Administration Opposes Senate Bill Seeking to Check Arab Boycott in U.S.

Undersecretary of State George Bush and Secretary of Commerce John T. Connor today told a Senate committee that while the Arab boycott of American firms dealing with Israel is looked upon by the Administration with resentment, in nevertheless firmly opposes the bill now before the Senate aimed at checking such boycott.

Hearings on the bill, which was proposed by Senator Harrison Williams, New Jersey Democrat, and Senator Jacobs Javits, New York Republican, started this morning before the Senate Banking and Currency Committee. Undersecretary Ball concentrated practically all his arguments to convince the Committee that the proposed legislation would gravely hurt Administration policies.

Under questioning, Mr. Ball asserted that firms that cooperate with the Arab boycott are in a better position “to work out solution” to their blacklisting problems than firms that refuse to cooperate with the boycott office. Asked whether the wording adopted during the weekend by the House International Trade Subcommittee–which would give the President the discretionary authority to promulgate anti-boycott regulations–would be acceptable to the State Department, Mr. Ball replied: “Quite frankly, I myself would not know what the Department of Commerce (which would have to act for the President) could do. Very little, I think.”

Secretary of Commerce Connor asserted in his testimony that should the law prohibit American firms from responding to boycott office questionnaires, American business would be subjected to more serious prohibitions on the part of the Arabs. He claimed that while it may be assumed that the 150 American firms that are now on the Arab blacklist were interested in the proposed legislation, firms that now choose to trade with the Arabs to the exclusion of Israel were not interested in such legislation. Both the Secretary of Commerce and the Undersecretary of State before him asserted that the boycott has only a “marginal” effect on Israel.

STATE AND COMMERCE DEPARTMENTS CRITICIZED AT SENATE HEARING

Senator Williams, who is a member of the Senate Banking Committee, declared at the beginning of his questioning of the witnesses that it is highly inconsistent of the Administration to declare itself opposed to the Arab boycott but at the same time oppose effective measures against it. He rejected the argument that the bill would affect American embargo on trade with Cuba noting that the bill specifically refers to boycotts against nations friendly to the United States.

Referring to Administration arguments that the boycott can best be handled by the Administration on a case to case basis, Sen. Williams noted that he himself and the other 30 Senators who co-sponsored the proposed bill believe that “neither the State nor the Commerce Departments have effectively dealt with this problem nor efficiently protected the American businessman.”

The grave warnings of possible Arab reaction to an anti-boycott bill were ridiculed by Sen. William Proxmire, Wisconsin Democrat, in his questioning of Administration witnesses. “I find it hard to believe that a country as powerful as the United States would be seriously affected by Arab attempts to put all American firms on a blacklist. This seems to be most ridiculous,” Sen. Proxmire declared.

Another member of the committee, Sen. Walter Mondale, Minnesota Democrat, also told Administration witnesses that he as co-sponsor of the bill, was “greatly surprised by the Administration arguments” noting that while the bill is sufficiently flexible, it would “give the Administration an important new tool against the Arab boycott which the State Department also deplores.”

Sen. Edmund Muskie, Maine Democrat, asked the State Department to submit documentation to show what help the Department provides to businessmen who were affected by the Arab boycott.

The first public witness in support of the bill today was Irving J. Fain, chairman of Apex Rubber and Tire Company of Rhode Island who appeared on behalf of the American Israel Public Affairs Committee. His testimony was so impressive that members of the committee, who received a copy of his statement in advance, took the unusual step of asking Administration witnesses to reply to Mr. Fain’s arguments even before Mr. Fain testified, and later when some of his argument were countered by Administration witnesses, Mr. Fain was asked by the members of the committee to reply to those counter-arguments.

Mr. Fain, who also testified before the House Subcommittee last week, rejected the argument that the Arab boycott is not effective, noting that Administration statistics showing the expansion of Israel’s trade do not show the deterrent effect of the boycott on the American business community. Mr. Fain also stressed the difference between the nature of the Arab boycott measures and the American policy of economic denial against Cuba and noted that the Administration itself, in several cases concerning other friendly nations, instructed American companies not to provide documents requested from abroad.

The witness disclosed that last March some American firms had to provide certificates that the goods shipped to Arab countries do not originate not only in Israel but even in West Germany. He pointed out that if left unchallenged, the Arab boycott would set a precedent involving the United States in all the economic warfare activities between other countries.