Prepared Statement of

The Honorable William M. Daley

Secretary of Commerce



Before the

Senate Finance Committee



September 29, 1999





Mr. Chairman, Senator Moynihan, thank you for the opportunity to appear before the Committee today to discuss the upcoming Seattle Ministerial meeting of the World Trade Organization (WTO) and the new round of trade negotiations to be kicked off at Seattle. We are at an historic crossroads in our economy where it is critical that U.S. companies and American workers position themselves to take advantage of and meet the challenges presented by the growing world economy. The new round is important to how the United States trades and competes in the world economy and how we can best secure gains for American workers in the global environment.



As Ambassador Barshefsky and Secretary Glickman explain in their statements, agriculture is central to these negotiations. We must remove the trade barriers that are preventing America's farmers from being able to compete fully in world markets. However, agricultural trade is not our only objective, for despite decades of trade liberalization, America's manufacturers still do not face an open and level playing field in world markets. And in the huge services sectors, trade rules have only barely begun to address the barriers that severely limit market openness.



Ambassador Barshefsky's statement provides the overview of the Administration's objectives. All of these are important from the Commerce Department's perspective, but rather than repeating them in my statement, I would like to explain the problems that our industrial and services exports face in world markets and focus on the highest priority areas where the Commerce Department will be concentrating its efforts. We are working very closely with USTR on these issues and our staffs are pooling their resources so we have the best analysis and strongest positions possible.



We are also working closely with the business community on Seattle and the WTO agenda through our official advisory committee process, with the Coalition for Trade Expansion and with the President's Export Council (PEC). We have heard from many parts of the business community and labor. We have also heard a lot through the National Trade Education Tour I have been conducting around the country.



I am particularly pleased by the PEC's letter to the President that was delivered just this week. The PEC's labor, business and Congressional members presented solid advice in all areas of the WTO agenda, from agriculture to services, to labor, to government procurement, investment and implementation of existing agreements. It is full of helpful goals and priorities and I strongly urge this Committee to study it. It is clear evidence that business and labor can make common cause on trade issues.







I would like to focus my remarks today on six priorities:



-- Compliance with existing agreements;

-- Non-agricultural tariffs and market access, including e-Commerce;

-- Services;

-- Government procurement;

-- Labor and environmental priorities; and

-- Trade facilitation.

There is one area that I want to stress is where we do not want to negotiate -- antidumping and countervailing duties.





IMPORTANCE OF THE ROUND TO INDUSTRY AND LABOR



Let me begin, though by reviewing just how important trade has become to our economy and why new trade negotiations are important to America's firms and workers. Since WWII the increasingly open global trade regime has provided remarkable benefits to the United States and the rest of the world. Since the beginning of the GATT in 1948, in fact, world trade has grown 15-fold and tariffs have been reduced by 90 percent. Where the trade club once comprised a handful of developed countries, the WTO now comprises 134 members -- most of them LDCs.



Exports have been one of the keys to the U.S. economic boom of the 1990's, providing nearly one-quarter of our economic growth since 1991. We are the world's largest exporter, with $934 billion in exports of goods and services last year. The recent fall of exports to some key markets experiencing economic distress -- especially in Asia -- demonstrates just how integrated our economy has become with the rest of the world. About 12 million American jobs are supported by exports -- jobs tending to pay significantly more than the average. In the manufacturing sector, roughly one in every four jobs is now related to exports. On the import side, Americans have been able to buy the broadest and most economical range of products in the world, further enhancing the competitiveness of our industries tht use imported inputs and our standard of living. America is in its 102nd month of economic expansion -- the longest peacetime expansion in history. Employment is at record levels. Inflation and unemployment are at their lowest in a generation, and we have created more than 19 million new jobs. The American economy is the world's most productive and most competitive.



But today we are also faced with the largest trade deficit in our history. In large part the deficit is a reflection of the rapid growth of the U.S. economy and the economic difficulties abroad. Our imports continue to grow, pulled by the purchasing power of the American consumer and U.S. industry, but our exports are stagnating because of economic conditions abroad. Working with our trading partners to obtain faster economic growth abroad is an important prerequisite for having our trade deficit contract. However, there is also a structural element to our trade deficit. Part of this is due to the difference over the years between the more open U.S. market and the higher market barriers in some other parts of the world.





Tariff bindings in Asian countries, for example, are typically in the 10-25 percent or higher range, while our tariffs on Asian products average 3.2 percent -- and more than 40 percent of Asia's exports to the United States enter duty free.



Non-tariff barriers in many parts of the world are even more important impediments to our exports. Services trade, for example, lags far behind trade in goods as far as trade liberalization. Government procurement, which accounts for $3 trillion in global business, is another area where American companies find themselves at a disadvantage. These and other barriers can best be beaten back and eliminated by having a new round of trade negotiations. The United States, with many of the most innovative and competitive industries in the world, has much to gain from the new round. The more level the playing field, the better off we are. That is why there is such a critical need for a new round, one that will address the imbalance in opportunity.





COMPLIANCE WITH EXISTING AGREEMENTS



Before I discuss new priorities for manufacturing and services, though, I want to state unambiguously that compliance with and enforcement of existing agreements is our first priority. We negotiated hard and long in the Uruguay Round, and we cannot tolerate any attempt to either weaken existing agreements or to step back from commitments.





Antidumping



A number of countries are suggesting that the antidumping agreement should be reopened, including in particular a country with a huge and continuing global trade surplus and that has ranked among the major dumping countries of the world. Mr. Chairman, we should not, however, reopen the antidumping or subsidies agreements, and we have already told this to our trading partners. Over the years, our administration of the unfair trade laws has proven to be effective in addressing unfair trade practices against a wide array of goods including steel products, semiconductors, capital goods and agricultural products. We have worked hard to ensure that American workers and companies have strong remedies available to combat unfair foreign competition.



Last year, the steel industry was beset by a flood of steel imports. Steel imports reached record levels; overall steel imports in 1998 were up 33 percent over 1997 levels. The Administration has responded effectively to the surges, and we have made strong enforcement of the unfair trade laws in a WTO-consistent manner a centerpiece of our program. Since last fall, we have conducted, or are conducting, more than 60 antidumping and countervailing duty investigations on steel products, which have had a significant impact on the import surge. According to the preliminary import figures for August released last week, steel imports are down 29 percent compared to August 1998. In particular, imports of hot-rolled steel are down 64 percent from their high point last fall, with imports from the three countries subject to antidumping and countervailing duty investigations -- Japan, Russia and Brazil -- down 99 percent.





While the U.S. trade laws are effective in addressing unfair trade, I want to emphasize that they are not an impediment to legitimate trade. Over the past few years, I have heard from some of our trading partners that our strong and vigorous enforcement of these laws is a serious barrier to trading with the United States. Let me put that myth to rest.



The U.S. market continues to be the most open market in the world. In 1998, total U.S. imports were approximately $900 billion. Only about $4 billion of those imports were covered by antidumping duty orders. That means that 0.44 percent - less than one-half of one percent - of our worldwide imports were covered. Even if imports covered by countervailing duty orders were added in, the figure only increases to 0.50 percent.



Of course, exaggerating the impact of antidumping actions, as some have done, makes it easier for them to argue for negotiations on the WTO Antidumping Agreement in the New Round. We reject that idea.



WTO Members have not yet had much experience with the Antidumping and Subsidies Agreements, particularly in the areas where the Uruguay Round made significant changes. Even in the United States, while we are conducting our sunset reviews in a fully WTO-consistent fashion, we are still in the early stages of completing such reviews, which are required to be conducted every five years to determine if antidumping or countervailing duty orders should remain in force and are a major new feature of the Antidumping and Subsidies Agreements.



Moreover, while members like the United States are administering new laws under the WTO Antidumping Agreement, a significant number of members are just now enacting legislation or regulations implementing the requirements of the WTO Antidumping Agreement. Others are still putting into place the structures, including personnel, necessary to conduct investigations and some are only now conducting their first cases under the new Agreement.



So far, the Agreement has been working well, which is reflected in the relatively few dispute settlement proceedings in this area. The three panels that have been convened so far have largely focused on discrete, technical issues which can best be addressed through dispute settlement proceedings to determine if the Agreement was properly applied to the facts. In light of the WTO's limited resources and already full agenda, the WTO should place its attention on improving, clarifying and facilitating the implementation of existing antidumping and subsidies rules, rather than negotiating a new body of more complex and elaborate rules.



We intend to use all means available to ensure proper implementation of the WTO rules by our trading partners. We have been and will continue to use dispute settlement where appropriate to address concerns about foreign cases against our exporters that do not follow the rules. In addition, we intend to intensify ongoing efforts in the WTO Antidumping Committee's Ad Hoc Group on Implementation, where work on this subject has been yielding constructive results. In the Ad Hoc Group, members can focus their efforts on sharing their experiences, clarifying interpretations and improving technical assistance to permit all members to use antidumping measures effectively and in full conformity with WTO obligations.





We support a commitment to technical assistance that will enable new users -- developing countries in particular -- to implement properly the very complex requirements in the Antidumping Agreement. We believe that implementation, not renegotiation, is important not only because the United States is a user of trade remedy laws, but also because proper implementation by our trading partners will safeguard the interests of U.S. exporters. In the end, helping other nations to implement these agreements fully, as we have, will go a long way toward promoting full integration of the global economy.



Similarly, although genuine issues of competition are certainly relevant to realizing the benefits of market access negotiated in the WTO, we also do not want negotiations on trade and competition included in the new Round. Some of our trading partners view this as a vehicle for amending the antidumping laws. Eight years of tough negotiations on the Antidumping and Subsidies Agreements during the Uruguay Round resulted in strong measures against dumping and unfair subsidies, and we do not want to see those efforts reversed in a new Round.





Intellectual Property and Other Agreements



I also want to stress that compliance with other WTO agreements, both in terms of ensuring enforcement of our trade rights under existing obligations, and compliance with upcoming deadlines for implementing Uruguay Round commitments are of extremely high priority.



Developing countries, comprising the majority of the WTO members, were given until the end of this year to come into compliance with key Uruguay Round commitments, particularly the Trade- Related Aspects of Intellectual Property (TRIPs), Trade-Related Investment Measures (TRIMs), Subsidies, and Customs Valuation agreements. These are vital parts of the overall balance of concessions made by nations at the end of the Uruguay Round. We have kept our commitments, and we insist that others do the same. When we look at intellectual property (the TRIPs agreement), for example, company after company have made it clear to the Commerce Department their number one priority is that the less developed countries keep their promises and implement these agreements fully and on time. We intend to work hard for that, and to work with USTR for full recourse to dispute settlement or use of U.S. trade laws if necessary.



We agree fully with the need to help the most impoverished nations experience greater economic growth. It is important to understand, though, that in order to obtain economic growth, the least developed nations must open their markets to trade and investment and must practice principles of good governance. It is openness that brings growth. So while we agree with the need for a special sensitivity for the requirements of the least developed countries, we see no inconsistency with requiring these countries to provide genuine market access to our goods and services and to live up to their commitments in the WTO.













I want to point out, moreover, that the United States has been by far the largest export market for developing countries. U.S. imports from LDCs account for over 20 percent of their global exports -- three times as much as Japan, the second-leading market for their goods. In fact, the United States imports more from LDCs than do their next three largest markets combined! While we need to focus on the needs of the least developed nations, it is certainly time for other industrial and advanced developing nations to step up and do more than they have.



We also need to vigorously pursue trade agreements compliance on the part of developed countries and ensure that we enforce our trade laws. There is little benefit in negotiating agreements without ensuring that the agreements are honored and that American firms and workers get the full benefits and opportunities intended. Getting what we bargained for is good for American business and American workers and is one of the best ways to build confidence that trade agreements actually work. I have made trade compliance a priority within the Commerce Department, and we are working aggressively through our trade compliance initiatives as well as working very closely with Ambassador Barshefsky's Trade Agreement Enforcement unit.





NON-AGRICULTURAL TARIFFS AND MARKET ACCESS



Let me now turn to the need for further reductions of non-agricultural tariffs abroad. As I have indicated, there is a serious disparity between our tariffs and those in many other countries, particularly in Asia and Latin America. Many of our most competitive exports still face tariff barriers overseas that can be several times as high as those levied by the United States.



Accelerated Tariff Liberalization



Our first goal is completion of the Accelerated Tariff Liberalization initiative (ATL) by the time of the Seattle Ministerial meeting. The ATL, which is an initiative of the Asia Pacific Economic Cooperation (APEC) process, would eliminate or substantially reduce duties in eight sectors -- chemicals, energy, environmental goods and services, fish, forest products, gems and jewelry, medical and scientific equipment, and toys. At the recent APEC Ministerial meeting in Auckland, I was pleased that APEC Ministers issued a strong statement in support of efforts to conclude agreement on the ATL in the WTO in 1999.



The ATL sectors are enormously important to the United States. They account for $198 billion of U.S. exports -- 29 percent of all U.S. merchandise exports. U.S. exports in the ATL sectors last year supported 2.2 million American jobs -- more than one in every four jobs related to merchandise exports. The ATL's elimination or substantial reduction of duties would go a long way toward eliminating some of the sharp tariff disparities that now exist.













The agreement would be of global benefit. For example, the European Union, which currently is resisting reaching agreement at Seattle, would benefit at least as much as the United States. The European Union has been giving one reason after another for refusing to work with us on this initiative, including saying that these sectors were not chosen by them and are not commercially interesting to them.



A recent Commerce Department study of detailed European trade data, though, shows that 31 percent of the EU's global exports (even excluding intra-EU trade) are in the ATL sectors -- an even higher percentage than for the United States. I am hopeful that with the new European Commission, the EU will take a new and more open-minded view of the ATL, and that the additional information developed by Commerce's International Trade Administration can help bring Europe on board and get this valuable initiative moving to a successful conclusion by Seattle.



Recently, there were concerns raised in Washington about whether the goal of achieving agreement on the ATL by the time of the Seattle Ministerial -- an "early harvest" -- would impede the attainment of our vital agricultural goals for the new round. The Administration's position has consistently been that aggressive reform of agricultural trade is at the heart of U.S. negotiating objectives in the new round. Achieving an agreement on ATL at Seattle is completely consistent with our agricultural goals, and in no way will detract from their attainment. In fact, our approach to ATL provides stronger incentives for a successful conclusion of agricultural negotiations.



Following lengthy consultations with the agriculture community, business, and members of Congress, the U.S. position is that any agreements reached at Seattle or early in the new round should only be implemented on an "interim" basis pending the final acceptable conclusion of all new round issues, including agriculture. We are committed to ensuring that interim results will be considered fully as an integral part of the overall balance to be determined at the conclusion of the new negotiations. This approach has been accepted by the APEC Ministers, whose declaration states, " ... implementation should be undertaken on a provisional basis with full and final binding as part of the conclusion of the single package." Failure to reach full agreement, including on agriculture, would mean that the ATL tariffs could return to their original levels. This is a powerful incentive for success on a wider package.



ITA-2



We are also working for agreement at Seattle on lower tariffs in information technology products, the so-called "Information Technology Agreement -2" (ITA-2) to broaden the product coverage of the highly successful Information Technology Agreement (ITA) concluded in 1997. The ITA agreement eliminates tariffs on information technology products on the part of countries accounting for the vast majority of trade in these goods. One- third of our growth has come from information technologies. A successful ITA-2 will eliminate tariffs within four years on many products which were not covered in the original ITA.





E-Commerce



Tariffs related to electronic commerce are also on our agenda for Seattle. E-commerce is now growing faster than even the most optimistic forecasts. Current estimates are that within a few years, more than a trillion dollars in business transactions will be done over the internet. The role of government is to enable e-commerce to grow and develop at its own pace. In other words, do not over-regulate or over-tax. Stifling e-commerce would be bad for the long-term economy of America and for the rest of the world. By the Seattle Ministerial, our goal is to have agreement within the WTO to extend the current moratorium on tariffs on electronic transmissions. Ultimately, we want to reach agreement on permanent duty-free cyberspace.





Other Tariffs and Market Access Barriers



In addition to these agreements, we have other tariff objectives to pursue as part of the new round itself. We seek reduction in tariffs on a broad range of industrial products. Given the disparity between U.S. tariffs and many foreign tariffs, it is particularly important to us that we use applied rates rather than bound rates as the basis for any broader tariff negotiation. We must negotiate from applied rates and then get those new, lower, applied rates bound. This is necessary in order to obtain genuine improvements in market access. The reason this is important is that many countries apply tariffs that are lower than the rates they have bound in the WTO. A country may, for example, have bound a tariff at 40 percent, but may actually be charging a tariff of 15 percent. If that country negotiated a reduction in its bound rate, it could cut it in half and still end up with a bound rate higher than the rate it is actually charging. We would make a real cut and get nothing in return.



Additionally, standards, testing and certification procedures, regulations that are not based on legitimate health or safety needs and a scientific basis, and many other forms of barriers are still formidable obstacles. These need also to be considered in market access discussions.





SERVICES



Services are an extremely important part of our economy, but have lagged far behind goods in terms of global trade liberalization. In 1998, service industries provided over 86 million U.S. jobs and accounted for 78 % of private sector output. Last year, our commercial services exports were $246 billion (excluding military and government services), and returned us a trade surplus of $83 billion. Services are helping to drive the global economy as well. Global services trade -- approximately $1.3 trillion annually -- accounts for more than 22% of world trade and more than one in every seven dollars of global production.













In this round, we are seeking to expand the first multilateral agreement on services --GATS-- which was concluded as part of the Uruguay Round in 1994. The GATS established a framework for rules applicable to trade in services and established MFN treatment as its standard. However, many countries only made a limited number of specific commitments -- and frequently only standstill commitments. We need to see trade in services liberalized by expanding market access and broadening and deepening services commitments made by WTO members. We need to increase the number of industry sectors listed in each country's schedule and deepening commitments. Another important objective is to promote regulatory reform, so that domestic regulations do not unnecessarily restrict trade.



This new round offers the opportunity to liberalize a broad range of services sectors. Commerce is consulting with industry to ensure full awareness of their interests, objectives and concerns by coordinating closely with U.S. industry advisors and through industry policy round tables, organized by our Office of Service Industries. Recent round tables have included healthcare, education and training, express shipping, subscription television, distribution services, energy services, and hotel management and operations. It is clear that deeper commitments should be sought in finance and telecommunications, together with fundamental improvements in the commitments on distribution, audiovisual, construction, travel and tourism, the professions, education and healthcare services, and new commitments in energy and environmental services and transportation, especially express shipping.





TRANSPARENCY IN GOVERNMENT PROCUREMENT



Another important objective for us is agreement by the time of the Seattle Ministerial on transparency in government procurement. Only a small number of WTO members have signed on to the existing plurilateral Government Procurement Agreement. Most WTO members currently have no binding obligations in this area, and a new global agreement on transparency in government procurement would address what U.S. companies have told us is one of the most significant barriers to participation in global government procurement markets -- a pervasive lack of transparency and due process in procurement procedures.



A transparency agreement in government procurement would ensure that American companies would be able to obtain information about what procurement opportunities exist, the conditions for participation in contracts, and award criteria. This would significantly help level the playing field in the huge global government procurement market, which has been estimated at over $3 trillion annually, or as much as 10 to 15 percent of global GDP.



This is a win-win issue because developing countries are themselves greatly damaged by lack of transparency, and their economic development is impaired by the corruption and bribery which results from lack of transparency. The Asian Development Bank reports that up to 50 percent of the revenue of some countries is wasted through corruption, and that bribery can double the cost of government purchases.







This agreement goes hand-in-hand with the OECD Antibribery Convention which went into effect this year. This is an objective that the Congress and I sought for a long time. The stakes are huge. Over the last five years, we received allegations that bribery of foreign public officials influenced decisions on nearly 300 major commercial contracts valued at about $145 billion.



Commerce staff are working closely with USTR and State to bring this agreement to the point at which it can be adopted in Seattle. We are making good progress, and a growing number of countries are signing on to the idea.





LABOR AND ENVIRONMENTAL PRIORITIES



While globalization and trade liberalization contribute to prosperity, there are consequences to such growth that must be addressed. Market expansion, economic interdependence and globalization also cause severe dislocations. The answer is not to revert to protectionism, or to halt globalization - but to address the concerns of those not riding the tide of prosperity.



The National Trade Education Tour that I have been conducting around the United States has shown clearly the extent of concern. Americans are concerned that trade rules disadvantage them and do not address certain disruptions and concerns. People see layoffs, not payoffs, when it comes to trade. They also believe that trade rules are set in disregard of the concerns of consumers and workers and are generated in invisible ways giving people no voice in the process that so vitally affects their economic future. The WTO process must be made more human and transparent. People must be able to see and understand that the global trade system works for them and the environment in which they live.



We know that one measure of the success of the world trading system must be whether workers benefit from the economic growth and development that trade can bring. In the WTO's First Ministerial Conference in Singapore, WTO members renewed their commitment to the observance of core labor standards. While this was an important first step, it is time to build on that agreement and move forward. More work is needed in the WTO to assist governments and business as they grapple with the troublesome issues of globalization and adjustment. We want a work program in the WTO which addresses trade issues and their nexus with labor issues, including further work on how the implementation of core labor standards affects trade flows. We want to see elimination abroad of exploitative child labor and increased respect for internationally recognized core labor standards. We also support closer cooperation between the WTO and the International Labor Organization to facilitate work on both trade and labor. The Administration will be introducing a proposal in the near future with specifics on how to move forward on this issue.



The President's Export Council has made its views known on this important issue in its letter this week. Let me quote from it.









"The PEC believes that the development of the global trading system must proceed in parallel with efforts to ensure respect for core labor standards and its results must include benefits for working people in all nations. The Singapore Declaration of core labor standards was an important first step ... More work is warranted as governments and business grapple with the complex issues of globalization and adjustment. There is a mutually reinforcing relationship between core labor standards and trade liberalization so that adherence to such standards does not negatively affect the economic performance of developing countries." Along with its other recommendations on this issue, I think the PEC has made a tremendous contribution to progress, Mr. Chairman. It is a significant step.



The key motivating factor for our efforts of course is to simply do what is right for workers here and elsewhere. But a second benefit of our efforts will be to increase public support for further trade liberalization efforts. It is clear that a more comprehensive global trading system can indeed be achieved if there is confidence worldwide among workers that their rights and standards of living will not be jeopardized. The WTO must also become more transparent in its workings, and interest groups must be able to voice their views and see how the process works.

We must also be able to show that the trading system supports high environmental standards. Trade and protection of the environment must be mutually reinforcing, and we must ensure that trade liberalization contributes to sustainable development. We have proposed using the WTO's Committee on Trade and the Environment (CTE) to identify and discuss the environmental implications of the round.



The CTE, without serving as a negotiating forum, can provide important input into both national deliberations and the actual negotiations as it reviews environmental issues in all areas of the round on a continual basis. Further, the United States has also committed to perform a written environmental review of the likely consequences to the environment of the new round. The review will allow for public input and will be sufficiently early in the process to take the potential positive and negative environmental effects into account as we formulate our positions.



Additionally, we are seeking concrete accomplishments that will benefit the environment. I would like to single out one particular goal that the Commerce Department, particularly given its role in fisheries, is seeking in the new round -- the worldwide elimination of trade-distorting and environmentally-harmful fisheries subsidies. Recent studies by the FAO have highlighted the dire condition of global marines resources: over 60% of the world's fisheries are either fully exploited, over-exploited, depleted or slowly recovering from the effects of over-fishing. World Bank reports highlighted the large scale of government subsidies in this sector - about $14-20 billion annually. These subsidies lead to overcapacity in this sector and are one of the causes of the depletion of fisheries resources. These subsidies are also trade-distorting: they lead to overproduction and encourage inefficient producers to remain in the market. Elimination of agricultural export subsidies will also benefit the environment. As another concrete accomplishment, the elimination of tariffs on environmental goods and substantial liberalization of environmental services will also directly contribute both to economic growth and development, as well as environmental protection.

ASSISTING SMALL EXPORTERS



One thing that has not been stressed enough in previous trade rounds is the role of small business in global exports. The day is long gone when exporting was important only to the Fortune 500. While most of the dollar value of exports still comes from large firms, the vast bulk of exporters are small and medium-sized firms. In fact, a study that the Commerce Department conducted jointly with the Small Business Administration shows that of the 113,000 U.S. enterprises engaged in exporting, 97 percent are small and medium-sized firms. Helping small businesses export is one of the central missions of the Commerce Department. If we are to succeed in expanding the contribution of exports to our economic growth, we need to enlist the drive and creativity of America's small business sector.



These firms will certainly benefit from the trade liberalization goals we have outlined as priorities for the new round, but in the Commerce Department's discussions with smaller firms it is clear that the present complexity of customs and other trade procedures are in themselves a huge trade barrier. Small companies tell us that one of their most important needs is the simplification of customs clearance procedures, with lower costs and faster clearance of goods through customs. Improving customs and other procedural aspects of trade goes by the term "trade facilitation". In July the United States tabled a proposal in Geneva with specific ideas on how to make progress in this important area.



The costs of transacting small amounts of trade will become an even more important factor as e-commerce grows and smaller firms become even more significant in international trade. Work in this area will also benefit firms from less advanced economies and allow them to participate more effectively in the global economy.





CONCLUSION



Mr. Chairman, we are on the verge of launching a new trade round that will build, to a great extent, on the sound framework created by previous rounds. I am working closely with our private sector, directly and through our advisory committees, to ensure that the new negotiations will strengthen the multilateral trade framework necessary for America to increase its exports and to thrive into the 21st century. At the same time, I recognize the need to address the voices of our other stakeholders - our workers, consumers, and environmentalists - to ensure trade does not undermine our other vital goals.



Through my National Trade Education Tour, I have been working intensively with all of these stakeholders to form a domestic consensus for trade which is so essential to continued trade liberalization. It would be more than unfortunate - it would be economically disastrous - to allow misinformation and misplaced apprehension to divert us from action which has repeatedly been shown to be most productive for the country. That is why I continue to reach out in an effort to begin to bridge the differences among the groups and forge a national consensus on the importance of trade for America's continued prosperity.