Abstract

One of the most delicate dilemmas confronting the Nixon Administration in the area of foreign trade is that of reconciling its position as an advocate of free trade with the President's campaign pledge to cut down on textile imports. Last year, the Secretary of Commerce, Maurice Stans, visited Europe and the Far East to talk with major U.S. trading partners. His primary goal was to persuade European and Far Eastern countries to agree to voluntary quotas on their textile exports to the United States. This concern and action merely reflect the increasing labor-cost differential between the U.S. and our trading partners overseas. Textiles is only one of the many items in which foreign competition has hit U.S. manufacturers hard. In the last decade or so, foreign manufactured transistor radios, TV electronic components and parts, dry batteries, automobile and auto parts and the like, have been entering American markets on a massive scale. To counteract and recapture those lost markets, many U.S. companies have set up "shops" in foreign lands. Of course, not all U.S. private investments overseas are made to reduce costs; large numbers of companies have invested abroad to gain a footing in those markets.