nomic growth has been expanding international trade under the oversight of the WTO.

Almost 12 million U.S. jobs are supported by exports. When we increase exports in particular, we are increasing the number of high-wage, high-tech jobs in cities and towns across America.

The U.S. wins with fair rules that are promoted by an institution that has the moral authority to ensure that they are followed. Americans instinctively understand principles of fair play, and I believe overall support for the WTO will build as understanding grows about how this institution promotes economic growth worldwide. The high visibility of the meeting in Seattle creates a great opportunity to expand appreciation of this important institution.

The dispute settlement mechanisms of the WTO have in general worked in our favor. Of the cases brought by the U.S., we have won or favorably settled 22 and lost only two. We must assure, however, that our trading partners, particularly the European Union, come into compliance quickly when the WTO rules against them. Despite our tremendous record in the WTO, I am very concerned about the recent decision against the U.S. foreign sales corporation provision. We will hold a hearing in the Ways and Means Committee in the fall to discuss this issue.

With that, I want to recognize the Ranking Member of the Subcommittee and thank him for helping us assemble such a distinguished set of witnesses for our discussion today.

Mr. Levin.

Mr. LEVIN. Thank you, Mr. Chairman. And before I start with my opening statement, I would like to apologize on behalf of I would think all the Members and surely those on the Democratic side. This hearing as it turns out is being held at the same time as the floor action on the tax bill, and so some of us will be ducking in and out, and I will be leaving after this to participate in the debate and come back as soon as I can.

And, again, many of the Members will be in and out and we are sorry that this hearing is being punctuated. There is also, for Democrats, a third event going on at this very same time and as I look around, it is only Xavier and I who are not there.

Mr. Chairman, thank you for calling today's hearing, on the important subject of the upcoming WTO ministerial meeting to be held in Seattle later this year. It promises to be a historic situation marking the launch of the next round of world trade negotiations. It will be the largest trade event ever held in and hosted by the United States.

In any major undertaking, the first steps are often critical ones. They define the shape of the endeavor. They give direction to the task at hand. This will be especially so in Seattle as the 134 countries initiate a new effort to develop rules that will govern the course of trade in the next millennium. As host of the ministerial, the United States will have an opportunity, indeed a responsibility, to place its mark on the new round of trade negotiations. It is of the utmost importance, therefore, that the administration, in consultation with Congress, clearly identify its goals for the new round and state those goals definitively in Seattle.

I know our witnesses today will describe a range of issues that they consider to be priorities for the ministerial meeting and I look

forward to hearing those views. In the interest of helping to get the discussion going, let me suggest three areas that should be high on our negotiators "to do" list at the ministerial and throughout the next round.

First, the administration should use the ministerial and other meetings to emphasize the importance of full compliance by Members with their WTO obligations. The mechanism for pursuit of that goal should continue to include the WTO's trade policy review mechanism, TPRM. It should be bolstered by requiring governments to set target dates for coming into compliance with particular commitments and make nonconfidential versions of information collected during the TPRM process available to members in dispute settlement proceedings.

Second, the United States should have as a principal goal in the next round the development of rules concerning transparency in policies and practices affecting foreign producers ability to get goods and services to customers. This should include rules and the publication of laws, regulations, rules and administrative and judicial decisions. Further, the United States should seek rules requiring defendant governments in dispute settlement proceedings to cooperate in the disclosure of evidence of government actions except where there is a clear threat to national security.

Third, the ministerial and the next round of negotiations should be the occasion for recognizing-and many of you have heard me say this before-that trade policy is more than just about lowering tariffs and eliminating traditional nontariff barriers, as important as that is. As the world economy has become more integrated, and indeed it has, issues once considered to be beyond the scope of trade policy are now very much a part of trade dynamics. Those issues include the ways in which countries regulate or fail to regulate their labor markets.

Accordingly, the United States should, among other things, support negotiating objectives that include the development of rules that ensure adherence to trade and labor standards.

Next, support the establishment of a working group in the WTO on the impact of labor market standards on trade.

And fourth, support development of ongoing institutional linkages between the WTO and ILO on trade labor market issues.

I would welcome comment on these suggestions during today's hearings, and I look forward to hearing the proposals specifically coming from our witnesses. Thank you.

Mr. Chairman, if you would excuse me for a few minutes. If they will call me in turn on the floor, I will be right back.

[The opening statement of Mr. Ramstad follows:]

Statement of Hon. Jim Ramstad, a Representative in Congress from the State of Minnesota

Mr. Chairman, thank you for calling this important hearing today to discuss our negotiating objectives at the upcoming Seattle Ministerial Meeting.

It is critical that we prepare an aggressive, strategic plan for achieving our objectives at the upcoming Ministerial. Seattle will host the largest trade event ever held in the U.S., and we must ensure that it is also the most successful for achieving greater trade liberalization for American workers, consumers, manufacturers, farmers and service providers.

I want to pay special attention to market access for U.S. agriculture commodities and value-added foods. We all know the current problems that face farmers, but the truth is that American farmers have been disproportionately hit by foreign trade

barriers for many years-despite being the largest single positive contributor to the US trade balance!

Agriculture is a difficult sector to address, but it is part of the “build-in” agenda and deserves significant attention. We must make sure not only that these discussions begin. We must also ensure they are substantive, aggressive and fruitful. American farmers deserve our best effort.

We will never accomplish our goals if nations are allowed to cling to old, marketdistorting, protection-driven programs and practices. Countries with the most blatant and arduous trade barriers for U.S. agriculture exports, such as the European Union, will fight any and all efforts to make real progress in knocking down these unfair, anti-trade practices. They will try to protect them and keep them in the "blue box." This cannot be tolerated!

We must also structure our approach at these meetings to set ourselves up for the greatest gains for agriculture as possible. I believe we should adhere to the Uruguay Round framework, which provides for a comprehensive, formula-based negotiation without exceptions. We should pursue conclusion with a single undertaking encompassing all sectors.

Mr. Chairman, thanks again for calling this hearing. I look forward to hearing from our witnesses today about the necessary elements for launching a comprehensive, successful round of multilateral trade negotiations in Seattle.

Chairman CRANE. All right. Thank you, we will proceed in the order I presented you.

Mr. Weller.

STATEMENT OF HON. JERRY WELLER, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF ILLINOIS

Mr. WELLER. Thank you, Mr. Chairman. Thank you for the opportunity to testify today. I would like to reintroduce to the Trade Subcommittee an issue that I brought before the Full Committee during the markup of the Financial Freedom Act of 1999. This issue involves the loss of 20,000 American film industry jobs from runaway film production. I want to raise this issue to urge that our domestic film industry be given a seat at the table at the WTO talks in Seattle to address the cultural content issue and its relationship to runaway film production.

The problem with runaway film production is a growing national issue which directly impacts thousands of American workers from New York to Florida, Washington to California, and Illinois to Texas. During the Committee discussion on the Financial Freedom Act, I offered an amendment which I later withdrew to introduce a wage-based tax credit and creative financing tax incentives to counter loss of film production jobs to Canada.

Remember the film "Coming to America"? Unfortunately, it seems that filmmaking jobs are now running from America. In fact, a one-time Presidential candidate once referred to that "giant sucking sound" of jobs heading south. Well, that giant sucking sound is really the sound of 20,000 film industry jobs heading north to Canada.

A recent study commissioned by the Directors Guild of America and the Screen Actors Guild shows that in 1993 over $10 billion in economic activity was lost to runaway economic film and television production. This is more than five-fold since the beginning of this decade. In the last 4 years alone, Texas has shown a 31 percent decrease in direct production revenues, while my State of Illi

nois is down nearly 20 percent. Nationally, this has resulted in a loss of 20,000 jobs.

In looking at the small businesses and jobs lost by this phenomenon, we are not just talking about directors and actors; rather, we are talking about the small businesses that support the film industry and make America great. These include caterers, hotel and motel operators, restaurants and bars, rental equipment businesses, electricians, set construction workers and many others involved in this vitally important and culturally indigenous economic activity. Over the years this industry has been a leading exporter and driver of small business job creation.

Mr. Chairman, this is a constituent issue which we should take seriously. This is also a constituent issue for you and other Members of the Subcommittee. I come from a district which includes Joliet, Elwood and Calumet City, the home of Joliet Jake and Elwood Blues, which I often refer as the "Blues Brothers" district. Last year, my constituents and I were stunned when they decided to make the film "Blues Brothers 2000," they chose to film it in Toronto rather than Chicago. Even more embarrassing was the fact that the Canadian filmmakers were calling the Chicago Film Commission to ask them how to best portray Chicago.

With my statement I have included the Directors Guild and Screen Actors Guild study explaining the reasons why the film industry is moving out of the country, and they have concluded that one of the many reasons is the tax incentives offered in other countries like Canada, Australia and the United Kingdom, which we do not have here in the United States. Canada alone offers Federal and provincial tax credits between 22 and 46 percent of labor costs. These incentives are enough to make any business consider relocating, particularly when savings from filming in Canada can mean a dollar savings overall.

The United States shouldn't be put in a competitive disadvantage by tax incentives offered abroad. Rather we need to level the playingfield for the small businesses impacted by the runaway production and create jobs in America, for Americans.

Related to this is an issue of Canadian cultural content policy. The Canadian government has given certain "cultural industries" special treatment. This policy has been implemented in large part by Canadian legislation as well as some foreign trade issues such as tariffs, taxes, foreign investment restrictions and content requirements that discriminate against U.S. cultural industries. Canada has consistently protected its cultural industries.

This has been discussed and negotiated in the past. I believe that it must be addressed in Seattle with the backdrop of the issue of runaway film production. We have a situation in which thousands of U.S. jobs are being lured to Canada and other countries through favorable tax treatment, while at the same time cultural policies established by the Canadians and others discriminate against U.S. interests thereby creating a double hit to industries like our domestic film production.

Mr. Chairman, even if the problem of runaway production had not become so great, the Canadian insistence on maintaining cultural content rules and regulations, ought to be put on the table at the Seattle WTO talks. However, simple fairness requires response

by the United States to the increasing efforts by Canada to attract production away from the United States. So long as these efforts continue, the U.S. must address the Canadian cultural content rules. Canada cannot unilaterally decide to invite in our productions jobs, but close the door on American domestic productions.

Mr. Chairman, with the problem of runaway film production in mind, I ask that the issue of cultural content be placed on the table and addressed at the WTO talks in Seattle. Let's be honest about this issue of runaway production. It is all about jobs. The average film industry worker earns $26,000 a year. This Congress has given great attention, and the right kind of attention, to the loss of 10,000 steel industry jobs over the past year. The film industry has lost over 20,000 jobs in the past year, and most of those jobs have emigrated north. It is time to address this problem and save U.S. jobs.

Mr. Chairman, thank you for the opportunity to testify. I look forward to addressing any questions you may have.

[The prepared statement follows:]

Statement of the Hon. Jerry Weller, a Representative in Congress from the State of Illinois

Mr. Chairman,

Thank you for this opportunity to testify here today. I want to reintroduce to the Subcommittee an issue that I brought before the full Committee during the markup of the Financial Freedom Act of 1999. The issue is the loss of 20,000 American film industry jobs from runaway film production. I want to raise this issue to urge that our domestic film industry be given a seat at the table at the WTO talks in Seattle to address the cultural content issue and its relationship to runaway film production.

The problem with runaway film production is a growing National issue which directly impacts thousands of working Americans from New York to Florida; Washington to California, Illinois to Texas. During the committee discussion on the Financial Freedom Act, I offered an amendment to introduce a wage based tax credit and creative financing tax incentives to counter the loss of film production jobs to Canada.

Remember the film "Coming to America?" Unfortunately, its seems that film making jobs are now running from America. In fact, a one time Presidential candidate once referred to that giant sucking sound of jobs heading south-well that giant sucking sound is really the sound of 20,000 film jobs heading north to Canada.

A recent study commissioned by the Director's Guild of America and the Screen Actors Guild shows that in 1998 over $10 billion was lost to runaway economic film and television production. This is more than fivefold since the beginning of the decade. In the last four years, Texas has shown a 31% decrease in direct production revenues, while my state Illinois is down nearly 20%. This has resulted in a loss of 20,000 jobs nationally.

In looking at the small businesses and jobs lost by this phenomena, we are not just talking about directors and actors, rather we are talking about the small businesses that support the film industry and make America great. This includes: caterers, hotel and motel operators, restaurants and bars, rental equipment businesses, electricians, set construction workers and many others involved in this vitally important and culturally indigenous economic activity. Over the years, this industry has been a leading exporter and driver of small business job creation.

Mr. Chairman this is a constituent issue which we should take seriously. This is a constituent issue for you too. I come from a district which includes Joliet, Elwood and Calumet City, the home of Joliet Jake and Elwood Blues, which I often refer to as the "Blues Brothers" district. Last year, my constituents and I were stunned when they decided to make the film "Blues Brothers 2000," they choose to film it in Toronto rather than Chicago. Embarrassing was the fact that the Canadian filmmakers were calling the Chicago film commission to ask them how to best portray Chicago.

With my statement, I have included the Directors Guild and Screen Actors Guild study explaining the reasons why the film industry is moving out of the country, and they have concluded that one of the main reasons is the tax incentives offered