gard to the Common Market countries, I say again that we had a whole lot to do with promoting it. But after it became an established fact or at least became apparent that it likely would be, what occurred within our own Government so far as preparations and clearances and agreements as to how we would proceed and all that as between the Department of Agriculture, the Department of State and all the rest? I am sure you have been in on the ground floor to the point where you could describe for the committee just how these things did work in that actual occurrence.

COMMON MARKET

Mr. IOANES. We first became active participants in projecting the U.S. position with respect to our trade in about 1958, well before we could prove that we were being damaged. At that time in our discussions within the Government we were theorizing. We were saying that the system we were hearing about was a system that could cause us problems. There were visits to Europe at that time by people from the Department of Agriculture and speeches were made on the subject.

Going into this period of 1958 to 1960, we had two kinds of things happening with respect to the Department's activities. We had first the reports that come from people like our tobacco specialists or our wheat specialists or fats and oil specialists who were going to Europe and putting out published reports saying we were concerned about what might happen, and we had the second kind of thing where official statements or speeches were made by departmental officials on the same subject.

Then we came to the actual period, Mr. Chairman, of the negotiations with the Common Market, the period when we visited the Common Market in company with the State Department. I was a member of a mission on a number of occasions that did this. And I must say that on the mission, again before the market was formed in its agricultural phases, we had very good support from a number of people in the State Department in saying, "The system you are proposing could hurt us very badly."

I remember one mission in particular where we went in company with other exporting nations and visited all the Common Market countries for a 6-week period and I can say that the support we had from ambassadors and from our State Department at that time was very good. Then we came down to the time they actually put the system in effect. I think the right things were said. I think the right things were said officially. There is no question that the Europeans fully understood that the Common Market was a device which the United States had supported as a political being, that perhaps because we were so interested in having a Common Market formed that maybe they didn't believe what we were saying.

TARIFF NEGOTIATIONS

The major reason why the tariff negotiations which began in the fall of 1960 lasted for 18 months, was a strong difference of opinion with respect to agriculture between us and the Common Market. The Secretary of Agriculture, Orville Freeman, is the man within the U.S.

Government who kept that negotiation from closing earlier, and I think he is the man who deserves credit for focusing attention on this problem today. The Europeans I think are understanding better and better every day that the rules have to be the same for both sides. that we can't have a new negotiation where agriculture doesn't get the same kind of treatment as the rest of the trade package. I think we can say that if agriculture isn't included in the next tariff negotiations in an effective way, there won't be any negotiations. Mr. Renne has spent at least half his time since he has been here in developing this policy.

Does this come close to what you had in mind?

Mr. WHITTEN. It does. Mr. Ioanes, we want this information, because we are dealing with "a place in the sun" for your agency. We want to know the facts.

Mr. IOANES. I appreciate that. What I am really trying to say in summary, if there is one place in the Government that from day to day worries about this problem and tries to see that the problem gets attention in the framework of everything the U.S. Government is doing, it is this part of the Department of Agriculture. This is true, whether it is the Common Market, or whether it is exports to other areas or whether it is imports, but in particular with respect to the Common Market I think all of us who have worked on the Common Market have a great deal of personal satisfaction in believing that we have helped obtain a better understanding of the situation through our work.

Mr. WHITTEN. I appreciate your statement, much of which we have some ideas about.

WORK OF THE AGRICULTURAL ATTACHÉ

Now, turning briefly to this, just how does an agricultural attaché operate? I recently saw your agricultural attaché, Mr. Wenmohs who was transferring from Nigeria to Hong Kong. We are familiar with the situation heretofore in Paris which was kind of a central point for most of Europe, by virtue of its geographic location. Could you describe for us for the record Mr. Wenmohs' operations in Nigeria? We hold him in high regard, knowing him personnally. What would be his job that he has been doing for 2 years in Nigeria? By that I am trying to point to a single post dealing with a single operation. Then if you would tell us what the job of a man in Paris prior to the Common Market was, what his work would be, that we might better understand. I would guess that Mr. Wenmohs' position in Hong Kong will come nearer what the Paris attaché would be doing. I am asking you to show us how they would handle that job at a location of that type.

Mr. IOANES. I appreciate that, Mr. Chairman.

The job in Lagos, Nigeria, would have one major essential component. It happens that Nigeria is a major agricultural country and a major exporter of two items very important to American agriculture. One is cotton and one is oilseeds, mainly peanuts. It is an area where statistics-where the modern marketing system, where the means of communication and reporting we have in other parts of the world, are lacking. This is because in former years you went someplace else to conduct your business with the country. It is opening

up a brandnew post where the major activity of the attaché is primarily that of giving us more basic and more current information. Mr. WHITTEN. Based on his own judgment and observation.

Mr. IOANES. On his own judgment and observation and knowledge and also on his communication with those key people in the country who over the months he finds to have good judgment. Unless he does that, too, he really is not reporting from all the sources he can get.

His basic job in that post is that of competition. But he also had a secondary job, because what we found out is that as trade was untied with the mother country, there were opportunities in a limited way to sell some agricultural products to the country. I am not saying that is the major purpose, but that is the secondary purpose in that post. In Nigeria alone, which is the center of his post, our agricultural trade was about $7.5 million.

In contrast to Lagos, a post like Paris, France, encompasses all the activities of our service in the field. We have, in France, the need to report in the same effective way as in Nigeria, with respect to the agricultural developments in France. France is one of the leading agricultural exporting countries of the world and, in many cases, we bump head on with her in our efforts to seek world markets.

However, the attaché in France can rely more on published information than can an attaché in Lagos, Nigeria. He must also know his way around the country and know additional sources of information than governmental reports.

Competition is a key job.

Secondly, France is a market for the United States, a major market. She is a market for a wide variety of our products-cotton, feed grains, particularly corn from year to year, some tobacco-not enough, but some tobacco-soybeans, some fruit, not enough; they ought to take more. One of the big jobs of the attaché in a country like France is to get the governmental restrictions off some products, such as Walt Horan's apples and pears. This he spends a lot of time doing.

Then you also happen to have, Mr. Chairman, in Paris, regional headquarters of organizations. We get involved in the work that the countries do in NATO. The work goes on with respect to joint defense exercises. Other work comes to that attaché because of the presence of the OECD in Paris. They call on us for assistance.

You have, in France, not only the national job of competition and of market access for our products but also the international problem as well.

Shifting to Hong Kong, you have much less of the element of competition. It is essentially a city island with not very much agricultural production in it. It is a processing and trade center. It is a big city factory and is a fairly large market for us, taking about $50 million worth of products a year, the whole range of everything we export going into that area.

But, in addition to that, Hong Kong, for us, is a major source of trade information.

I would call your attention to one point that, as you travel around the world, you will see that our agricultural attachés also are becoming the handlers of tremendous numbers of visitors from agricultural communities in the United States in recent years.

There is one interesting development that we have seen in the last few years, with respect to the countries we have been talking about, that surprises us in some cases. It seems to us that we perhaps have made a mistake in assuming that in some countries of the world where we had an AID program it was going to go on forever. I don't mean our aid program. I mean the U.S. AID program.

I am thinking here, in particular, of places like Formosa. We do not have an attaché in that country. We are finding out as their economy improves, and as one of these countries in particular finds that it is going to have its AID program reduced, that they are becoming pretty good markets for some of the things they got under the AID program.

We are finding that maybe we have made a mistake, because even in countries where we thought that we just couldn't afford to have a man to represent American agriculture, trade is coming up to $10, $12, $15 million a year, and we are going to have to find a way as time goes on to have some coverage.

AGRICULTURE EXPORT POLICY

Mr. WHITTEN. I have always differed from our policies on foreign aid. I realize that we have had our production built up to such a level that to cut off not only agriculture production but other areas of our industry would be a serious disruption to our economy. I don't know how serious it would be, but I can see it would be really serious and we have got to taper these things off. But I seriously questioned this through the years where the United States has been such a big producer, and as a result has dominated world markets to the point that the U.S. price usually has been identified as the world price. Even where that is not true, we have been the residual supplier in many areas. The other suppliers were too small to meet the need, so they took what they could and we took the rest. In time, it is getting to the point where this clearly cannot be done and, in the process, we have got to get around to the thought that we cannot keep up world markets to high level working alone.

If every dollar's worth of everything that we have given away, if we had sold it for as small a return as we could have gotten, we would have been building up future markets and we would have been making these things available.

Instead we have tried to continue to hold up world markets, to give away instead of selling for what they could pay.

Coming back to what you are saying, I am convinced that our policy has not been sound in that regard. It may have been sound at its origin when we did dominate world markets, but when it gets to where the rest of the world produces to the point of being competitive, you can no longer try to hold the level up by your own muscle, so to speak.

WHEAT EXPORTS TO JAPAN

Mr. IOANES. No. I would say taking an item like wheat, for example, that there is simply no way for us to hold the rest of the world up with respect to our commercial exports of wheat, and right at the moment with respect to Japan, we are working real hard to increase our percentage share of that market, and this year I think we are going to succeed through two factors.

First, because of direct representations made to the Japanese with respect to the way they have been operating their wheat import policy, and secondly, with respect to certain supply and price actions that we have taken in the United States that make it easier for them to buy from us.

I think we will have substantially expanded sales of both Western - White wheat and Hard Winter wheat to the Japanese market this year and we will increase our share of the market. I won't say at the expense of any other country, but we will simply make a gain for the United States.

Mr. HORAN. Will there be any charge against CCC in any of those operations?

Mr. IOANES. In all our exports of wheat there is a charge against CCC for the difference between the export selling price and the domestic price, so there will be a charge against CCC of perhaps 50 to 55 cents a bushel.

Mr. HORAN. We are doing that in order to underbid Canada and Australia?

Mr. IOANES. We are doing it to make our price of wheat competitive in the Japanese market.

Mr. HORAN. To get the sale we have to.

Mr. IOANES. Oh, yes. If we did not do this for wheat, in time we would sell very little wheat in the world markets.

AGRICULTURAL ATTACHÉ POSTS

Mr. WHITTEN. Where do you plan to put your three new posts, and could we have in the record a listing of where you have posts at present?

Mr. IOANES. We will be glad to supply that for the record. (The listing referred to follows:)

Attaché staff authorized by posts as of Jan. 31, 1963 (permanent positions only)