Dear Mr. Speaker: In the Message which I sent to the Congress on April seventh requesting a one-year extension of the present Reciprocal Trade Agreements Act, I referred to the need for a thorough reexamination of our whole foreign economic policy.1
I now recommend that a commission be established to make this review. The review should provide the basis for action during the next session of the Congress.
It is my belief that the proposed commission should be made up of members of the Congress appointed by the Vice President and the Speaker of the House, and members appointed by myself from outside the Congress. It should be representative of both major parties.2 This is appropriate since commercial policy is an integral part of our total foreign policy for which broad national support is vital.
This commission naturally should work within the framework of our foreign policy and our global defense plans. Close liaison should be maintained with the group set up under the auspices of the State Department to follow up the economic and financial talks held earlier this spring between the United States and various European countries.3
The commission should study all existing legislation and the regulations and administrative procedures stemming from it which bear directly on our foreign economic relations. This review should seek to determine how these laws can be modified or improved so as to achieve the highest possible levels of international trade without subjecting parts of our economy to sudden or serious strains.
An inquiry of this nature is imperative. The economic policy of this nation exercises such a profound influence on the entire free world that we must consider carefully each step we take. Changes in foreign economic policy--even those which at first have relatively slight consequences within this country--may either strengthen our allies or plunge them into a downward spiral of trade and payment restrictions, lower production, and declining living standards.
Our foreign economic policy also has important implications here at home. Declining imports will necessarily mean falling exports, resulting in a serious loss of markets for our agriculture and other industries. Expanded imports may require some adjustments in our country. We must make sure that changes in foreign economic policy consonant with our position as the world's greatest creditor nation do not benefit particular groups at the expense of the national welfare, but we must also make sure that such changes do not place unequal burdens on particular groups.
As I indicated in my previous Message, the achievement of a strong and self-supporting economic system in the free world, capable of providing adequate defense against aggression and of achieving rising standards of living, must be a cooperative effort. Through increasing two-way international trade and stimulating in every practical way the flow of private investment abroad we can strengthen the free world, including ourselves, in natural and healthy ways. By so doing, we can lessen and ultimately eliminate the heavy burden of foreign aid which we now bear. Both we and our friends abroad earnestly desire to see regular trade and investment replace grant assistance.
In launching a broad-gauge study into the question of what our foreign economic policy should be, I think we can prepare the way for a fuller utilization of the economic strength of the free world in the cause of peace and prosperity.4 Sincerely
