The President's Export Council ("the
Council") was first created by Executive Order on December
20, 1973. Originally, the Council consisted of only private
sector members drawn from business and industry, mostly
CEO's of major U.S. companies. Eight of the members were
chosen "without regard to geographic considerations."
Twelve members were selected to provide appropriate regional
representation. The Council advised the President on matters
relating to export trade and report this advice to him through
the Secretary of Commerce. Members served "at the pleasure
of the President." Thus, a change in Administrations
would bring a change in the Council. The Council's activities
and operations were subject to the Federal Advisory Committee
Act.
Since its inception, the Council's mission
has remained fundamentally unchanged: it advises the President
through the Secretary on export enhancement and works with
industry encouraging U.S. companies to increase exports
and enter new markets. Its members serve at the pleasure
of the President and its activities are subject to the Federal
Advisory Committee Act. On the other hand, changes to the
Council's structure have elevated and expanded its voice
in matters of export trade.
STRUCTURAL DEVELOPMENT OF THE COUNCIL
A major structural change was announced in
September of 1978 by President Carter, who indicated his
intention to reconstitute the Council to include representatives
from industry, agriculture, labor, the Executive Branch
and Congress. President Carter also appointed representatives
of small and medium-sized business concerns, women and minorities.
Council membership would no longer be balanced only along
geographic lines. Rather, the Council now included representatives
of key groupings within the private and Government sectors.
The concept was to try to build consensus among all segments
of the economy. Adding Congressional Members (five United
State Senators, five House of Representatives) and the heads
of seven Government agencies (Commerce, Agriculture, Labor,
State, Treasury, USTR, and Export-Import Bank of the United
States) was necessary because "historically the responsibility
for implementing most of the recommendations [on export
expansion] has rested principally with the President and
Government agencies other than [the Department of Commerce],"
according to the 1979 annual report submitted to the General
Services Administration.
In 1995 and 1999 the PEC Charter was amended to add the
Small Business Administration and the Department of Energy,
respectively, as Executive Branch members of the PEC.
In 2003 the PEC Charter was amended by President
George W. Bush adding the Department of Homeland Security
as Executive Branch members of the PEC, thus bringing the
total of ten heads of Government agencies represented on
the Council.
The Subcommittees of the Council
Two separately chartered, permanent subcommittees
were added to the Council: the President's Export Council
Subcommittee on Export Administration ("PECSEA"),
established in 1976, to advise on Government regulations
and policies that control trade for national security and
foreign policy purposes; and, the President's Export Council
Subcommittee on Encryption (PECSENC), established in 1979,
to advise on future key recovery, including evaluating the
developing global key architecture, assessing lessons learned
from key recovery implementation, advising on technical
confidence issues, addressing interoperability and standards
issues, and identifying other technical, policy, and program
issues for government action. These subcommittees were originally
proposed as separate entities that would report to the Secretary
of Commerce; however, by making PECSEA and PECSENC permanent
subcommittees of the Council, the subcommittees reporting
level, authority and effectiveness were elevated.
Since the 1979 reconstitution, successive
Councils have created an Executive Committee and from three
to six Subcommittees to perform their work. Only the two
separately chartered subcommittees, PECSEA and PECSENC,
have members who are not represented on the parent Council.
However, the position of Chair for PECSEA and PECSENC are
on the parent Council. The Council has used subcommittees
to identify issues and develop recommendations or programs
for the full Council. The subcommittees cannot make decisions
independently of the full Council. However, the two separately
chartered subcommittees, PECSEA and PECSENC, make recommendations
that are then reported to the full Council.
RECOMMENDATIONS AND ACCOMPLISHMENTS
Under different Administrations, the Council
has identified barriers to and opportunities for U.S. export
enhancement. Certain issues have been a mainstay for Council
attention: foreign market development; trade liberalization
through multilateral and bilateral agreements; the effects
of U.S. law, such as tax and antitrust law, on U.S. export
performance; concern over export controls for national security
and foreign policy reasons; and the effectiveness of U.S.
trade promotion. The Council has encouraged U.S. industry
to enter new export markets and has, through the operations
of the PECSEA, made industry-Government dialogue on export
controls a regular feature of regulation and policy-making.
All of past Council's recommendations and
achievements are reported annually under the Federal Advisory
Committee Act. However, the Council itself has no required
reports. The Council has usually chosen to submit ad hoc
recommendations to the President rather than lengthy reports.
Nevertheless, since 1980, the Council has always prepared
a major report to the President at the end of each Presidential
term.
What follows are selected examples of the
Council's work over the years:
o From 1973 to 1979, the Council made some fifteen recommendations
to President Nixon. These included recommendations about
changes in U.S. tax laws affecting exports; comments on
an Office of Management and Budget (OMB) draft report on
U.S. Government Export Promotion Policies and Programs;
a response to a request from the President and the Chairman
of the United States Export-Import Bank (Eximbank) for the
Council's views on the "threatened dilution of the
Eximbank as a competitive source of export financing for
U.S. firms;" and recommendations on the metric system,
export control bottlenecks, and the importance of East-West
trade. This Council also produced a report on the need for
a consistent, future-oriented U.S. foreign trade and investment
policy. After two and one half years of dialogue with representatives
of Justice Department's Antitrust unit, the Council helped
the Department of Commerce develop the "Antitrust Guide
for International Operations."
o From 1979 to 1980, President Carter's Council
made a number of recommendations summarized in its December
1980 report to the President. Many of these recommendations
contained broad policy directions for U.S. approaches to
international trade negotiations and other policies, urging
changes in legislation or regulations.
Among the most significant accomplishment
of this Council was to convince his Administration to fully
support tax relief for Americans working abroad. Once the
Administration changed its position, the way was paved for
the tax bill signed on August 13, 1981. This bill provided
for substantial exclusion from U.S. taxation on foreign
earned income. In addition, the this Council made recommendations
that ultimately resulted in passage of a bill that gave
the Office of Private Investment Corporation (OPIC) a clear
trade mandate and eased restrictions on the operation of
OPIC programs in upper income countries. Export controls
were relaxed where U.S.-origin, COCOM-controlled goods were
reexported. It is this Council that called for the passage
of export trading company legislation.
o During 1981 and 1982, the Council continued
to urge passage of the Export Trading Company Act, amendments
to the Foreign Corrupt Practices Act, and a bill to give
the Government a negotiating mandate in trade in services.
In response to a Council recommendation, the Department
of Agriculture prepared a study on the use of export trading
companies by U.S. agriculture companies. At the prompting
of the Council, the Department of Commerce organized an
internal task force to study alternative approaches to the
provision of financing for U.S. exports, which led to an
inter-agency review under the auspices of the Cabinet Council
on Commerce and Trade.
o In the period from 1983-84, the Council
sponsored a series of conferences on specific service industries.
The three conferences brought together industry representatives,
government officials and Council members to discuss the
international trade problems faced by the insurance industry,
the leasing industry, and the architecture, construction
and engineering industries. The Council encouraged the Government
to recognize the role of state regulators in trade negotiations
on insurance. The Council's work resulted in the inclusion
of leasing provisions in the Treasury Department's model
tax treaty used as a basis for negotiations with other countries.
The Council also initiated changes in ExIm
Bank's leasing financing programs, and in 1984, issued a
White Paper on Industrial Targeting, drawing attention to
practices by Japan and other countries that would affect
long-term U.S. competitiveness.
o In 1985-88, the Council helped to develop
a national consensus on the importance of competitiveness
through establishment of its Competitiveness Subcommittee.
During the late 1980's, the deterioration in the U.S. merchandise
trade balance was regarded as a problem in U.S. competitiveness.
The Council sponsored debates among noted academics and
proposed economic and trade policy strategies including
recommendations on strengthening the U.S. research base
and work force skills, accelerating commercialization of
new technologies, producing quality products and winning
new global markets. As a result of Council deliberations,
two Congressional members initiated a GAO study on the causes
of the trade deficit that helped decision-makers focus on
exchange rates. During this time, the Council also recommended
the creation of a single agency department on trade.
In 1988, the Council sponsored a major conference
in San Francisco of all trade groups and District Export
Councils in the West with hearings on the General Agreement
on Tariffs and Trade (GATT) multilateral trade negotiations,
regional trade problems and the state of U.S. manufacturing.
o At the end of the Reagan Administration,
the Council issued a report containing forty recommendations.
The Council intended its report to help the new Administration
set its trade policy agenda. The Secretary of State arranged
for the report to be sent to all U.S. embassies abroad to
heighten awareness of the importance of the trade issues
raised by the Council. These included support for the multilateral
and bilateral trade negotiations, then on-going, and explicit
support for the ground-breaking U.S.-Canada Free Trade Agreement
that went into effect on January 1, 1989.
In 1990, the Council urged that both Eximbank
and the Agency for International Development (AID) be given
resources and an adequate mandate to level the playing field
for the U.S. in mixed-credit competition. On May 15, 1990,
Eximbank and AID announced the creation of a $500 million
tied-aid pool combining Eximbank and AID funding to advance
U.S. development and commercial interests.
o From 1991- 1992, the Council studied export
promotion problems and urged increased authority for the
Trade Promotion Coordinating Committee, including the power
to rationalize the export promotion budgets of U.S. Government
agencies. Congress gave the TPCC expanded functions at the
end of 1992.
Also in 1992, the President announced his
intention to eliminate recoupment fees on U.S. export of
items derived from defense contracts and specifically cited
consultations with the Council as bringing about the decision
to change the policy. The Council had held a hearing, made
recommendations to the President and consulted with business
groups, OMB, the Defense Department and White House staff.
The Council monitored the Defense Department's implementation.
That same year the Council sponsored a trade
mission to Taiwan in connection with that country's $300
billion Six-Year Development Plan. While U.S. policy restricted
official high-level representation, other governments were
sending Cabinet-level officials to promote their countries'
exports. The Council, with its unique status and "Presidential"
image, stepped in to "carry the flag" for U.S.
commercial interests.
At the end of the Bush Administration the
President's Export Council issued its report to both President
Bush and to President-Elect Clinton which made 36 recommendations,
many of which were incorporated into the National Export
Strategy.
o Between 1995 and 1997, the Council sent
to the President a total of 13 reports which encompassed
a variety of issues and concerns. One of these reports recommended
that the level of the Small Business Administration (SBA)
export working capital guarantee, which had recently been
lowered to 75 percent, be restored to its former level of
90 percent. Since the Council issued its recommendation
to the President, a bill which reestablished the 90 percent
level was passed by Congress. In addition, the SBA incorporated
the PEC's report into its study on the impact of legislation,
which was requested by Congress.
Responding to a request from the White House
in 1996, the Council undertook a study of unilateral economic
sanctions, producing a first-ever catalog of unilateral
sanctions. The Council assessed the impact of sanctions
on U.S. economic interests and recommended specific actions
to improve policies and processes. In additional separate
reports, the Council focused on specific issues as they
affect trade with India, China, Japan, the NIS and Brazil.
Also during this period, the PEC initiated
an innovative program called the Virtual Trade Mission,
using videos, workbooks, CDs and online programs to provide
students with "hands-on" experience in building
export markets around the world. After a very successful
first year, with pilot programs in twelve schools across
the country, the Virtual Trade Mission has become a separate
incorporated non-profit organization.
o Between 1997 and 1999, the PEC developed
eight letters of recommendations. In response to the PEC's
June 1997 recommendation that the impact of unilateral economic
sanctions on export activities needed to be thoroughly analyzed,
the White House asked the PEC to undertake a report that
described all existing sanctions and to assess the impact
of unilateral sanctions on U.S. economic interests and recommend
specific actions to improve policies and processes. In the
PEC's June 1997 report, "Unilateral Economic Sanctions:
A Review of Existing Sanctions and Their Impacts on U.S.
Economic Interests With Recommendations for Policy and Process
Improvement," the PEC concluded that existing sanctions
comprise a complex and growing web of restrictions and legal
impediments in the international trading system and recommended
policies and processes to overcome what the PEC believed
was an absence of transparency and discipline in dealing
with the countries against which unilateral economic sanctions
are being imposed. At the time, the report did not undertake
to review sub-federal foreign policy sanctions, and, in
follow-up to the report, the PEC forwarded two letters of
recommendation to the President: 1) Sub-Federal Economic
Sanctions (dated June 2, 1998) noted the increased use of
secondary boycotts by state and local governments to sanction
those who trade in or with certain foreign countries. The
PEC urged the President to direct an early assessment of
whether federal initiatives might be appropriate in respect
to such actions that may impinge upon federal responsibilities
in the areas of foreign and trade policy; and, 2) Foreign
Policy-Based Unilateral Sanctions (dated, April 14, 1999)
was written in response to Under Secretary of State Stuart
E. Eizenstat's 1998 testimony on the Hamilton-Luger bill
regarding reform of unilateral sanctions policies and processes.
The PEC was expressing concurrence with the Administration's
principal policy recommendations of the PEC's 1997 report.
The PEC was concerned that disagreement between the Administration
and the Congress over certain aspects of the bill might
prevent adoption of these recommendations, which were designed
to make the imposition of sanctions more disciplined and
to lessen avoidable burdens on U.S. workers and economic
interests. The PEC suggested that the Administration proceed
immediately with the improvements supported in the testimony
of Under Secretary Eizenstat so that Congress may be encouraged
to follow the example.
November 1998 marked the 25th Anniversary
of the PEC, and, in recognizing the many opportunities and
challenges it faced, the PEC members made trade education
their number one priority issue they hoped would become
their lasting legacy. During the November 10, 1998, full
Council meeting, the PEC hosted a 'National Town Hall Meeting
on Trade.' In conjunction with the Virtual Trade Mission
Foundation (a non-profit educational organization created
by the private-sector leadership of the PEC in 1996), this
program was the first-ever meeting between America's top
trade business leaders from the PEC and a national audience
of students, teachers, employees, and small business leaders.
The discussion centered on the PEC's theme: "Building
a New National Consensus on Trade for the 21st Century,"
and President Clinton provided the keynote address.
During the April 14, 1999, Council meeting,
the PEC members continued with their work on trade education
and teamed up with the Department of Commerce, the U.S.
Chamber of Commerce (USCOC), the Business Roundtable (BRT),
and other organizations active on international trade issues
in launching, "Trade Globally, Prosper Locally: The
National Trade Education Tour." The objective of the
National Trade Education (May thru November, 1999) is to
promote a greater understanding of the importance of international
trade at the grass roots level. It involves a coordinated
effort between community business leaders; federal, state,
and local government officials; workers and labor unions;
as well as consumers in developing a new national consensus
on trade.
