Mr. Chairman and Members of the Senate Banking Committee,, it is a great honor for me to be here today as President Clinton's nominee for the position of Under Secretary of Commerce for International Trade. I am especially honored to be here before you because of my longstanding admiration for the work of this Committee and your keen understanding of the importance of trade for the American economy. I also want to thank the Committee for scheduling this confirmation hearing so promptly.
I look forward to establishing a strong working partnership with you, Mr. Chairman,, the Members of the Committee and your staff. I appreciate, in particular, this Committee's support of the Trade Promotion Coordination Committee and the efforts to rationalize and make more effective the executive branch's export promotion programs.
If recommended by this Committee and confirmed by the Senate, I will aim to foster a new level of cooperation between the International Trade Administration and your Committee. In this new era of prosperity for the American economy, our bipartisan approach to establishing the nation's trade policies has proven itself effective and will continue to be the cornerstone of our future success.
Today, America is enjoying the strongest economic perfon-nance in a generation. We are in a unique position to compete for new global markets and the jobs these markets will create. Yet, in the next few years, America will continue to face crucial trade challenges. Amidst fierce international competition, we need to intensify consultation with Congress, keep the American people involved and interested in trade issues, and remain on a bipartisan path. The future of America depends on our ability to continuously adjust to the rapidly changing global marketplace. We must build on our success. At this point in American history one real danger we face is complacency.
America must continue to lead in expanding and liberalizing the world economy. Over the last four years we have concluded over 200 new trade agreements and are, once again, the world's leading exporter. To maintain this position, we must aggressively ensure that the agreements we sign are complied with. By building on our economic strengths, breaking down trade barriers, increasing our knowledge of and access to international markets, and creating innovative partnerships between government and the business community, we can ensure American prosperity into the next century.
Promoting American leadership in the development of global economic partnerships, in the liberalization of international trade, and in the creation of open markets for US business, will also help us achieve other vitally important national goals. Objectives such as supporting emerging democracies through market reforms and promoting peace through increased regional economic stability, depend on American leadership. I believe the International Trade Administration (ITA), in a partnership with industry, can be a powerful instrument for carrying out this leadership role.
If confirmed as Under Secretary of Commerce for International Trade, I will do more than simply consult with Congress; I will regard Congress as a key partner in both expanding international economic opportunities for American business, and in protecting Americans from unfair trade practices. I look forward to learning in depth the views of Congress, and particularly the members of this Committee,, regarding the crucial issues of international trade. I also believe that the ITA should make sure that its efforts are better understood and supported by the American people. I hope to communicate better and to show Americans in concrete, tangible ways the real benefits of international trade to their everyday lives. For this I will need your help and advice. I will make it a priority to listen to your concerns and ideas and to keep you fully informed as we work towards achieving our goals.
Our nation was built on trade. From the era of clipper ships, to our 'Open Door' policy at the turn of the century, to the creation of the World Trade Organization, the United States has a long history of promoting free and fair trade. It was only when we turned our back on the world and its markets, most notably in the late 1920s and 30s, that America faced its gravest economic difficulties.
Today, US exports are growing at a pace of about I 0 percent per year, 3 times faster than our GDP. More than 12 million US jobs depend on exports and more than two million of these jobs were generated from increased exports since 1992. Firms that export achieve 20 percent faster employment growth and jobs in export industries pay 13 to 18 percent more than the average wage. Over the past four years, trade has spurred about one third of our overall domestic growth.
We have worked hard to widen and level the global playing field so that American industry and our workers could profit from expanding overseas markets. It remains our responsibility to lead the world further in this direction. We need greater access to markets abroad if we are to sustain our current economic performance and remain competitive in the years to come. We can do this by pressing developing and developed countries alike to rise to our level as the most open economy in the world.
My career in government and business has, I believe, well prepared me to face this challenge and to take on the responsibility of Under Secretary of Commerce for International Trade. I joined the Foreign Service in 1962. My initial assignment was as the commercial officer in Guayaquil, Ecuador, where my first job was to put on a US trade fair. It was enormously gratifying to give such tangible support to American exporters. If confirmed, I will be responsible for the US and Foreign Commercial Service and the promotion of US exports will remain my top priority.
In the 1970s, I worked here in the Senate, both as committee staff and for then Senator Walter Mondale. My experience working in the Senate made me aware of the crucial role of the legislative branch in the formulation and execution of public policy. Subsequently, I served as Deputy National Security Advisor in the Carter Administration where, among other things, I was involved in the security aspects of our international trade policy. This brought home to me the vital importance of US economic strength to our national security.
Upon leaving government I became Vice President at the investment bank Oppenheimer & Co. and a member of the board of Oppenheimer International. Subsequently, I served as Director of Oppenheimer's Quest for Value Dual Purpose Fund. Working in the private sector provided me with an important understanding of the financial dimensions of foreign trade. It also made me fully appreciate the centrality of international trade to America's financial strength and international competitiveness.
Finally, for the last four years, I have served as Ambassador and Permanent Representative to the Organization for Economic Cooperation and Development (OECD). The OECD is deeply involved in international trade issues. My ambassadorship has given me a front-row seat in observing how the world's industrial democracies are coping with, and trying to extract maximum benefits from, the enormous changes brought by new political and economic forces unleashed by technology and globalization. The advent of truly global markets, increased competition, borderless financial flows, and the telecommunications and transportation revolution, have been the subject of intense scrutiny at the OECD.
As Ambassador, I have worked on many of these new challenges. During my tenure, I helped to fight off attempts by Japan and the European Union to persuade the OECD to condemn US bilateral market opening efforts on automobiles and automobile parts as managed trade. Defending and enforcing such bilateral agreements is crucial to opening new markets for US firms. I have also been involved in efforts to negotiate a Multilateral Agreement on Investment (MAI) to provide national treatment and state-of-the-art protection to US investors abroad. This agreement is critical since a third of US exports are to US subsidiaries located abroad. I worked out the consensus to begin negotiations to criminalize bribery in international transactions. No practice is more pernicious or more disadvantageous to American business than the bribery of foreign public officials by our competitors. Under my direction, the U.S. mission at OECD has also worked to stop the misuse of tied aid to fund commercially viable programs.
I have also worked to promote the growth of international electronic commerce, including serving as Special Envoy for Cryptography in which capacity I am attempting to promote the use of strong encryption to secure global communications in ways which protect public safety and our national security. This experience has confirmed that it is essential for ITA to support the leadership role of American industry in global electronic commerce if we hope to take full advantage of its enormous potential for the future of the US economy.
For foreign trade to continue to have a positive effect on our economy and on our way of life, the private and public sectors must work in partnership. Although the American workforce has adapted itself remarkably well to the fiercely competitive global economy, we must continue to provide a favorable environment in which American business and workers can thrive into the future. This favorable environment can only be achieved through vigorous trade promotion and enforcement efforts. If confirmed as head of IT&I I will continue to follow President Clinton's admonition to "compete not retreat."
If confirmed, my principal goals for the International Trade Administration will follow Secretary Daley's five objectives for the Department of Commerce as a whole:
I intend to support the Secretary's key international objectives and to build on the excellent work of my recent predecessors, Jeffrey Garten and Stuart Eizenstat.
If confirmed, I will place the highest priority on compliance with trade agreements and the enforcement of U.S. fair trade laws, specifically the anti-dumping and countervailing duty laws administered by ITA.
Vigorous implementation of the AD/CVD laws ensure that imported goods do not take unfair advantage over products manufactured domestically. I will fully support ITA's efforts to enforce the AD/CVD laws to ensure a level playing field that will protect our companies and workforce from unfair pricing and subsidies.
A little over a year ago the Commerce Department began the work of creating a new Trade Compliance Center to monitor foreign compliance with international trade agreements. I will assure that our Compliance Center promptly becomes fully operational. The Center will be a place where US business can seek help in identifying and eliminating illegal foreign trade practices.
Export promotion is a basic mission of ITA. In addition to supporting Secretary Daley in his trade missions, I will lead as many missions as I can to promote US exports. I look forward to receiving your advice on how I can make these more effective.
You are undoubtedly aware of the success of ITA's Advocacy Center. In less than four years the Center has helped about 200 US companies win over 350 overseas contracts worth over $50 billion in US exports over the life of the contracts. As directed by Secretary Daley, I will ensure that both our advocacy efforts and our trade missions are conducted in a fair and impartial manner.
I plan to work closely with Secretary Daley to use the Trade Promotion Coordinating Committee (TPCC) to its full potential. The TPCC's mission is to ensure that Federal export promotion and financing programs are fully coordinated and responsive to the needs of America's exporters as they compete abroad. This year's overarching goal is to provide a "seamless web" of government services to support our exporters at every phase of the contract and transactional process.
With Secretary Daley, I would like to build on these and other initiatives and strengthen the TPCC's role as a coordinative tool in both the policy and budget process. Secretary Daley will be discussing -- in depth -_ the TPCC's strategy for the coming year when he presents the 1997 National Export Strategy Report to this committee tomorrow. It is a forward-leaning document that builds on the TPCC's work over the past few years and sets a clear course for our nation's export promotion and financing programs.
I will also revive our Big Emerging Markets initiative. We must take advantage of the commercial opportunities resulting from worldwide efforts to cope with food and energy requirements, pollution and global climate change, and large scale infrastructure needs. I look forward to working with my colleagues at the Departments of Agriculture, Energy and EPA to co- lead business-developing missions in these growing sectors. At the same time I will not lose sight of the importance of existing mature markets, such as the role that Canada plays as our number one trading partner.
If confirmed, I will work more closely with the Small Business Administration (SBA) and our small business community to encourage participation in international trade. Small and medium sized enterprises account for 28 percent of all manufacturing output in the United States, but only 13 percent of total manufacturing exports. Since most of the growth of employment over the last several years is attributable to small and medium enterprises, it is vital for our economic future to do more to encourage these businesses to look beyond our borders for new growth opportunities.
Strengthened programs within ITA, SBA and the trade finance agencies can provide small and medium size businesses with better tools to succeed in competitive international markets. Specifically, I will seek to use the technology of electronic commerce to help small businesses use the Internet both to receive ITA services and to promote their own products abroad. I will also work in coordination with other TPCC agencies to define more efficient means of providing export assistance and financing to small businesses.
I believe the Commerce Department, and the International Trade Administration, have a special responsibility to push for economic policies which will continue to support our country's foreign policy. US foreign economic policy must continue to support the peace processes in the Middle East, Bosnia and Northern Ireland and the ongoing democratic transitions in Africa, the New Independent States (NIS) and Central Europe. Fair trade and open markets create stable economies in which democracy can take root and flourish.
Peace and economic prosperity go hand in hand. The development of trade and the improvement of economic conditions are two of our most efficient policy instruments in our fight against instability. This Administration, with the support of Congress, has clearly shown that international economic policy and foreign policy can no longer be regarded separately.
If confirmed, I will pursue the promise of electronic commerce and other information technology applications which will support American business as it harnesses these technologies in efforts to bolster sales and investment abroad. I will hold a series of roundtables with the private sector, NGOs and TPCC agencies on selected electronic commerce issues. I will focus on the issue of standards and the need for mutual recognition agreements to assure that standards do not become the trade barrier of the 21 st century.
Finally, I will follow through on my efforts to criminalize bribery and to end the tax deductibility of illicit payments. I will work with the private sector to support our negotiating efforts to end such practices by foreign govermnents.
Looking ahead to the next century and to the new challenges we will face, we must learn to communicate the benefits of international trade to the American people in a clear and concrete fashion. Our businesses and workers must be given more tangible evidence of the ways in which our country's international economic policy contributes to a more prosperous America and a more stable world. Above all, we must make the private - public sector partnership a reality in all aspects of our mission.
If confirmed to head ITA, I will use the resources available to me to help promote America's business interests abroad and do all I can to ensure that international trade creates more and better jobs for all Americans. I believe that America's international business strengths and our global leadership in opening foreign markets, and enforcing fair trade laws and agreements, can help assure a bountiful future for our country.
If confirmed, I look forward to working with this Committee and Congress
to that end. Thank you for your time. I would be pleased to take your
questions and begin what I hope will become a frequent and open dialogue
between ITA and Congress.
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