Growth of U.S. exports of plastics and resins to third countries has stopped after boom in mid-1960Ts

1960 1963 1964 1965 1966 1967

TOTAL EXPORTS (Millions of pounds) 852.2 940.2 1255.2 1213.2 1301.2 1313.5

To major producing countries: 414.0 341.9 401.0 350.5 393.7 430.8

EEC 244.8 219.1 242.2 217.9 249.6 265.8

U.K. 83.2 67.5 98.2 93.7 96.5 106.6

Japan 86.0 55.3 60.6 38.9 47.6 58.4

To third countries 411.2 598.3 854.2 862.7 907.5 882.7

INDEX TOTAL* 100 114 152 147 158 159

To major producing countries 100 83 97 85 95 104

TO third countries 100 146 208 210 221 215

PER CENT OF TOTAL 100 % 100 % 100 % 100 % 100 % 100o/o

Major producing countries 50 36 32 29 30 33

Third countries 50 64 68 71 70 67

EEC % of total 30 23 19 18 19 20

* Index total based on 1960 Source: U.S. Department of

= 100. Commerce

not delay its decision much longer. It must grind legislation through Con­gress no matter which option it chooses and this can take time.

It may be too late already to salvage this year's trade balance. The trade balance is in trouble. In March, the U.S. registered a trade deficit. Im­ports topped exports by $157 million and drove the trade balance for the first quarter down to an annual rate of $730 million. Last year, the trade balance was a favorable $4.1 billion and, in January, President Johnson said he was pushing for at least a $500 million improvement this year. This goal now seems out of reach, but it is not too soon to start putting props un­der next year's trade balance.

Most trade officials within the Ad­ministration probably favor the GATT proposal to reschedule Kennedy round tariff cuts. Their stumbling block will be Congress. Can they persuade Congress to repeal ASP and forget about the many quota bills it has been considering?

The odds that they cannot are about even and this possibility may be one reason why some countries agreed to the accelerated tariff cuts at all. Most countries, however, have a selfish mo­tive for accelerating their cuts and al­lowing the U.S. to defer its reductions. They would much rather give up at a more rapid pace something they al­ready have agreed to give up than risk losing their most lucrative export mar­ket through trade restrictions.

SPI urges U.S. to set positive export program

The Society of the Plastics Industry last week called on the Federal Gov­ernment to establish a "positive export program" to improve the nation's short-term balance of trade and to par­tially offset the future loss of foreign earnings likely to result from U.S. curbs on direct overseas investments.

In testimony prepared for presenta­tion to the White House's Office of the Special Representative for Trade Ne­gotiation on May 9, SPI tariff commit­tee chairman William F. Christopher outlines a number of "positive meas­ures" the Government should take to spur U.S. plastics exports. Among them:

• Provide new tax incentives for ex­porters.

• Simplify the country's cumber­some duty drawback procedures (un­der drawback the Government rebates duties paid on imported material used to produce goods for export).

• "Assure cooperation between U.S. shippers and ocean carriers serving the U.S. to develop rates and conditions

conducive to increasing our export trade, particularly to third countries."

SPI is the first major chemical in­dustry group to present its views on future U.S. trade policy during the continuing hearings on the subject by the Office's Trade Information Com­mittee which got under way March 25. The Manufacturing Chemists Associa­tion is up next for the industry on June 4 followed by the Synthetic Organic Chemical Manufacturers Association on June 10.

The previously rapid growth of U.S. plastics exports in all-import "third-country markets" has stopped in the last two years or so as the competitive advantage has swung from U.S. to European and Japanese producers, Mr. Christopher points out (see ta­ble). To offset this competitive ad­vantage and to enable the domestic in­dustry to compete more effectively worldwide, he calls on the Federal Government to, among other things, allow a direct foreign tax credit for foreign border taxes that are paid by U.S. exporters.

"It would be preferable if our ex­ports to EEC countries were accorded offsetting tax relief under revisions of the present GATT regulations," he tells the Trade Information Commit­tee. But he doubts whether "any sub­

stantial progress along these lines will be made in the near future." He feels, therefore, that the tax credit approach "is recommended as an appropriate method of offsetting the distorted ef­fect of indirect foreign taxes."

SPI applauds the Treasury Depart­ment for its recent revision of the In­ternal Revenue Code (the new Sec­tion 482) which it says substantially loosens restrictions on the ability of domestic firms to deal effectively in foreign trade through overseas affili­ates. It calls for additional tax incen­tives in the form of a special deprecia­tion schedule for investments allocable to export sales.

Hearings control fate of State Technical Services Act

When the State Technical Services Act was passed in September 1965, Con­gress authorized operating funds only through June 30, 1968. Ten days ago the Senate Commerce Committee took its first look at legislation that would authorize spending for this program for two more years; without this au­thorization, no more money can be appropriated.

Purpose of the act is "to promote

12 C&EN MAY 13, 1968

and encourage economic growth by supporting state and interstate pro­grams to place the findings of science usefully in the hands of American en­terprise." At the hearing, Philip K. Reily, newly appointed director of Commerce's Office of State Technical Services, said: "Although it has been barely two years since the first full-time director was appointed, I am con­fident that the committee will find evi­dence that this purpose has already been served." Pointing to the quality and enthusiasm of the people who have been attracted to work in the pro­gram, he added, "I have never seen so much ability and enthusiasm per dol­lar appropriated in any major pro­gram."

But there's the rub—dollars, or ra­ther, the lack of them. From the be­ginning, Congress has appropriated a mere 25% of the money authorized. The act authorized $10 million, $20 million, and $30 million in fiscal years 1966, 1967, and 1968. Actual appro­priations were $3.5 million, $5.5 mil­lion, and $6.5 million.

And the outlook for the future is equally bleak. The bill before the committee (S. 3245) would authorize $7 million for fiscal 1969, and for fiscal 1970 "such sums as may be necessary." The federal budget calls for only $6.6 million to operate the state technical services program in fiscal 1969. Ac­cording to Mr. Reily, this low level of funding "recognizes the current na­tional austerity" and represents an at­tempt "just to sustain the life of the program for one more year." Look­ing ahead to fiscal 1970, "in the hope that important domestic programs such as this may begin to develop," Mr. Reily forecasts a budget of $16 or $17 million. However, it seems unlikely that Congress will shell out this much money, if past activity is any criterion.

In its short existence the program has been well received, Mr. Reily says. One sign of state acceptance is the fact that all 50 states plus four territories are now taking part. Another is that states are building their programs faster than federal dollar-for-dollar matching will permit. Still another is the increase in user fees in the non­federal share of total funding. In the current year, he adds, fees paid by companies and individuals who use some of the services amount to nearly one third of the nonfederal share.

One thing that OSTS is pushing hard is development of regional pro­grams. Already, 14 states—one fourth of the eligible states and territories-are taking part in formal regional tech­nical service activities. The six New England states have a regional pro­gram and the seven Rocky Mountain states plus Nevada have established a council and are preparing a regional

Philip K. Reily Sustain the life

program. "We are doing all that we can to speed this trend," Mr. Reily says.

Several weeks ago the Subcommit­tee on Technology of the Senate Select Committee on Small Business (a com­mittee without legislative power) is­sued a report on the prospects for technology transfer. The report is somewhat critical of the Commerce Department's operations under the State Technical Services Act. The re­port notes, "With no incentive for re­gional cooperation, a replication of similar activities has occurred . . . . Greater efficiency would result if a bonus of federal funds were given for cooperative arrangements." The re­port also calls for a program of per­sonal counseling for "individual com­panies which lack the skill to ask the right questions," a program of repack­aging and tailoring information for in­dividual needs, and increased partici­pation of experienced technology transfer agents in independent non­profit research institutes and commer­cial consulting firms.

Safety of using Chemical Mace questioned in PHS letter

Preparing for what may well be an­other long, hot summer in the nation's increasingly unruly major cities, police agencies throughout the nation have bought more than 70,000 units of the nonlethal disabling spray, Chemical Mace. Now, however, these officials will have to think twice before using the spray, active component of which is chloroacetophenone (tear gas). Mace may be more harmful than com­monly thought if not treated promptly, the U.S. Public Health Service says.

In a letter to state, county, and city health officers, William H. Stewart, surgeon general of USPHS, recom­mends prompt treatment for persons squirted with Mace. (USPHS, as well as the company that makes Mace— General Ordnance Equipment Corp., Pittsburgh, Pa.—recommends immedi­ate flushing of the agent from the con­tact point as the most effective treat­ment. ) "The ability of the item to de­liver an irritating substance to a lo­calized area and maintain the activity of the irritant at this spot for a period of time clearly increases the possibility of more than transient effects to the exposed individual unless treatment is prompt," Dr. Stewart warns.

Although Mace and related chemi­cals are not covered by the Federal Hazardous Substances Labeling Act, Dr. Stewart plans to "encourage fur­ther studies, particularly to determine possible chronic effects."

Dr. Stewart describes the Mace weapon as a pressurized can contain­ing about 30 ml. or more of a solution of chloroacetophenone (tear gas) in a mixed solvent containing 1,1,2-trichlo-ro-l,2,2-trifluoroethane (about 75%), 1,1,1-trichloroethane (about 5%), and a mixture of hydrocarbons resembling kerosine (about 4%).

Function of the trichloroethane is unknown, he says. "Presence of a ker-osinelike solvent which is relatively nonvolatile prolongs the local action of chloroacetophenone."

Dr. Stewart admits that there is not enough evidence available for drawing final conclusions on the safety of Mace. In one series of experiments on the ef­fects of the product on human skin, he says, "It was found as expected, that exposure of voluntary subjects to skin application of the liquid in the item produced significant skin irritations but no permanent aftereffects, and there were no signs of systemic tox­icity."

Direct squirting of small amounts of chloroacetophenone-solvent mixture to the eyes of rabbits in FDA laboratories produced eye irritations that disappear with time, the surgeon general says. Studies with dogs on the possible ef­fects of liquid droplets deposited in the trachea by inhalation, however, have led to "inconsistent findings."

Already, Dr. Stewart's letter has given pause to some police officers. In Los Angeles, for example, police chief Thomas Reddin last week ordered his department to stop using Mace until further notice.

The nonlethal tear-gaslike spray is the brainchild of Alan Litman, a 33-year-old physicist. He stumbled on Mace four years ago while attempting to develop a protective device for his wife. Together with several associ­ates, he formed General Ordnance

MAY 13, 1968 C&EN 13