TESTIMONY OF MICHAEL J. COPPS

ASSISTANT SECRETARY OF COMMERCE

FOR TRADE DEVELOPMENT

BEFORE THE

CONSUMER AFFAIRS, FOREIGN COMMERCE AND TOURISM SUBCOMMITTEE

OF THE UNITED STATES SENATE

KANSAS CITY, MISSOURI

JUNE 19, 1999

Mr. Chairman, Thank you for inviting me here today to talk about the compelling necessity to encourage American exports and about how, working together, we can grow those exports. And let me thank you, at the outset, for your leadership in this effort, and for your active participation as a member of the President's Export Council.

In its early days, the Clinton Administration developed and began implementing a coordinated National Export Strategy in pursuit of increased exports. The National Export Strategy is continuously updated by the interagency Trade Promotion Coordinating Committee, which was given new life and vitality by the Clinton Administration to improve coordination and consistency among government export programs. Secretary of Commerce William Daley chairs this important group. The TPCC combines the resources of some 20 Cabinet, independent and White House organizations to initiate new export promotion programs. This effort is not just desirable, it is imperative to counter the aggressive export promotion programs of other countries, programs targeted to put U.S. exporters -- here in Missouri and across the country -- at significant disadvantage and put U.S. workers out of jobs.

This National Export Strategy is working for America; it is working for Missouri. Since 1993, Missouri exports have grown by more than 44 percent, to nearly $7 billion last year. Its industrial, high tech and service exports go around the world, and its top ten markets include such diverse destinations as Canada, the European Union, Australia, Brazil and even China. Here in Missouri, the number of firms exporting has shot up by a phenomenal 75.8 percent since 1992 -- from 2674 businesses to 4702 last year.

Let me use the few precious minutes that I have to tell you about how we at the International Trade Administration of the U.S. Department of Commerce are trying to promote and grow U.S. exports, in the process suggesting ways in which your exporters and our Department can expand an already productive relationship. The Commerce Department is the lead agency in carrying out most of the export promotion elements of the National Export Strategy, with the notable exception of the large agricultural export program.

I believe ITA is well-organized to help Missouri exporters sell their goods and services overseas. I often liken the Commerce Department's International Trade Administration to four legs holding up a table.

One leg is our U.S. and Foreign Commercial Service -- a globe-spanning operation dedicated to helping U.S. businesses, particularly small and medium-sized businesses, export. Here at home, the Commercial Service's 105 Export Assistance Centers counsel U.S. firms on the steps needed to enter the export market and to succeed in it. These are "one-stop shops" - that is, they offer access not only to the resources of the Department of Commerce, but to those of the Small Business Administration, the U.S. Export-Import Bank, and a range of other U.S. government agencies. They work with, and often are located near, state and private groups with the same mission. In Missouri, there are U.S. Export Assistance Centers located in both St. Louis and right here in Kansas City.

Overseas, the Commercial Service has 140 international offices, strategically located in markets that account for 95 percent of American exports. The commercial officers stationed abroad advise U.S. companies on opportunities; help them in project bidding and trade disputes; collect valuable market information; set up meetings with foreign government and business officials whose decisions may be key to the success of a proposed venture; and even locate distributors and other contacts.

My shop, Trade Development -- a second leg of the ITA table -- is a unique place in our government that deals day-in, day-out with the private sector -- with U.S. companies and trade associations -- to identify opportunities for the full range of U.S. businesses and to develop and implement strategies to grow U.S. exports. We make sure that America is putting its best foot forward -- the coordinated strength of the private and public sectors -- in a world where other countries seem to have learned this lesson long before we did.

Trade Development's industry expertise, found nowhere else in government, covers the spectrum from basic industries to high tech to services and e-commerce. We are also home to the Advocacy Center, which is really a hallmark of the National Export Strategy. Your government and mine, far more than ever before, is directly and aggressively advocating for U.S. exports in the face of foreign government competition. This Administration realized early-on that the international business lost to American firms was far too important to write-off and that our traditional non-interventionist policy was equivalent to unilateral disarmament in the global competition. The job of our Advocacy Center is to deploy the power and prestige of the U.S. government to help U.S. businesses win contracts overseas. The Center works continuously with the private sector and with the other agencies of the TPCC to ensure that American firms have full support in their bids on global competitions.

Make no mistake: the Advocacy Center represents a dramatic change in attitude. For years, Administration after Administration stood blithely off on the sidelines while government leaders from other nations aggressively promoted their home companies and walked off with the deals. U.S. business suffered; U.S. jobs were lost. No more. Nowadays, from the President on down through the Cabinet and ambassadors, everyone is hitting the advocacy road, and the results are plain to see. Over the five years of its existence, the Advocacy Center counts some 450 competitions in which our efforts assisted U.S. bidders to win contract awards. These awards represent $60 billion in U.S. content and hundreds thousands of U.S. jobs. In this time of soaring trade deficits, deploying the strongest possible advocacy effort makes more sense than ever. Again, it's not just desirable -- it's essential.

Also located in Trade Development is our Trade Information Center, whose mission is to improve small companies' access to both general and country-specific counseling and information. The TIC, as we call it, features both an 800 number and newly-upgraded websites. During FY 1998, TIC trade specialists responded personally to about 85,000 telephone, e-mail, letter, fax or visitor inquiries, 86 percent of which were from small businesses, and we responded to nearly half a million inquiries. The TIC's number is 1-800-USA-TRADE.

Market Access and Compliance is another leg supporting the ITA table. This is where the Department focuses on identifying and eliminating trade barriers. Its mission is to see that market obstacles holding back U.S. exports are removed, and that the benefits of U.S. trade agreements are actually made available to U.S. firms and workers. Its regional and country focus on barriers is unique in the U.S. government, and its understanding of the policies and tactics behind foreign barriers is an essential component of the National Export Strategy.

A cardinal tenet of the National Export Strategy is that trade agreements exist to be observed and enforced. This Administration is proud of the more than 240 trade agreements it has negotiated -- but the success of these agreements hinges upon their implementation. As long as our markets are open to others, their markets must be open to us. We have also made it abundantly clear that we will not stand by and allow U.S. workers, communities and companies to bear the brunt of other nations' unfair trade practices.

Secretary Daley and ITA's Under Secretary David Aaron have made compliance with trade agreements their high priority. Whenever we discover restrictions on our access to a foreign market, the Administration moves aggressively. Our new Trade Compliance Center at Commerce is charged with tracking our trading partners' compliance. This Trade Compliance Center works closely and carefully with the Department's industry analysts and country specialists, as well as with the Trade Enforcement Unit at the office of the U.S. Trade Representative, and with numerous industries. We try to achieve trade compliance and market access short of dispute settlement wherever possible, and we strongly support USTR efforts when dispute settlement cases become necessary. Nor do we hesitate to seek enforcement either through the World Trade Organization or through the use of U.S. trade laws.

The fourth leg of the ITA table is the Import Administration, and its purpose is to keep the playing field of international commerce level for America's industries. IA enforces laws and agreements to prevent unfairly traded imports. The most prominent recent example has been the determination that certain countries were dumping rolled steel products, and that countervailing duties should be imposed to safeguard the U.S. steel industry.

The Import Administration not only makes those determinations, but assists domestic industries, especially small businesses, in determining whether there is sufficient evidence to petition for anti-dumping and countervailing duty investigations. IA also works with the USTR in negotiating fair and transparent international rules for such investigations; participates in negotiations to promote fair trade in specific sectors such as steel, aircraft and shipbuilding; and implements the laws concerning foreign trade zones.

At the core of the National Export Strategy, and at the heart of ITA's organization, is a commitment to involve America's small and medium-sized businesses in the world of global commerce. Small and medium-sized firms are central to building economic opportunity, and involving them more in global commerce is central to our strategy. This is as it should be. SMEs are the lead engine in creating jobs, and if America's future is in the global marketplace, we must make sure that our small businesses are competing and prospering in that marketplace.

There is some good news. The number of U.S. exporting companies grew from 112,000 in 1992 to 209,000 in 1997, the last year for which the figures are complete. Of this 97,000 increase, 94,000 were small and medium-sized firms. SMEs comprise 97% of our exporting companies. Nearly 30 million Americans work for firms that export. But we must involve many, many more such businesses in global commerce. We know that America is destined to live in a world of global business. It is not a question of whether we will participate or not. It is a question of whether we will participate well or poorly.

Our commercial officers, our industry specialists, our mission organizers and trade promoters, our advocates, our Trade Information specialists, our compliance experts are, all of them, dedicated to this important mission of growing exports for America's small business exporters and the millions of workers dependent upon these firms for their livelihood. More than half of the U.S. companies that have received direct support from the Advocacy Center that I described earlier are small or medium-sized businesses. Hundreds more have benefitted from its services as subcontractors and suppliers on large-scale infrastructure projects.

Mr. Chairman, I want to "talk up" public sector-private sector partnering. I want to talk it up because it works. Neither sector can get the job of trade development done alone. I have worked in government and I know that without the expertise and creativity and good judgment of the private sector, government cannot get the job done by itself. But I have worked in the private sector, too, running a Washington office for a major U.S. business, and as a senior executive of a major trade association, and I know that the private sector cannot open the doors of global commerce by itself in a world where market access and procurement decisions and commercial climates are so often determined by governments, and wherein our competitors combine all their resources, public and private, to win the competition. I am a believer that if we are to develop America's tremendous trade potential, it will be because we find constantly more creative ways to work together and to leverage off each other's particular strengths and access. My job is to work with the private sector to make it happen.

There are many opportunities out there, even given the troubled global financial climate we have encountered over the past two years. And we -- this Administration, the TPCC, the Department of Commerce -- are developing new ways to accomplish our goals. In this era we can video-conference, we can use the Internet, we can help U.S. exporters understand and take advantage of such developments as the creation of the Euro. We are also enhancing the TPCC's cooperative activities with state and regional export development groups and with the National Governors' Association.

Time precludes my going on, but I think you get the flavor. I hope you can tell that I am a believer, a true believer, in what we are doing. We do have a strategy -- a National Export Strategy -- and we are implementing it in a way that makes sense and makes progress. Surely I am not here to suggest that the implementation is perfect. We depend upon constant review and upon the oversight of Subcommittees such as this, and on the creative input of our private sector partners, to critique our performance on an ongoing basis.

In the meantime, we are, as Teddy Roosevelt said, in the arena -- knocking down trade barriers and opening the way for U.S. businesses as they venture out into the world, always looking to reach agreement, but ready to protect and fight for their interests if necessary -- and winning more than our share of confrontations.

I believe we have, in all, mounted a strong, vigorous and effective program. We are a committed group of people doing an increasingly effective job -- day by day, month by month, year by year -- of advancing the cause of U.S. commerce in the world arena. Working together, the Executive Branch, the Legislative Branch, our states, cities and localities, and the private sector, we can, and we will, ensure America's continued leadership in global commerce.

I thank the Chairman and the Subcommittee for your attention, and I would be pleased to respond to your questions.

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