East. From the beginning of 1942 the U.S, vas cut off from its supplies of natural rubber and the problem of finding a substitute came to the foreground. In fact, the U.S. authorities had already considered this problem sometime before, having studied alternatives such as stimulating production of natural rubber in Latin American countries or when increaSing production of reclaimed rubber. But, fohe emergency arose, the greatest effort was made in the development, of the synthetic rubber industry, Within two years the U.S. had erected, at gO'iTernment expense, a synthetic rubber industry with a rated annual capacity of 850,000 tons. In the latter part of 1944 it ~as already producing at the rate of more than 67. one million tons annually. Soon after the war, with the resumption of the trade with the Far East, the picture changed again. In 1946 production of synthetic rubber fell to 750,000 long tons and imports of natural rubber reached 366,000 tons. In 1947 import~ increased further to 690)950 long tons (or 1547 million pounds) while production of synthetic rubber decreased further to 460,000 tons, ~t is to be expected that this re~toratio~ of the prewar pattern will continue. However it seems unlikely that the synthetic rubber industry will be completely displaced. For many reasons,such as the intention of the U.S. Government to minimize the ultimate loss of its invested capital, but mainly for strategic motives, it is certain that a small and efficient synthetic rubber industry will be maintained and pro- tected. Furthermore, some types of synthet~o rubber are better than natural rubber for a number of special purposes. Finally, although it is true that no synthetic rubber now being produced at a cost competitive "lith that of natural rubber is considered equal to natural rubber for most major uses, it is equally true that this situation may change with further development of technique. It has been suggested that the production of synthetic rubber will amount in normal times to 350,000 tons. E.stimating U.s. consumption of rubber (excluding reclaimed rubber) at 1.1 million tons, imports of natural rubber for normal requirements should run at 750,000 long tons. But natural rubber is also a strategic material to be stockpiled in the U.. S. Adding the imports for the stockpile the previous figure may be raised to 850,000 tons, 68. Current U~S. 1lnports of cr~e ;rubber ~ at ~ annual rate of 700,000 tons oompared wttb 690,950 ton~ in ~947. In the ne~ two years they may be estimated at 750,000 tons and 850,000 tons respeotively.. A:t current prices (which are below the 1947 level) these quantities would give $297 million in 1949 and $337 million in 1950. Imports of natural latex or milk of rubber, which again enters the TJ.,S! duty-free and 1s listed by the Munitions Board as a strategio material,. show a sharply i~creasing trend in the first six months of 1948 compared with 1947.. Projeoting this trend through 1950 at a deoreasing rate imports of natural latex may be expected to run at some 100 million pounds valued at $25 million in 1949 and at 120 million pounds valued at $)0 million in 1950. Imports of other rubber and gums and of rubber man~aotureB may be estimated at some $7 million and $3 million, respeotive1y, both in 1949 and 1950. The most reoent U~S. trade returns show a fairly stationary level. Our estimates of the probable U.S. imports of rubber and manufaotures in 1949 and 1950 are summarized in the following table and compared with the actual figures for 1947 (million dollars): "J9J;l lli2 l22Q Crude rubber 306.9 297 337 Natural latex 9.8 25 30 Other rubber and gums 6.2 7 7 Rubber manufactures 2.9 --1 -2 Total 325.8 332 377 Percent increase over 1947 2% l6% Of course, the moderate percent increases over 1947 shown by the table are entirely due to the drop in the price of crude natural rubber which occurred in the last few months~ Oilse~s and vegetable oils U.S. imports of oilseeds consist at present mainly of copra and castor beans, imports of·vegetable oils mainly of tung oil, linseed oil (from flaxseed) palm oil and coconut oil (from oopra). Imports of carnauba, other vegetable waxes and essential oils are also important. Imports of all oilseeds and vegetable oils in 1947 amounted to $26; million compared with $171 million in 1929. The following table indicates the quantities and values of these imports in 1947 and 1929, distinguished by broad categories: -,.,.. n4l,1~~ 12",7 million 1922 million million (> Commodity -E2unds iiP pgunds <' '0; Oilsseds , Copra 1,355 107.4 571 24.2 Cas:tor beans 277 24.7 175 6.2 Flaxseed 16 1.9 1,357 46~5 others Total ---2k 1,702 --2...l 139.3 -- 56 2,159 _2.:.2 79 .. 4 Vegetable oi1s and waxes Tung oil 122 35.4 120 15.0 Linseed oil 123 36.5 10 0.7 Palm oil 63 9.6 262 17.5 Coconl.1t oil 26 4.5 412 29.5 Carnauba & other vega waxes 24 18.1 11 2.2 Essential oils 6 13.5 7 7.6 other vegetable oils ~ ~ m 19.0 Total 398 126.,1 1,044 91.5 Grand Total 265.4 170.9 . In comparison with 1929 the U"S. import trade in 1947 was characterized by a very low level in imports of fl!Xseed partly offset Qy a high level 1n imports of linseed 0!1, and qy a low level in imports of £~put oil largely offset by a high level· in imports of copri_ The shift from flaxseed to 70. linseed oil is due partly to the policy of the government of Argentina (the principal supplying area) which intends to stimulate the exports of linseed oil instead of flaxseed, partly to the notable expansion in the U.S. production of flaxseed which occurred during the war (stimulated by high government-supported prices) and constitutes at present one of the objectives of the U.S. Government support policy. The shift from coconut oil to copra is due, on the other hand, to the heavy war damage suffered by the coconut oil industry in the Philippines (the principal supplier) so that only imports of copra are at present possible on a large scale. Assuming approximate oil yields of 6) and 34 per cent, respectively, for copra and flaxseed, the fo11owing total s~pply of coconut oil and linseed oil from foreign sources was available in the U.S. in 1947 compared with 1929 (million pounds): Oil yields fram copra 853 359 Plus coconut oil imports 26 ill Total 879 771 Oil yield from flaxseed 5 460 Plus linseed oil imports 123 _10 Total 128 470 The table shows that the supply of coconut 011 from abroad in 1947 was above the 1929 level, whereas the supply of linseed oil was far below the 1929 level. Supposing a continuation of U.S. government support of domestic flaxseed production at the 1948 level, no increase in imports either of flaxseed or of linseed oil is to be expected in the near future. Instead it is very likely that these imports will drop noticeably, as the most recent trend in imports of linseed oil seems to show. Both in 1949 and 1950 71. the U.S. imports of flaxseed and linseed oil may be estimated at very low levels, say $2 million and $5 million respectively (the annual rates for 1948, based on the trade returns for the first semester, are $7 million for flaxseed and $1.6 million for linseed 011)11. In the case of coconut oil and copra, on the other hand, an increase in imports of the former and a decrease in imports of the latter are to be expected following the gradual restoration of the processing industry in the Philippines. It is improbable, however, that the prewar proportions of copra and coconut oil imports (50 and 50 per cent) will be restored as buyers have built oil mills on the west coast of the U.S. and crushing in the Philippines is unlikely on an appreciable scale. The most recent trend of these imports suggests that U.S. imports of coconut oil will amount to ISO million pounds valued at $36 million in 1949 and 250 million pounds valued at $50 million in 1950, and that imports of copra will amount to SOO million pounds valued at ~~96 million in 1949 and 700 million pounds valued at $S4 million in 1950. The quantitative figures for 1949 and 1950 give a global supply of coconut oil from foreign sources of some 690 million pounds in both years compared with S79 million in 1947 and 770 million in 1945 (annual rate based on the first semester). This decrease will pre- sumably occur provided the current high price of copra remains unchanged, as assumed in the present estimates, and consequently increased competition from other foreign and domestic oil seeds takes place before enough coconut oil can be obtained from the Philippine~/. 11 Of course, if the support level is lowered, imports may increase. Zl The fact that coconut oil is a strategic material does not seem to change appreciably the situation. 72. Imports of the other important oilseeds such as castor beans, and vegetable oils such as tun~ oil and palm oil may be expected to increase appreciably in the near future both for norm~l requirements and for stockpile purposes. However, whereas an increase in imports of castor beans (coming mainly from Brazil) seems likely, an increase in imports of tung oil (mainly from China) and palm oil (mainly from the Netherlands Indies and Africa) seems doubtful, owing to the very short supply abroad. It is estimated that imports of castor beans will probably amount to 350 million pounds valued at f:~28 million in 1949 and 400 million. pounds valued at $32 million in 1950. Imports of tung oil, assuming a slight easing of the supply situation in the next two years, may be estimated at 140 million pounds valued at 031 million in 1949 and 160 million pounds valued at ~34 million in 1950 (current prices of tung oil are below the 1947 level); those of palm oil at some 75 million pounds valued at $14 mj11ion in 1949 and 90 million pounds valued at ~?16 million in 1950. There remain to be considered carnauba and other vegetable waxes, essential oils, and miscell!Oeous oil~eeds and vegetable oils. From the trend of U.S. imports of waxes and essential oils in the first semester of 1948, it seems reasonable to expect little change in the next two years from the 1947 level, say ~~20 and $14 million, respectively. An appreciable increase is, however, probable in the imports of misoellaneous oi1seeds and vegetable oils, which include several L~portant items (such as rapeseed oil, which is listed as a strategic material to be stockpiled). An estimate, based on the most recent trend, of some $25 million in 1949 and ::~35 million in 1950 appears conservative. 73. The following summary table assembles the estimates of U.S. i~ports of oilseeds and vegetable oils in 1949 and 1950 compared with the actual figures for 1947 (million dollars): 1!l!t1 ~ 1950 Oilseeds Copra 107.4 96 84 Castor beans 24.7 28 32 Flaxseed 1.9 2 2 Vegetable oUs and waxes Tung oil 35.4 31 34 Linseed oil 36.5 5 5 Palm oil 9.6 14 16 Coconut oil 4.5 36 50 Carnauba and other vegetable waxes 18.1 20 20 Essential oils 13.5 14 14 other oilseeds and veg.oils -13.8 --Z2 -1.2 Total 265.4 271 292 Percent increase over 1947 2% 10% The U.S. tariff regime on imports of oilseeds and vegetable oils may be desoribed as follows: (a) some produots, suoh as oopra, tung oil and palm oil, enter the U.S. duty-free, (b) others, such as flaxseed, cooonut oil and linseed oil, are subjeot to speoific duties which are very Iowan an equivalent ad valorem basis. Therefore, it can be said that no problem of tariff policy emerges in this subgroup. However, it must be remembered that some of these products, such as copra and palm oil, are subject to fairly high processing taxes~ll Owing to the fact that vegetable oils, whether used in food or in soap and paints, are to a certain extent inter- ohangeable, these taxes give some advantage to domestioally produced vege- table oils. In view of the present shortage of fats and oils in general, of however, it does not seem that a remova~or a substantial reduction in these taxes would appreciably alter the previous estimates. i7 In the case of palm oil the tax is not levied when the product is used for tin plate. Petroleum and products The bulk of rr. S. imports under this heading is represented by crude petroleum and fuel oils, as shown in the following table, in which imports of petroleum and products into the U. S. in 1947, distinguished by broad categories, are compared with those in 1929 (quantitative and value terms): 1929 million million million million COlmnodi ty bbl. ~ bbl. $ Crude petroleum 104 170.5 79 79.9 .i'uel oils 56 75.2 20 16.5 Other refined oils ~ 14.8 !I 47.2 & petroleum prod. Total 260 • .5 143.6 ~ Not calculated. U. S. production of crude petroleum has had a remarkably strong and sustained rate of growth. Since 1900 it has increased at the rate of 50% or more a decade. Throughout this period. estimates of future production indicated leveling off of the rate of growth and during the twenties there was fear of an imminent decline in production due to exhaustion of reserves_ Subsequently, hOl:lever, a number of oil fields were discovered and production increased enormously_ Later, conservation measures were adopted and are still ih force, which help to keep production at each field close to the rate at which maximum eventual extraction can be achieved. In 1947 the production of crude petroleum broke previous records and exceeded 2 billion barrels, "Thich seems to be the present maximum efficient rate. But, total consumption is following a steeply upward trend so that in 1947 production fell short of consumption, In 1947, the U. S. was for the first time in 25 years on a net import basis: imports of crude petroleum amounted to 104 million barrels, valued at $170 million against exports of 45 million barrels valued at $98 million. In the near future U. S. consumption of crude petroleum is estimated at ,', 75. 2.15-2."2.~ billion barrels or more cOIn!)ared ,dth a domestic production of 2 billion. Imports of some 150-160 million barrels of crude petroleum in 1949 seem, therefore, highly probable. In 1950, imports might increase to some 190-200 million barrels. Foreign supply seems to be in a position to meet the U. S. demand. In 1947 U. Sa. imports of crude petroleum, ,,'hieh are duty-free but subject to an import excise tax, came almost entirely from Latin American countries, namely Venezuela. COlombia and Mexico. There are good reasons to believe that they will continue to come mainly from those areas. The problem, therefore, is to examine whether or not Latin American countries ",ill be able to meet U. S. demand in the next h,O years.. Now, it seems that production of crude netro~t'tm in Venezuela is increasing at the rate of 10% a year, whereas the production in COlombia and Mexico is fairly stationary. Production in Venezuela amounted to 434 million barrels in 1947; this amount would increase, at the observed rate, to 477 million in 1948, 524 million in 1949 and 576 million in 1950, the increase above the 1947 level 'being 90 billion barrels in 1949 and 142 lillian barrels in 1950. Assuming tpat 2/3 of these increases are directed toward the U. S•• imports of crude petroleum of some 160 million barrels in 1949 and 195 million barrels in 1950, compared with 104 million barrels in 1947, appear possible. Of course some imports could also come from the JvIiddle East .. In the following estimates, however. it is assumed that these imports will be negligible in the next two years. on the grounds that exports from the Middle East go principally to Europe~ At current prices the previous quanti tattve' figures give $;50 million in 1949 and $430 mill 1. on in 1950. U~ S, imports of fuel oils (residual fuel oils) which are again duty-free but subject to an import excise tax, o~iginated in 1947 mainly in Curacao. It may be expected that imports of fuel oil will run at high 76. levels if domestic refineries lack sufficient supplies of crude petroleum. Assuming, a large expansion in U. S. imports of crude petroleum in the next two years, imports of fuel oil need not necessarily increase~ However, 1 t must be considered that imports of fuel oil depe.nd also on the relative costs of refining crude in the U. S. and in other countries, especially those which themselves produce crude petroleum or til,re geographically very close to the producing areas (such as Curacao.) Foreign prices of fuel oil have increased sharply in the last few months, sO that it seems reasonable to put U. S. imports of fuel oil in 1949 and 1950 below the level of 1947, say 50 million barrels valued at $100 million in 1949 and 40 million barrels valued at $80 million in.1950 (current prices). A slight decrease is to be expected, also, in imports of ptisceUlineoUB petroleum products, which may therefore be estimated at some $15 million (current prices) both in 1949 and 1950. The proba\le U. S. imports of petroleum and ~roducts in 1949 and 1950 are indicated in the follolflingsUmmary table and compared'Viith the actual figures for 1947 (million dollars): l2!±Z. ~ 12.2Q Crude petroleum 170.5 3.50 43 0 Fuel oils 75.2 100 80 Other petroleum products 14.. 8 .Jj, Ji Total 260.5 465 525 Percent increase over 1947 78% 1015b Precious stones U. S. imports of precious and semi-precious stones, which consist mainly of diamonds, amounted in 194'7 to $125 million compared 1J>ri th $79. million in 1929. The following table indicat~s imports in this subgroup in 1947 and 1929 distinguished by broad categories. Industrial diamonds have been shown separately. ?? 1947 1929 Commodity thousand million thousand million $ §? Industrial diamonds (carat) 4,036 13.1 4'7 4.1 Other diamonds (carat) 1,423 96.9 7'71 51.9 Other precious and semi- precious stones and imitations !!I 14.8 iJ 23.6 Total 124.8 79.6 ~ Not calculated. The very high level of U. S. imports of industrial dlamonds (which are duty-free) in 1947 compared with 1929 is entirely due to the tremendously increased use of diamonds in the industrial field. During the war, particularly, new uses and new methods of application of industrial diamonds were developed and industry became more widely acquainted with the results that can be achieved from their use. It is expected that the use of industrial diamonds will continue to increase more rapidly than total industrial production~ In these circumstances, and taking into account, also, the backlog of demand from the war and postwar shortage, U. S. imports of industrial diamonds for normal reqUirements in the near future may run well above the 1947 level, say at 10 or 11 million carats. However, this increase depends on supp1y conditions in the exporting countries (mainly South Africa and Belgian Congo) and also on the policy of the South African Diamond Syndicate (Diamond Trading Company). Looking at the trade returns for the first six months of 1948, which show an annual rate of 11 million carats, it does not seem that either the supply situation or the Doliey of the Diamond Syndicate are likely to hold do~m exports of industrial diamonds to the U, S. Imports into the U. S. may therefore be estimated at some 12 million carats valued at $38 million in 1949 and at 13 million carats valued at $40 million in 1950. including purchases for normal requirements and purcr~ses for the national stockpile, 78. Of course the expansion in imports of industrial diamonds will affect to a certain extent the U. S. imports of other diamonds (rough or uncut and cut but unset) which are used for jewelry purposes. It must be remembered, furthermore, that in this field the domestic needs accumulated during the war have been largely met by the heavy imports in 1946. In 1948 imports of diamonds for jewe1r,y are running at an annual rate of 1,250 million carats. On the beet hypothesis they would probably amount to 1,;00 million carats valued at $104 million in 1949 and to 1,350 million . carats valued at $108 million in 1950 (current prices and current distribution between uncut and cut but unset diamonds). Incidentally. it is worth mentioning that imports of cut diamonds are charged a duty of 10% ad valorem, whereas those of uncut diamonds are duty-free. Owing to the nature of the demand for cut diamonds, it is clear t~at no tariff reduction could appreciably affect imports. Imports of other precious and semi-precious stones (such as pearls) and imitations, into the U. S. in the next two years may be estimated at a level ver,y close to that of 1947, say $15 million. This estimate is based on a projection of the most recent trend. The following table summarizes our estimates of U. S. imports of precious and semi-precious stones in 1949 and 1950 compared with the actual figures for 1947 (million dollars): ~ 1249 l2iQ Industrial diamonds 13.1 38 40 Other diamonds 96.9 104 lOS Other precious and semi- precious stones and imitations 14.S ..Ji --ll Total 124.8 157 163 Percent increase over 1947 26% 31% 79. Vegetable fibers other than cotton, ,jute. etc •. U. S. imnorts of vegetable fibers other than cotton, jute, flax, hemp, and ramie amounted in 1947 to $82 million compared with $47 million in 1929. Theyconsisted mainly of raw sisal, henequen and manila or abaca. The subgroup includes also some manufactures of various vegetable fibers other than tho~e mentioned above. The following table indicates the quantities and values of U. S. imports in the subgroup in 1947 and 1929, distinguished by broad categories. Commodity thousand million thousand million tons $ . tons .$ Sisal and henequen 117 :31.5 135 21.,1 Manila or abaca 78 29.5 72 13.5 Other vegetable fibers 28 6.0 31 5.6 Manufactures t:J lir.1 !M ,..k.Q Total 82.1 47.2 ~ Not calculated. Imports of sisal and henequen (the latter is a product botanically related to the former) come mainly from Mexico, Haiti and Tanganyika, and enter the U. S. dutY~fr~ They are used for binder twine, padd~ng for upholstery and mattresses, cords, etc. As they are to a large extent interchangeable with manila or abaca (mainly from the Philippines) imports may increase in the near future pending a restoration of the production of abaca in the Philippines, which seems to be proceeding rather slowly. Moreover, sisal is listed by t~e V~nitions Board as a strategic material to be stockpiled. It seems, therefore, reasor~ble to estimate U. S. imports of these fibers at 150,000 tons va1l 1ed at $4.5 million in 1949 and at some 170,000 tons valued at $51 million in 1950. Imports of manila or abaca which again are duty-free, can be expected to increase considerably if the supply situation improves. 80. To ",hat extent -this improvement will take place in the next few years is, however, difficult to say. From trade returns for the first six months of 1948 it appears that imports into the U. S. are, at present, below the 1947 level, which points to a supply situation which is still very tight. Assuming a slight improvement in the supply situation in the next two years, imports may be estimated at some 80,000 tons valued at $34 million in 1949 and at some 100,000 tons valued at $42 million in 195ol{ Imports of both miscellaneous vegetable fibers and manufactures, some of which are duty-free and others subject to specific and ad valorem duties (in some cases fairly high). may be put on the best hypothesis at the 1947 level, say $6 million and $15 million both in 1949 and 1950. These estimates have been based on the assumption of a slight improvement of the most recent trend, which seems to show a decline in these imports. The following table summarizes the previous results about the probable amount of U. S. imports of vegetable fibers other than cotton, jute, etc., and manufactures in 1949 and 1950. The estimates for the next two years are compared with the actual figures for 1947 (million dollars): ~ ~ ~ Sisal and henequen 31.5 45 51 Manila and a~aca 29.5 34 42 Other vegetable fibers 6.0 6 6 Manufactures .l2..tl. J.2. -12. Total 82.1 100 114 Percent increase over 1947 22% 39% It might be that a substantial reduction in duties on manufactures could increase their imports somewhat, but certainly not to any appreciable extent. The global figures of the table could be raised, in these circumstances, to $105 and $120 million respectively. !l ~Ianila or abaca is also a strategic material to be stockpiled in the U. S. 81. Naval stores. gums and resins U. s. imports of naval stores, gums and resins amounted in 1947 to $43 million as compared to $36 million in 1929. The prinCipal items in this subgroup are crude lac, unbleached shellac and crude chicle. Distin- guished in broad categories imports of naval stores, gums and resins into the U. S. in 1947 are indicated in the following table (quantitative and value terms) and compared with 1929: 1242 1222 Commodity million million million million pounds $ pounds $ Crude lac 19 6.9 8 2.6 Unbleached shellac 22 10.5 33 12.8 Crude chicle 14 11.8 6.6 Other gums and resins 61W 14.1 11J 8 a 15.6 Total 116 43 .. 3 139 35.6 ~ Does not include some minor items .. Crude lac and unbleaghed shellac, which enter the U. S. duty-free, are, respectively, a resinous incrustation ~roduced by certain insects on the twigs of various species of trees in India and neighboring countries, and a product obtained b.Y the first processing of the former. The principal uses of lacs and shellacs are in the manufacture of spirit varnishes and the production of phonograph records. Shellac is also used in molded parts and insulating coatings on electrical goods, in molded articles such as buttons, etc., in sealing wax, leather and shoe dressing, etc. Although during the war some substitutes for shellac were produced in the U. S., it does not seem tr~t at present they will offer serious competition to shellac.. Before the war. impo~ts of crude lac and unbleached shellac averaged some 35 million pounds a year~ The quantity imported in 1947, namely 41 million pounds, is therefore above the prewar average. However, 82. there are good reasons to expect a further increase .in these imports in the near future as a result of the increased domestic consumption and the considerable backlog demand. Already in 1948 the annual rate was 52 million pounds. It seems safe to expect by 1949 and 1950 imports of some 55 and 60 million pounds, respectively. As moreover. shellac is listed by the Munitions Board as a strategic material to be stockpiled, the previous figures may be raised to 58 and 63 million pounds for 1949 and 1950. At current prices and assuming, as in 1948 an equal distribution between lac and shellac, these quantities giv~ $11 million in 1949 and $12 million in 1950, for imports of crude lac, and $13 million in 1949 and $14 million in 1950 fer imports of unbleached shellac. Crude chicle. which again enters the U. S. duty-free, is a gum imported from Mexico and some Central American countries. It is primarily used in the manufacture of chewing gum. The most recent trend of these imports has been sharply downward. On the best hypothesis, therefore, their value in the next two years may be estimated at the level of the 1948 annual rate, say $5 million. It is very difficult to make a generalization on the urobable trend of the U. S. imports of other ggms and resins, such as tragacanth, leche capsi. crude balsams, damar etc., which enter the U. S. generally duty-free. Considering the various uses of these products in ~~ manufactures t it may be reasonably expected that their imports will increase in the next two years. At their current prices. wtich are somewhat lower than in 1947, the value of U. S. imports in 1949 will probably be close to that in 1947, say $16 million, whereas it may rise to some $18 million in 1950. 83 .. The following table ~marizes the previous estimates of U. s. imports of naval stores, gums and resins in 1949 and 1950 compared with the actual figures for 1947 (million dollars): ~ ~ W.Q. Crude lac 6.9 11 12 Unbleached shellac 10 •.5 13 14 Crude chicle 11.8 .5 .5 Other gums & resins &l 16 l.§. 49 ~ Total 43.3 Percent increase over 1947 ...,. 13% Conclus~ons The probable values of U. S. imports of the commodities included in Group II (7 subgroups) in 1949 and 19.50 are assembled in the following s'\llIIm8.l'y table, in which the estimates for the next two years are compared with the actual figures for 1947. ; Millions of Dollars: Percent increase: Percent of total SUbgrou:es i : 1947 1949. i~950 :. !220 ovel: 19.!t7 : increase from 1947 to 1950 Non-ferrous metals and ferro-alloys SiS 802 89.5 : 74 47.6 Rubber and manufactures 326 332 377 16 6.4 Oileeeds and vega oils Petroleum and • 265 ~ 271 292 10 · • ).4 products : 260 Precious stones: 125 465 1S7 52.5 163 101 31 · • · • 33~2 4.'7 Vegetable fibers other than cotton, jute, flax. hemp and ramie ..• 82 100 114 )9 :. 4.0 Naval stores, gums and resins 43 45 49 13 · • .7 Total 1.616 2,172 2,41.5 49 100.0% The table shows that the largest percent increases over 1947 will probably occur in the categories of. petroleum and no.n-ferrous metals and ferro-alloys. The absolute increases are greatest in the same categories, non-ferrous metals and ferro-alloys having, however, the lead. From the analysis it emerges that the expansion inU. S. imports depends in this group. much more than in Group It upon the restoration and increase of production abroad. This factor will influence more or less all categories in Group H. In this group, a sUbstantial reduction inU. S. duties would affect the volume of imports much less' than in Group I. vii th such a reduction the nrevious global figures could be rounded to $2,180 million and $2,425 million respectively, the increase being almost entirely due to the possible expansion in imports of manufactures of vegetable fi'bers other than cotton, jute, etc. The following table distinguishes the nrobable amount of U. s. imports of the commodities in Group II in 1949 and 1950 in the two case~ no reduction of duties and a substantial tariff reduction (million dollars): Percent increase ~ ~ l22Q in 1950 over 1242 7 Subgroups with no reduction of duties 1,616 2,172 2,415 49% 7 Subgroups wi th a substantial reduction of duties 1,616 2,180 2,425 50% tncreaEfe due .to thet. t-eduction' 'of dutiea .... 8 10 0.6% The present analysis does not consider the possible increase in U. S. imports if domestic taxes (such as those on the nrocessing of some foreign oilseeds and vegetable oils) are removed. But it does not seem, generally speaking. that the effects of such a removal would be sizeable. 85. SUMMARY OF SECTION III. Section III deals in detail with the following subgroups of U.S. imports: (1) sugar and related ~roductsf (2) unmanufactured wool, (3) beverages, (4) unmanufactured cotton, (5) clocks and watches, (6) leather and manu- factures, (7) wool manufactures, (8) cotton manufactures, (9) flax. hemp, and ramie and manufactures thereof. (10) meat products. The estimated value of these imports is $1,259 million in 1949 and $1,346 million in 1950 compared with $995 million in 1947. A fairly large increase is e~ected in imports of raw wool, textile manUfactures in general, leather manufactures, meat products. and beverages, but little or no increase in imp~rts of sugar and related ~roducts, raw cotton and clocks and watches. Allowing for the impact of the normal increase in the U, S. population together with a very slight increase in the ~er ca~ita consump- tion, U, S. imports of raw wool have been estimated at $330 million in 1949 and $351 million in 1950 as compared to $225 million in 1947. These estimates are based also on the assumption that domestic production will remain.unchanged at the current level and, furthermore, that foreign producers (mainly Australia, Uruguay, Argentina, India) will be able to meet the U. S. demand. No increase is e:rreoctadd.n -imports of raw cotton, '''hich are restricted by absolute quotas. These quotas, although limited to certain types of cotton, are sufficient to hold dOt-m the level of total U. S" imports of raw cotton, and are likely to remain in force in the near future, With the restoration of production in the traditional exporting countries. mainly Europe, a sharp increase is to be expected in U. S. imports of wool, cotton, and flax manufactures. Imports of wool manufactures have been estimated at $63 million in 1949 and $81 million in 1950 compared with $35 million in 1947; those of cotton manufactures at $55 and $71 million. respectively, against $26 million in 1947; those of flax. hemp and ramie manufactures at ~40and $50 million, respectively, against $30 million in 1947. These estimates are baaed generally on a very conservative prOjection of the most recent trends. Also dependent upon the restoration of production in Europe are U. S. imports of leather manufactures (such as shoes, gloves. pags. etc.) These imports. including leather, would probably run at $43 million in 1949 and $52 million in 1950 compared with $30 million in 1947. In the $Ubgroup of meat products, U. S. imports will primarily increase in the categories of prepared and preserved meats, in consequence of the strong domestic demand. No increase is to be. expected in imports of fresh and frozen meat which are largely barred by the sanitary embargo on shipments from Latin American countries. As a whole,_ U~ S. imports of meat products have been estimated at $63 million in 1949 and ~58 million 86. in 1950 compared with $23 million in 1947 •. The drop from 1949 to 1950 is based on the expected increase in the domestic supply of meat by 1950. U. 'S. imports of beverages (mainly whisky) will probably amount to $93 million in 1949 and $106 million in 1950 compared with $70 million in 1947. The increase will be due primarily to the high domestic consumption of beverages in general at the current level of national income. A drop is to be expected in imports of cane sugar on the assumption that the current absolute quota for domestic areas (~~1th is fairly high) remains unchanged in the next two years. Assuming an appreciable increase in the imports of inedible molasses, U. S. imports in the subgroup have been estimated at $454 million in 1949 and $459 million in 1950 as compared to $445 million in 1947. Presumably imports of watches and clocks will remain more or less unchanged. The largest per cent increases in 1950 over 1947 will probably occur in imports of textile manufactures. meat products. leather manufactures and raw wool. The largest absolute increases from 1947 to 1950 will probably occur in imports of raw wool. wool and cotton manufactures. beverages and meat products. These fiv~ subgroups represent 82% of the estimated total net increase from 1947 to 1950. The largest share of the benefit is expected to accrue ~o European countries (primarily United Kin~dom), some Latln American countries (such as Argentina and Uruguay), Canada and Australia. A further substantial reduction in U. S. duties might be more beneficial in the subgroups of this section than in the subgroups examined in the previous sections. It has been calculated that U. S. imports would amount to $1,470 million in 1949 and $1,550 million in 1950 with such ~eduotions, the net increase due to tariff reductions being about $200 million. The other U. S. restriotions, such as absolute-quotas and sanitary embargo, have been assumed to be unchanged. 87. SECTION III The analysis of this section will refer to the U. S. imports which have been included in Group III. n~~ely: 1) sugar and rela~ed products; 2) unmanufactured wool; 3) beverages; 4) unmanufactured cotton; 5) clocks and watches; 6) leather and manufactures; 7) wool manufactures; 8) cotton manufactures; 9) flax, hemp and ramie manufactures; 10) meat products. In this list of commodities there are a number of manufactured products. Any analysis of the future trend of U. S. imports of manufactured products is bound to meet greater difficulties than that dealing with the trend of imports of unmanufactured products. The reasons are obvious. It is enough to point out that the number of variables to deal with is, generally speaking, greater in the case of finished prod~cts than in the case of raw materials or crude foodstuffs. For instance, the picture is now complicated by the fact that U. S. duties on manufactures are still fairly high, although reduced somewhat at the Geneva Agreement. Furthermore, nearly all the abovementioned goods coming from abroad compete with similar goods produced domestically and the outcome of a renewed competition of foreign products (mainly from Europe) in the U, S. is very difficult to predict, For these reasons it must be said from the start that, if the results reached in the previous two sections are largely tentative, the results of this section are still more so, The group includes, however, foodstuffs, such as sugar and meat products, and unmanufactured raw materials, such as wool and cotton. They have been included in the group, because of the various U. S. restrictions which affect somewhat the volume of the U. S. imnort trade along these lines. Compared with imports of manufactured ~roducts, the prediction of the future trend of these imports is easier, under definite assumptions. 88. The present analysis is carried out on the general assum~tlon of no further reduction in duties and of no removal of or change in other U. S. restrictions. However, a brief analysis will be devoted in each case to the pos$ible influence on the volume of imports of any reduction in the U. S. restrictions. whenever of course such a policy may be reasonably expected. Sugar and related products U. S. imuorts of sugar and related ~roducts, which consist mainly of cane sugar, amounted to $445 million in 1947 compared with $230 million in 1929. The following table distinguishes the imports of cane sugar and molasses (inedible) in 1947 and 1929 (quantitative and value terms) from the other imports in the subgroup_ l2 4Z 1222 Commodity million million million million pounds $ pounds $ Cane sugar 8,328 410.5 9,777 209.2 Molasses, inedible 1,135 25.9 2,012 16.0 Other sugar and related prod. r}j 9.1 !}} 4.5 Total 445.5 . 229.7 !!/ Not calculated, Since the beginning of this century, U, S. imports of cane sugar have supplied about half of domestic consumption requirements, coming almost entirely from Cuba and the Philippines. The domestic production was composed of two parts, one supplied by the continental U. S. (beet sugar) the other by the inSUlar areas~ mainly Puerto Rico and Hawaii (cane sugar) • .After ';)1'orld 'l(lar I the structure of trade remained unchanged, although some changes occurred in the shares of the different areas. In the period 1927-30 the share of imports to total consumption increased somewr,a.t. Cuba supplying some 49% of U. S.eonsumption, the Philippines sorre 10% (total iI!lJorts: 59% of consumption). However, the share of imports declined again in the period 1931-33, Cuba supplying 30%, the Philippines 89. 16% (total imports: 46% of consumption). It must be remembered in this connection that Philippine sugar was duty-free and hence was in effect protected by the duty on Cuban and other foreign sugar. After 1933 the volume of imports from the various sourCeS was rigidly controlled by quotas under the U. S. sugar legislation. The system of absolute quotas was introduced with the SUgar Act of 19)4. The reason was to provide a more effective protection to the domestic sugar industry, which could not be achieved by the tariff, Two facts must be mentioned which jeopardized the U. S. sugar industry, namely the excess supply of sugar which has generally characterized the international situation (except during the war) and, secondly, a level of internal prices well above the world markets. In these circumstances, the protection provided by the tariff was only moderate. Since 1934, therefore, the a'solute quota system has replaced the tariff as the effective instrument of national policy. Tariffs on sugar primarily act as a revenue measure~ The quota system, continued 1:,ri th the Sugar Act of 1937, was suspended in April 1942 when it became apparent that the world was shifting from a surplus to a deficit position, but the restrictions were again put into operation as of January 1948 (Sugar Act of 1948). The Sugar Act of 1948 provides fixed quantitative quotas for all domestic supplying areas (i~e. continental U.S., Puerto Rico, Hawaii and Virgin Islands) and the Philipoinea. Any deficiency of domestic or the Philip~ines supply is allocated to Cuba. In thece conditions, the volume of imoorts from Cuba and other foreign countries (except the Philippines) is strictly determined by the efficiency of the domestic sUpplying areas and the Philippines; they are thus a kind of "residual". For instance, the Sugar Act of 1948 established a quota of 4,5 million short tons; (revised as of ~~rch 2, 1948) for domestic supplying areas and the Philippines. At the cu~ent per ca~ita consumption of 105 pounds. this 90. quota would imply imports from Cuba and other areas of some 3 million short ~ons in 1948. Of course, imports from Cuba would re larger if the domestic areas and the Philippines were not able to cover the quota. Supposing these areas to be in a position to cover their quotas and taking into account the Philippines quotao:f' 29QOOO slior.t\ tons" U. S. imports of sugar from abroad, in 1948, would run at some 3,290,000 tons or 6,580 million pounds as compared to 8,328 million pounds in 1947. Now, assuming that in 1949 and 1950 a quota for domestic areas of some 4.2 million short tons (as in 1948) 1s established and assuming~ moreover. that these areas will be able to cover their quotas, imports from Cuba and the Philippines would again be below the 1947 level, even with the increase in the U. S. population and a possible increase in the per capita consumption from 105 to 110 pounds, Under such circumstances, domestic consumption would be around 8,120,000 tons in 1949 and 8,140,000 tons in 1950. T~orta would amount to.3,920,000 tons or 7,840 million peunds in 1949 and 3,940,000 tons or 7,880 million pounds in 1950. At current price~ these quantities give $388 million in 1949 and $390 million in 1950. On the other hand~ the prospects are favorable for inedible-or industri~l molasses, which enters the U. S. subject to very low duties. Before the war imports of TIolasses used to cover about 65% of domestic consumption. coming almost entirely from Cuba and the Dominican Republic. Over half of the industrial molasses consumed in the U. S. is used as a raw material in industrial-alcohol plants. virtually all of the high-test molasses being used for this ~urpose. Its use in livestock feeds is another major outlet. Current domestic aonsumption of industrial molasses might poseibly run at about 3.000 million pounds. Supposing that the prewar ratio of imports to consumption could be restored, imports would amount to 2,000 million pounds.. This figure is much above that of 91. 1947. However, imports in 1947 were at a low level because there was no high-test molasses produced in Cuba or the Dominican Republic. The U. S. trade returns for the first six months of 1948 show a sharp increase in imports of inedi'tle molasses (the annual rate is 1,720 million pounds) which seems to indicate a resumption of tr~t production. In these conditions. it may be expected that U. S. imports of industrial molasses wUl ).e at high levels in the next two years. although an increasing quantity of the product is used in Cuba for the production of alcchol. Conservatively U. s. imports may be estimated at 1,800 million pounds valued at $57 million in 1949 and 1,900 million pounds valued at $60 million in 1950. Turning to U. S. imports of other sugar and related products, the most recent trend shows quite clearly that no increase in these imports is to be expected in the next two years. It is estimated, optimistically, that they will run in 1949 and 1950 at the same level as in 1947, say $9 million. The following table summarizes the previous results comparing them with the actual figures for 1947 (million dollars): ~ l2!±2 1-.22Q Cane sugar 410.5 388 390 Molasses, inedible 25.9 57 60 Other sugar and related 9.. 1 9 -:9 products Total 445.5 454 459 Percent inorease over 1947 2$ 35v Of course this picture would 'e substantially altered if the U. S. absolute-quota system is removed or if the quotas for domestic supplying areas are reduced appreciably in the next two yeartl. The first possibility seems to be excluded for the time being. As ~ar as the second one is concerned any sort of prediction is at the moment impossible! Unmanufactured wool U. S. imports of unmanufactured wool amounted to 6)1 million pounds 92. (actual weight) valued at $225 million in 1947 as compared to 280 million pounds valued at $87 million in 1929. The following table shows the imports of raw wool in 1947 and 1929 distinguished by broad categories (quantitative and value terms): 1947 1229 Commodity million million million million :pounds ! nounds $ Donskoi, Smyrna, etc.(carpet wool) 214 50.6 17.5 46.9 Woolen types (clothing WOOl) 24 7.8 18 6.9 ·tiorsted types (combing w'ool) 388 163.4 84 31.9 Other (alpaca, mohair, etc.) --2. J-2 ......1 1.6 Total 631 22.5~3 280 87.3 The table shows that U. S. imports of raw wool, in terms of both value and weight, were in 1947 far above the 1929 level. During the inter-war period imports of wool into the U. S. varied widely, depending on the degree of general business activity in the U. S., but the general tendency was downward after 1923, in large part owing to the increase in domestic production of wool and mohair, which rose from about 220 million pounds (actual weight) in 1922 to 400 million pounds in 1939, the increase )elng 82%. Because of the liquidation Qf stock sheep which began in the fall of 1942, domestic production of wool is at present only slightly above that in 1939; it seems to average 4.50 million pounds annually in actual 'Jleight. On the other hand, domestic consumption is much larger than before the war, in part Decause of the higher national income, in part i~cause of the deferred demand for \'Jool fabrics left over from the war period when civilian consu.mption was restricted. Current consumption seems to average 1,2 billion pounds (actual weight). Taking into account the normal increase in the U. S. population in 1949 and 19.50, and a probable increase in the per capita consumption from 8.2.5 pounds (actual weight) to 8~.50 pounds in 1949 and 8.7.5 pounds in 19.50. U. S. imports of unmanufactured wool as a ,..,rhole may 93. be estimated at around 800 million pounds in 1949 and 850 million pounds in 1950, on the assumption of an unchanged domestic nroduction. These figures compare with an annual rate for 1948 (based on the trade returns ]J for the first six months) of 750 million pounds. Now, two problems have to be discussed: (a) ho"" the estimated total voluMe of imports will be distributed among the different types of wool products, (r,) whether or not the foreign producers \'1111 be in a position to meet U. S. demand. For the distribution of U. S. imports of wool in 1949 and 1950, the distribution in the first six months of 1948, which shows a sharp increase in the share going to Doneko!, Smyrna, etc. wools compared i'd. th 1947, will be assumed. It gives the following results. The values are computed at the average current foreign unit prices for each category. 1242 1250 Commodities million million million million 'Oounds ~ :Qounds ~ Donsko!, Smyrna, etc. (carpet "'001) 360 108 382 115 Clothing wool 34 14 37 15 Combing wool 400 200 425 213 Other (alpaca, mohair, etc.) 6 -1! 6 2 Total 800 330 850 351 in th regard to the supply abroad, it seems that it "'Till be in a position to meet the U. S. demand. In 1947, U. S. imports of wool Came primarily from Argentina, Uruguay, AUstralia, and India. Some of these others now of minor importance \,,111 presumably expand their exports of raw wool to the U. 5. in the next two years~ The precedIng figures may therefore be taken as the most probable figures. 1I Corrected for seasonal Variations (1947 as a term of reference). 94. The following table compares our estimates with the actual figures for 1947 (million dollars): 1.2!!Z ~ illQ. Donskoi, Smyrna, etc.{earpet wool) 29.6 108 115 Olothing wool 16.1 14 15 Combing wool 175.7 200 213 Other (alpaca. mohair, etc.) 3.9 -8 8 Total 22.5.3 330 3.51 Percent increase over 1947 47% 561j A few words will be devoted now to the U. S. tariff regime on wool imports. Imports of lower grades of unmanufactured wool, "Then bonded to be used in the manufacture of press cloth, rugs, carpets or any other floor covering, are duty-free. All other im~orts are subject to specific duties. The current rates of duty are still very high on an equivalent ad valorem basis, notwithstanding the double effect of the reduction of duties through trade agreements (including the Geneva Agreement) and the increase in international prices. The equivalent ad valorem of the current duties is, on the average, well above 30%, compared with some 85% before the war~ It is commonly admitted that a SUbstantial reduction in the duties on wool would doubtless have a marked effect in increasing imports and reducing domestic production. Assuming that imports in 1949 and 1950 would both increase under such circumstances by some 1.50 million pounds (actual weight) and, moreover, that the increase would occur mainly in the category of '.ITorated types, the previous figures would be raised to about $390 and $~10 million, respectively, the net increase due to tariff reduction being approximately $60 million~ Beverages , U. S. imports of beverages amounted to $70 million in 1947. No comparison is possible with 1929 in as much as imports of alcoholic 95. beverages were then barred by prohibi tion~ The follo\·ring table compares, therefore, imports in 1947 with those in 1939 (quantitative and value terms) distinguishing them in broad categories. Imports of whisky, which are by far the most important. are shown separately. 1242 l2J2 Commodity thousand million thousand million gallons $ gallons $ \,'hisky (proof) 11,001 51.1 9,846 41 •.5 Other distilled spirits (proof) 1,489 6.1 1,.577 6.7 Sparkling wines 241 2~2 560 2•.5 Still wines 1.919 6~6 3,377 6.5 Other beveraees (beer, mineral !Ji 4:1 sJ 2.2 waters, fruit juices, etc.) Total 70,1 .59.4 ~ Not calculated. Since consumption of beverages in general is closely related to the level of national income and moreover, imported beverages are mostly hig~priced uroduots (which implies that the effect of high income upon imports would'probably be somewhat greater than that upon production) a higher volume of imports might have been expected in 1947. The relatively low level of imports seems to be due partly to the heavy internal ta~es and the high rate of duties on these imports, which tend to hold down consumption and a fortiori imports, and partly to the very high prices abroad, especially of wines. Under such circumeta!'ces, an expanid:on in U. S. imports of beverages in general in the next two years is very probable, but presumably it will not be large. Imports of whisky, which represented in 1947 some 73% of the total imports of beverages, come entirely from the United Kingdom and Canada. They used to cover about 9% of domestic consumption before the war. Assuming an increase in per capita consumption and taking account of the increase in population, total consumption may average in the next two years ~ome 140 - 160 million proof gallons~ SuppOsing a higher ratio of 96. of imports to domestic conSQmptlon. say, 10%, in the next two years, imports of whisky may be estimated at some 14 million proof gallons in 1949 and 16 million gallons in 1950. At current prices the value of these imports would be $69 and $78 million, respectively. A similar trend may be ~ected in the case of other distilled spirits, such as brandy, gin,rum, etc. These imports may be :put at LYI million proof gallons in 1949 and 2 million in 1950, valued, respectivel:; t at $9 and $12 million. In contrast, U. S. imports of sparkling wines (mainly from France) will probably continue to be limited by the high level of foreign prices. At best, their value may be slightly above the 1947 value, say $3 million both in 1949 and 1950. The high level of for.eign prices might also [e expected to keep down imports of still wines, which include vermouth. However, in this case the most recent trade returns show a slightly upward trend. Projecting this trend through 19.50, these imports m'3.j be estimated at some 2.2 million gallons valued at $8 million in 1949 and at 2.4 million gallons valued at $9 million in 19.50. No increase is to be expected in U. S. imports of other 'everages. ~efore the war, they consisted partly of special kinds Of beer from Germany and Czechoslovakia, but mainly of fruit juices, malt liquors, etc. from different sources. Their value in 1949 and 19.50 may be estimated at the same level as in 1947 t say $4 million. The following table summarizes the previous estimates of U. S. imports of beverages in 1949 and 19.50 and compares them with the actual figures for 1947 (million dollars): ~ ~ 1950 \fuisky 51.1 69 78 Other dis tilled spirits 6.1 9 12 Sparkl ing wi nee 2.2 3 J Still· wines 6.6 8 9 97. ~ ~ 19:2 0 Other beverages 4.1 4 4 Total 70.1 93 106 Percent increase over 1947 33% .5110 It has been mentioned before that two of the reasons for the relatively low level of U. S. imports of beverages are the high rates of duties (which are all specific but, on the whole, well above 35% on a current equivalent ad valorem basis) and the hea",. internal taxes (,,,hich are particularly high in the case of distilled liquors). However, most of the duties on alcoholic beverages were much reduced by the Geneva Agreement. Now, although the duties are small compared with the taxes, and therefore a~ reduction in the former will probably not increase domestic consumption, it is likely that tariff reduction will increase somewhat the ratio of imports to domestic consumption. U. S. trade returns for the first six months do not show any appreciable increase in imports of beverages, but the possibility cannot be excluded that in a longer period, say by 1949 or 19.50, the effects of the reduction conceded at Geneva ~dll be felt. Our estimates take account of these long-range effects. Needless to say, another SUbstantial reduction in duties could stimulate U. S. imports of beverages still further, say by 20% or approxima. tely $2.5 million. UnmanufaQtured cotton U. S. imports of unmanufactured cotton consist partly of long- staple raw cotton (extra-long staple raw cotton for thread and fine clothes almost entirely imported from Egypt) I partly of short-staple ra'f,ol cotton, mainly from India and Mexico. In 1947, U. S. imports of raw cotton amounted to 214 million pounds valued at $5.5 million compared with 223 million pounds valued at $.53 million in 1929. The following table indicates the imports of raw cotton in these two years (~antitative and value terms): 98. Oommodity million million pounds 1242 m million million pounds 1222 , Long staple raw ootton 83 33.5 52 17.7 Short staple raw ootton 86 18.2 171 35.6 Ootton linters .J:!i ~ -IJ ~ Total 214 55!? 223 53.3 §J P~e8UJ1l8bly inoluded in the previous oategories," Imports of ]'09& staple raw c2.tton in 1947 \-Tere in terms of both weight and value. above the 1929 level. Long~staple cottons are used for combed yarns which go into lawns and other fine clothes, uniform twills and other army fa,rics, thread, under,,,ear and hosiery. In the last few years consumption in the U. S. has followed a downward trend, this decline being attributed to improvements in spinning processes, which make possible the use of shorter fibers where longer ones were previously required. Moreove~ because of improvement in quality rayon has displaced long-staple cotton in certain uses. In these Circumstances, any expansion in U. S. imports of long- staple raw cotton above the 1947 level seems problematical. However, it must be noted that at current prices in the U. S. (which are fairly high, oompared with world prices. as a result of the U. S. Government price- ~~p.rt program) imports of long-staples from Egypt might increase some- what shOUld present restrictions 'be removed. These restrictions consist of an a'isolute quota of 45.6 million pounds, which is limited, however, to ootton having a staple of 1/1/8 but not more than 1 11/16 inche~ in length. In 1947 the quota was entirely covered and perhaps exceeded. Assuming an unchanged absolute quota in 1949 and 1950, and the continuation of the U. S~ Government price-support program, imports of long-staple raw cotton may be estimated at 80 million pounds valued at $34 million in both years. t 99. An increase in the U. S. imports of short-staple ra\" cotton, in the next two years also seems unlikely. For the U. S. is the world's largest producer of raw cotton (mainly short-staple) and its crops have snpplied and are expected to supply an adequate quantity for the domestic market whatever may be the increase in domestic consumptlonl! However, in this category, as for long- staple raw cotton, an increase in imports would take place if no restrictions were in force. Here again t the U. S. government policy of price support was combined with the establishment of an absolute quota of some 14.5 million pounds. which does not include harsh or rough cotton less than 3/4 inch in staple length. In 1947 the quota was entirely covered. Assum1ng similar conditions in 1949 and 1950, U. S. imports o£ raw cotton could be estimated at some 85 million pounds in both years. However. 1t is probable that an increase will occur in imports of harsh or rough oat ton less than 3/4 inch in length which is no~ produced domestically and is very low pricedl the preTiou8 figure may be conser.atiTel1 . raised to 95 =11110n pounds valued at $16 , , million (current prices, which are below the 1947 level). The most reCEnt trend seems to show an 1ncrease ,1n imports of gotton linjiers, Linters are, in the U, S., a by.... product of the cottonseed-oil industry and their quan~lty depends, therefore, on the,size of 'the cotton crop. In view of 'the huge U. S. oat ton crop, the most recent trend in import~ of cotton 11 The estimated crop for 1948 is 15.2 million bales or 7.6 billion pounds as against 8.6 million bales or 4.) blll1en pound, in 1946. 100. linters is due entirely to the sharp decrease in foreign prices •. It seems that the value of these imports will not exceed SUbstantially t;;e 1947 level. The value of $5 million is assumed for both 1949 and 1950. The following table gives the estimated value of U. S. imports of raw cotton in 1949 and 1950 compared with the actual figures for 1947 (million dollars): ~ 1949 1.2iQ. Long sta:;>le rat., cotton 33.5 34 34 Short staple raw cotton 18.2 16 16 Cotton linters 4.0 .2 .2 Tota.l 55.7 55 55 Percent increase over 1947 The U. S. tariff regime on raw cotton can be described as follows~ (a) imports of long-staple raw cotton are subject to low specific duties but are limited, as mentioned before, by an absolute quota t (1:) imports of short-staple rm" cotton are duty-free but subject again to an absolute quota~ (c) imports of cotton linters are duty-free and are not limited ~y abSOlute quotas. For the reasons previously mentioned it seems that an increase in the quotas ""auld affec t Uo So imports of ra\>l cotton. In this event, it is highly pro·bable that imports would increase up to the limit of the new ~uotaj given a continuation of the U. S. Government price-supDort policy. Should the quotas be removed or, conversely, shOUld the present policy be dia- continued, the picture would be substantially altered. Both these possibil~ ties seem. hO'!rlever, to be out of q1.lestion for the time being. 101. Clocks and watches U. S. tmports of clocks and ~atches, which consist mainly of watches and watch movements, amounted to $55 million in 1947 as oompared to $17 million in 1929. They came entirely from Switzerland, whose industry, in this field, is very well known. Imports of clocks and watches are closely related to national income; in 1947 they were approximately at their II normal" level in this respect. The number of watches and movements imported ,~s 7.8 million as compared to 5.1 million in 1929, the increase being 53%. The values in the two years were respectively $4).5 and $11.7 million, the increase being 272%. In these circumstances, a further increase in U. S. imports of clocks and watches from Switzerland seems to be exoluded. Only a reduction in duties which are various and high, although specific, could stimulate imports appreciably, particularly of cheap jeweled "latches for which the current duties are comparatively more restrictive. It remains to be seen, however, whether or not such a reduction is in the realm of possibility. There are good reasons to believe that it is not. The question of an abSOlute quota on the imports of clocks and watches from Switzerland was discussed recently. Finally the proposed quota . system was abandoned on the tacit assumption -- that imports from S1t11tzerland would be kept within certain limits. These limits are unofficially established by the Swiss Government itself '~ri th the specific purpose of a~oiding unfavorable reactions from the American producers. It is qilil.d;~ ~~aI .that in th~'se co~lU.ti0ns, a- tt\:rU"freauctio-n is out of the-question. It is estimated that in the most favorable circumstances U. S. imports of clocks and watches would not exceed $60 million in 1949 . and 1950, an increase over 1947 of 9%. 102. Leather and manufactures U.S. imports of leather manufactures amounted to $30 million in 1947 compared ,,'1 th $86 million in 1929. They include a large variety of commodities "'hich are assembled in broad categories in the folloFing table. The table indice.te~ the ouanti ties end values of these u.s. imuorts in 1947 end 1929: 1942 1229 thousand million thouspnd million Commodity $ ... ...L- Lea,ther g./ 18.7 a/ 44.6 Boots, shoes A other footwear (pr) 1.70) 6.6 8,359 18.7 Gloves (pr) 898 1.8 17,)89 16.5 Other leather manuf. ~ 1.2 a/ 6.2 Total )0.) 36.0 gJ Not calculated. Imuorts of leather include many i tams "rhich may be classified into four main groups: cettlehide leather, calf and kip, goat and kid, sheep Emd lamb leathers. Lea,ther may also be classified by use, such A,S for foob,'ear; industrial belting; he.rness and sP,dclt:ry; uuholstery; bag, case and strr-.p; luggage and t')ocketbook; end glove and garment leathers. A~proximately 85t of all leather consumed in the U.S. 1s used in the production of foot,·'ear. As the nroduction of lee,ther of all kinds is limited by the available su,)1;ly o"f hides pnd skins, of "'hieh there is a relp.ti va shortpge in the U.S., a substantiel increase in il"1uorts of leether in the near future might be eXDected. However. i t 1\'as assumed in Section I (see pare,gra:ph on hides and. skins) that U.S. imports of hides end skins ,,'auld increase substantially in the next t1"O years. In such circum- stances, American tanners "rould be able to obtain from abroe,d the sup-olies of hides necessary to make good the deficiency of domestic hides and skins, a,net therefore an appreciable increase in imports 103. of leather seems unlikely. Of co .rse this si tu".tion l"ill not -)revent U.S. imports of leather from increasing some'·'!',.e,t under the pressure of the high domestic demand. It is conservatively estima.ted. th6t they ,dl1 amount to $23 million in 19!~9 and '25 million in 1950 compared ,,'1 th :18 million in 194 7 and an annual rate of some S21 million in 19LJ,g (based on the returns of the first six months). Imryorts of leather h~ve come, in the past. principally from the United Kingdom. France. and the lietherlends, but iil" .the. future. other count.ries such as Argentina l'\nd Brazil ma.y become aUP')liers I even the main ones. ,·'ith rega,rel to imports of foot"'e1'lr in gener1'll, i t must be noted from the start that the re,tio of these im1')orts to total tT.S, consum'Otion was negligible in the last fe 1" years before the "'ar, compared ,,'i th the tl·'enties. In vie'" of the high efficiency of the domestic industT'iT, which can at .oresent produce footl·'e~u:" 8,t veT'lr 1m" cost, it seems doubt- ful that imports ~'rill regain, in the future, a posi tion comparable Ni th that of the t'·'enties. Em"ever, an aoryreciable incree,se above the 1947 level would be ~)ossible if full :oroduction in the traditions,! European exporting countries (primarily U.K. and Czechoslov~kia), and more normal com.rnerei~.l re18tionships 1>!l th some of them '\Ioere ~ored,. On these assumptions ~J.S. imports of footvear (all leather) could amount to about 4 - 5 million pairs, VFlued at some 325-30 million, sup-;Jodng a ratio of imports to total consUIDntion close to th::t of the pre"'ar period. It seems, hm,rever, unlikely that such v, volume of imports "'ill enter the U.S. in the next t",o years. The trade returns of the first six months of 1948 do not sho~! a.ny increasing trend, "'1 th the excention of textile shoes ,,'i th sale lerJ,ther ir.P)orted nrirlP,rily from Central America. It is therefore estimated, conservatively, that U.S. imports 104. o:.f foot"'ea,r in general \·-ill amount to some 10 million in 19~·9 ~cl 312 million in 1950. Asub§tontial expansion in l' .S. imnorts could also occur in the ne:rt t~,tO years in the ce.tegories of gloves end miscelbneous ler·ther manufactures (such as luggage, bags, etc.) in "'hich the nronortion of labor reouired for 1Jroductlon Is larger than in the cP,se of foot'·tear so that some foreign countries can produce them at lOI,rer costs. These imports come primarily from E'urope1:Ul countries (France, Italy, C:;;echo- slov€lkia, United Kingdom, etc.) I:'lncl "-ere imnorted into the U.S. in large quanti ties during the tl,'enties and elso before the "'ar. They consisted mainly of ','omen I sand chHdren l s leather gloves. end oub tedly an a 1preciable increase in the!'le imnorts &.bove the 19L.7 level might be exnected Ni th en adequate exuansion of nrodllction abroad flnil a fe.11 in prices. To vhe.t extent, h01,'ever, this '·'ill hp',pnen Is difficult to ~P,y, especially taking Into account the recent development of the U.S. industl'1J. Conservlil.tive1y, U.S. imports are estimated p,t some::lO million in 1949 and G15 million in 1950. The follo1:.ring ta.ble assembles the previous estimates for 19l~9 and 1950 and cmmpares them "1 th the actual figures for 19L17 (million dollars): ~ .. 1250 Leather 18.7 23 25 Boots, shoes & other foot1"ear 6.6 10 12 Gloves 1.8 ) ) Other leather m~nu- )10 )15 factures 3.2 Total 30.3 Percent increDse over 1947 105. In the previous estimates, the effects of the tariff reductions granted'oy the U,S. at the Geneva Agrepment have oeen taken into account. It is "Forth mentioning. however, that duties on leather :md particule.rly on leather manufactures, are still f~.irly high. The rates on boots, shoes nnd other footl,'eer range from 10 to 35%; those on gloves from $4 to $5 per dozen lJairs, "'ith the additional -provision of Cll.tn-ur- lative duties varying from $.50 to $2 per dozen Dairs a.nd urovided thf.'.t minimum ad valorem rates ranging from 25 to 40% 9_re collected. On other leather manufl3,ctures (su.ch ps bags, harnesses, saddles, etc.) the rt.!.tes of duty re..nge from '1i to 25%. The duties on le~tther ?re 1o','er , ra..Tlging from '1~ to 15%. It seems thpt a further substantial reduction in duties "'ould increase ar,roreciably U.S. imports of lef\,ther manufactures, especially of gloves a.nd miscellaneous leather produ.cts. On the whole, it may be estimated tha.t under such circumstances, U.S. imuorts in the sub.srouD could increase by some 50~ Or 8);Y)roximately $20-25 million. 1vool manufactures A large number of items are included in this subgrouo as in the other t"Jo which folloi'~ (cotton and flax, hemp and ramie manufactures). Single estimates for each item i"ould therefore take much time, and more- over ,"ould be purely conjectural mdng to the complicated factors involved in each case. The analysis 1t'ill be, therefore, limited to mp,ior c~ttegories for '·.'hich some sort of '.rorking generelization is possible. U.S. imports of wool manufactures amounted to $35 million in 194'1 compared 1trith 865 million in 1929. The fol101"ing table distinguishes by broad categories U.S. imports in this subgrouP in 1947 and 1 0 29 (quantitative and value terms): 106. thousand million thousand million COmr:1odity $ $ ivoven fabrics of "'001 (lb.) 2,881 9.8 10,037 20.0 ives>ring e>pparel (lb.) 2,064 9.1 ~ 19.9 Carpets (sa. ft.) 14,919 14.9 10,020 21.5 Other 1"001 manufa,ctures ~ 0.6 !!I ~ Tohl 34.6 64.8 ~ Not calculated. Imports of "lOven fabris;s gf ".rogl, ,,'hich included "'orsteds and ,,,,oolens of "'001, mohair and other hair, are sUD"lied ma.inly by the rni ted Kingdom, ,>11 th relatively small amounts in UrePElr years coming from France, Belgium and Germany. Before the 1'-ar they used to cover e. negligible amount of domestic consumption, compl'ued "'ith the tl·'enties. The domestic industry produces mainly the medium-uriced fabrics that constitute the bulk of the demand; the output of high-nrtcecl. f8.brics is relatively sm811. Imports are mainly high-uriceo. fabrics, such as fine Forsted suitings and all-"rool ,,'oolen overCOfttings, but include some lo"'-nriced snecie.l ties such as coarse t,·'eeds. The current high level of national income in the U .c;. implies a tendency tOl"ard B. larger proportion of the highEJr priced fabrics in the domestic consumption. U.S. imports of ,,'oven fabrics of "'001 may therefore be expected to inore8.se in the near future with a ru11 restora- tiOl1 of production in the tradi tiona1 exporting countries, mtitin1y the Un! ted Kingdom. Trade returns for the first six months of 1948 shm·' , in fe"ct, a steep up,·.rard trend. Projecting this trend through 1950, tJ. s. imports of i·'oven fa.brics may be sl':\fely estimated at some 8 million Dounds valued at level in 1947, exceeding the 1929 level by 49% in volume. Yet a considerable increase above the 1947 level seems possible m·dng to the high domestic demand stimulated by the current level of national income. It is assumed that U.S. imDort!:1 of carnets vill run ~:tt some 25 million souare feet velued e>t$20 million in 1949 and at some 28 million sauare feet valued at $22 m:i.llion in 1950. O,,'ing to the ne.ture of the other imports of "'001 manufe,otures (blankets, pile fabrics, knit fe,tries, etc.) no M)1Jrecie,ble increa.se is expected. Their value will probably be around ~~2 million in both 1949 and 1950. The follo\<'ing table summarizes our results and compe,res them 1"ith the actual figures for 1947 (million dollars): l2!±Z. ~ 19')0 'l'loven fabrics of wool 9.8 32 48 Wearing apnarel 9.1 9 9 Carpets 14.9 20 22 Other "'001 manufactures ...Q.& ....G. 2 Total 34.6 63 '31 Percent increase over 1947 82=0 I 134% 108. All imports of "'001 manufa.ctures a.re subject to fairly high duties, Fhich are mixed in the CEl,se of If'oven fabrics and wearing a:onarel (the specific duty, ,,'hich is intended to com1Jense.te for the duty on ra'" wool, 8,verages 30 eents per nouud; the ad valorem duty averages 25%> and ad v8,lorem in the ease of carpets (the average is 30:6). These duties, 1,'hich are the result of the reductions granted by the U.S. at the Geneva Agreement (the effects of ,·'hich have been taken into aceount in the previous estimates). are still considered an obstacle to higher imports of ,,'001 manufactures. Assuming a further substantie1 reduction in duties, U.S. imports of "'001 manufactures (mainly 1,'oven fabrics and carpets) might increase, on the average, by some 50% or approximately $30-40 million. Ho"rever, it must be remembered in this connection the,t at the Geneva Agreement the right to impose a tHriff quota on ,,'oven fabrics of 1"001 "'as reserved for the U.S. The auota has not yet been established, but the simple f~ct that the right "'a,s reserved seems to preclude, at least for the time being, the possibility of a further re- duction in duties. Cotton me.nufactures The general obt",er'ITations made f),t the beginning of the previous paragraph regarding 1-'001 manufactures are even more true of cotton manu- factures. Imports of these nroducts will be similarly assembled in large categories for the purDose of the analysis. U.S. imDorts of cotton manufactures e~ounted to $26 million in 1947 compared with $63 million in 1929. The follm"ing table indicfl,tes t in quantitative and value terms, U.S. im~orts of cotton manufactures, 109. distinguished by broad categories, in 1947 pnd 1929: 1922 thousand million Thousand million _____C~o~mm~o~d~i~t~j~T______~________________~____~$________________~S___ Counte,ble cotton cloth (so. yd.) 7.6 15·9 Other cotton fabrics 2.8 8.5 1!el'! ring a'PParel 3.7 15.6 Other p.fvanced cotton products 9.8 13.7 Other cotton manuf. 2.2 -2.& Total 26.1 ~/ Not calculated. The low level of U.S. imports of cotton manufactures in 1947 "'as clue largely to insufficient production in the foreign countries from \.rhich the U.S. used to import before the war (European countries, especially the United Kingdom and Czechoslovakia, for high~grade articles, and Japan for intermediate-grade articles). but it is also due, though to a lesser degree, to the incre?,sed use of substitutes, such as rayon and other synthetic fibers. Finally, the high efficiency reached at present by the American manufacturing industry enables it to compete pith foreign industries in nearly ell cotton manufactures. '"Jhile it is reasonable to expect a considerable incree,se in U.S. imports of cotton manufactures in the near future with the rehabilitation of production in the traditional exporting countries, it is eaually prob8.ble that this increase "'ill not be such t!.S to restore im1)orts to a level comparable iAli th that of the t"enties, The increa.se in imnorts i"ill probably be greater in high... :>:rade articles, since they are rela.tively more 1m -'ortant in imports than in domestic production and the current high level of national income "'ould supuort a. very strong dem[1nd for them. But the increase in imports of intermediate-grade articles pay also be sub- 110. stantial. Countable cotton cloths came.. before the H8,r, prima.rily from European countries (United Kingdom and S"dtzerlend) and Ja1Jan. The bulk of the imports from Japan consisted of medium and lo~~nriced fabrics and the im)orts from Europe of high-nriced articles. Compared "rith 1947 the most recent trend of imports is sharply increasing, in- dicating greater availability abroad. On the be,si s of a, conservative nrojection of the recent trend t U.S. im'lJorts of cotton cloths may be estimated a,t a;nroximately 50 million aqua.re yards valued at :,19 million in 1949 and 60 million square yards valued at $23 million in 1950. These values have been calculated at current y.>rices according to the current distribution among the various tynes of cotton cloths. In the C~l,se of other cotton fa,~, Hhich include tapestry and upholstery cloth, table damask, sheets, cases, topels, etc. mainly imported from European countries, the outlook is also favorable. They may be safely estimated at some $8 million in 1949 and ~12 million in 1950. In the category of "'euring annarel, "'hich includes knit aDparel such as gloves and hosiery and non-knit ap:oarel of different t--pes, the increased competition of r~Won and other synthetic fibers is bound to affect more seriously the volume of U.S. ir.morts. Hm,rever, some in- crer>se in imports is to be eXjJected "'i th the restoration of produ.ction abroad (Europefl.n countries and Ja.nen). It may be estimp.ted that U.S. imports of cotton ,,'e.?ring e,1)1')arel in genert'1,l ,,'ill amount to t:',round $6 million in 1949 and $10 million in 1950. Finally, the 1Jrosnects are favorable ,,'1 th regard to imports of miscellaneous advanced cottOll -f)roducts such ~,S handkerchiefS, laces, etc. These imnorts have sh01''ll recently a clear up""ard trend, 1"hich, 111. conservatively projected through 1950, ','ould give some S17 million in 1949 and $20 million in 1950. The follo"'ing tB.ble summl'l.rizes the estimated values of U.S. imports of cotton manufactures in 1949 and 1950 compared "'i th the actual figures for 1947 (million dollf),rs): ~ 1949 l2.5Q. Countable cotton cloth 7.6 19 23 Other cotton fabrics 2.8 8 12 'ren.ring a,pnarel 3.7 6 10 Other advanced cotton products 9.8 17 20 Other cotton manufactures fJJ 2.2 -5. ...Q Total 26.1 55 71 Percent increase over 1947 111% 172p !!I The figures for 1949 and 1950 have been obtained a:p'Olying the same percent increase Over 1947 as for the other cotton manuf ac tUre s. Host of the U.S. duties on cotton manufactures ~,'ere substnntially reduced at the Geneva Agreements. In the previous estimates the effects of these reductions on the volume of U. S •. imports in the next tpo years have been taken into account. The current leval of duties is, h01>'ever, still fairly hieh, reaching for some items 35 or 40 percent ad vfllorem. It seems therefore likely th~'tt another HPprecia,ble reduction in duties could stirrrule,te imports, To ,"'hat extent is dHficul t to say, but roughly speaking, an average increase of 50~ or anproximately ~'30-40 million would be a reasonable estimate, Flax, hemp end_ ramie and manufactures u.s. imports of ral,' flax, hem:n and ramie and manufactures thereof amounted in 1947 to $30 million compared \,'1 th ~49 million in 1929. The follo'wing table sho,,"'s U.S, imports of the subgroup in 194 7 and 192,9, 112. distinguished by broad cHtegories (ouantitative and value terms);: 1242 1222 thousand million thouse.nd million ~, Commodity Dounds $ pounds ;:) Ra'!!' flax nnd hemp 8.926 2.4 28,482 6.9 Yarns, threads, t~,rines of flax t hemp and ramie 1,369 1.8 3,217 1.8 i!oven fabrics 5,795 15.8 !d 23.2 Other advanced products aL 10.0 at 12·0 Total 30.0 48.9 2i Not calculated. In u. s. production flax is mainly used to make twines (mattress. broom and sail tHine) and threads (se,dng and shoe thread). Hemp is used in much the S8.me manufactures as flaz. :Before the "'ar imports of flax used to cover more than 901 of domestic consumption, and imports of hemD more than 50~. In 1947 imports of hemp '!!rere negligible, amounting to 58,240 pounds. It is to be expected that they t,dll remain at 10'" levels in the ne~lr future. ImDorts of flax ,",rere comparati vely higher but it must be remembered that flax bi! of relatively minor im1)ortance in the U.S. textile industry. Domestic consumption of linen products consists prihcipally of fabrics such as table line:p., towels, etc., "Jhich have been sup)lied very largely by imports from textile-manufacturing countries in "lestern and Centre.l Europe. It seems, therefore. reasonable to expect that imports of ra,"' flax also .,rill not increase appreciably above the 1947 level in the near future. It is estimated that imports of ra'" flax and hemp "rill amount to some 9 - 10 million pounds valued at ~3 million in both 1~~9 and 1950. On the other hpnd, t:'.n expansion is to be expected in U.S. imports of manufactured products and esuecially of ,.roven fabrics and other advanced menufactures (such as handkerchiefs, laces, sheets,. etc.). This is particularly true of flax manufactures "rhich, although competing 113. in the U.S. "'ith domestic cotton manufactures, are in high demand B' Zealand in the case of sausage casings. Q,,'ing to the fact that U.S. meat output in 1949 is expected to be not r;reater than in 1947, and therefore meat supnlies "Jill again fall short of demand, an expansion in the U.S, imports of canned mes.t products is very likely~ although there is probably a certain disinclina- tion on the part of U.S. consumers to increase greatly their purchases of c8,nned products. Returns for the first six months of 1948 shm·', in fact, a sharply increasing trend. Assuming a continuation of this trend during 19L!9 U.S. imports of prepared mea,t nroducts may be estimated at some $40 million. In 1950, taking accou.~t of a probable increase in the u.s. meat outnut after 1949, imports may drop some,,'he.t, say to '35 million. Adding some $15 million for the imports of sausage casings in both 1949 and 1950, the total probable value of ,prepared and preserved meats imported into the U.S. 1,rill be around $55 million in 1949 and 550 million in 1950. The following table summa.rizes the previous estimates for 1949 and 1950 and 116. compares them ,d th the actua.l figures for 1947 (million dollars): ~ l.2!±2 1.25.Q. Fresh or frozen meats 1.1 8 8 Prepared or preserved meats 22.2 5.5. .2.Q. Total 23.3 63 58 Percent increctse over 1947 170~ 149% Of course, a strong obstacle to U,S. imports in this subgroup is represented by the sanite,ry embargo. Hov'ever, it seems that the 'oro- visions of the embargo are justified by the foot-and-mouth disease (aftosa) existing in Latin American countries ,.,hich a..ffects large numbers of cattle in those countries (e.g. 7 million head in t1exico). .A:ny dis- cussion of a removal or modification of the sanitary embargo seems, there- fore, out of the Question, at least for the time being. It is clear that in these circumstances a reduction in duties on fresh and frozen meats (",rhich are, moreover, specific and. very low) would be to a large extent ineffective. The duties are higher on prepared meat products (e.g. canned beef is subject to a duty of 201:> ad valorem) but it does not seem that a reduction would greatly stimulate imports. Sausage casing imports are duty-free. On the whole, it seems that a substantial reduction in duties would increase imports of meat produ~ts by some 10~ or approximately $6 million. Conclusions The probable vB.lues of U.S. imnorts of the commodities included in Group III (10 subgroups) in 1949 and 1950 ere as'enbled in the follo,,'ing summary table, in Hhich the estimates for the next t,,·o years are comoared \··ith the artuRl fLc;ures for 1947: 117. %of total Millions of dQllars %increa!;lein 1nCrel"R€ from Subgroups 1