TESTIMONY OF HON. JOHN D. ROCKEFELLER IV, U.S. Senator ROCKEFELLER. Mr. Chairman, Senator Glenn, and members of the Committee, I will try to get right to the point. I think abolishing the Department of Commerce is an excellent way to strengthen our foreign competitors and weaken the United States economically and in terms of its technological and trade efforts. It is really hard for me to conceive of how proponents came up with this idea. At a time when our country has to compete with over 120 other nations that are aggressively marketing themselves and developing themselves, where is the logic in eliminating the single agency dedicated day in and day out to outdoing our competitors in export and trade? In just the last 2 years, the Department of Commerce has helped American firms land nearly $40 billion worth of contracts around the world which now support 300,000 jobs in this country, including many in my own State. At a time when technology is the proven key, and finally recognized as such, to America's economic growth, to success in selling products in foreign markets, and defines our national belief in what progress constitutes, that is, technological development, where is the sense in killing off a modest set of tools to help small and medium-sized businesses get a better handle on technology which would otherwise not be available to them? You know, it is very important to remember that the U.S. is not number one on this whole business of civilian technology. In fact, we are number 28 when it comes to the percentage of public research and development dedicated to civilian research. We are right there together with the Czech Republic. This just might be a clue in explaining why we have been slipping in our share of the world's market for aerospace, for electronics, and for advanced materials. We have recognized that now. Secretary Brown has recognized that, I think American industry has recognized that, and we have recognized that as a Congress and we are trying to do something about it. When we are fortunate to have one agency focused on American business and industry with a voice in the cabinet, a direct link, in this case, a very direct link to the President and proven clout in the world, how does one come up with the idea of getting rid of it except to feel better? If I believed in conspiracies, I would find myself thinking that the Chrysler-Dole-Abraham bill is some kind of a foreign plot to steal American jobs, break our trade laws, and force a technological and economic surrender. Resist the temptation, I would suggest, to flash in front of the American people an easy symbol of your commitment to deficit reduction and shrinking Government. Think of what you would feel about abolishing, as Senator Hollings said, the Department of Defense during the Cold War. This legislation before you is the same lunacy, suggesting economic disarmament at the very time when the United States should be beefing up our arsenal of trade enforcement, export promotion, technological investment, and local economic development. Mr. Chairman, in January, I took 33 West Virginia business people, 31 of whom had never been to Asia before, to Japan and Taiwan for the purpose of promoting West Virginia exports. We are not an ocean-bound State. We are back there landlocked. There is no way for me to describe to you the specific and direct help that the Department of Commerce was to us in preparing that trip and in carrying out that trip and in giving confidence and then results in terms of millions of dollars of products sold in Japan and Taiwan. We could not have even begun it without the Department of Commerce. For example, the Commerce Department's International Trade Administration and its network of commercial services based in the U.S. and in other countries were basic to these 33 folks from West Virginia, most of whom had not been elsewhere in Asia. The idea of eliminating the U.S.-based commercial service offices and abolishing the ITA, moving some of its pieces to other locations, is just extraordinary to me. Enact this bill and it means the end of this kind of service to a rural State where small businesses do not know how to begin to export, where some of us have put in legislation which causes the Export-Import Bank to work more closely with the Department of Commerce and the U.S. and Foreign Commercial Service so that they can be more valuable to small businesses who are not accustomed to exporting and do not even have the nerve to start to export unless they feel they have somebody on their side, and the U.S. Department of Commerce is on their side. I have many examples in West Virginia. I will not give them to you because my time is out, but I hear all this talk in Congress about devotion to business and especially to small business. Eliminating the one agency, Mr. Chairman, committed to this sector, in this case, small business, is a strange way to help them, because small business cannot afford to do this on their own or to hire the consultants. Mr. Chairman, in conclusion, I would say this is a feel-good bill, not a do-good bill. I think it should not pass. I thank the Chair man. [The prepared statement of Senator Rockefeller follows:] PREPARED STATEMENT OF SENATOR JOHN D. ROCKEFELLER IV Mr. Chairman, Senator Glenn, members of the Committee, thank you. I will get right to the point. Abolishing the Department of Commerce is an excellent way to strengthen our foreign competitors and weaken the United States economically. It is hard to even conceive how the proponents concocted this idea. At a time when our country has to compete with over 120 other nations for markets and jobs, where is the logic in eliminating the single agency dedicated, day in and day out, to outdoing our competitors in exports and trade? In just the last 2 years, the Department of Commerce has helped American firms land nearly $40 billion worth of contracts around the world, supporting 300,000 jobs in this country— the agency's annual budget is $4.2 billion, the smallest of any cabinet department. At a time when technology is the proven key to America's economic growth, to success in selling products in foreign markets, and defines our national belief in progress and innovation-where is the sense in killing off a modest set of tools to help small and medium-sized businesses get a better handle on technology, and to invest in longer-term R&D aimed at making major technological advances and ensuring that the U.S. will have the high-wage jobs and high-tech industries? Keep in mind that the U.S. is not number one, it is number 28 when it comes to the percentage of public R&D dedicated to civilian research. We're just ahead of the Czech Republic. This just might be a clue in explaining why we have been slipping in our share of the world markets for aerospace, electronics, and advanced materials. When we are fortunate to have one agency focused on American business and industry, with a voice in the Cabinet, a direct link to the President, and proven clout in the world, how does one come up with the idea of getting rid of it? If I believed in conspiracies, I would find myself thinking the Chrysler-Dole-Abraham bill is some kind of foreign plot to steal American jobs, break our trade laws, and force a technological and economic surrender. Resist the temptation to flash in front of the American people an easy symbol of your commitment to deficit reduction and shrinking government. Think of what you would feel about abolishing the Department of Defense at the height of the Cold War. This legislation before you is the same lunacy-suggesting economic disarmament at the very time when the United States should be beefing up our arsenal of trade enforcement, export promotion, technology investment, and local economic development. The businesses working hard to compete and prosper are not the ones asking you to eliminate the one agency that exists to work with them every single day. They are as hawkish about the federal budget as anyone. But they happen to know something about the difference between wasteful spending and sound investments. You have a mountain of letters and calls from the companies that don't want to see the jobs lost, the markets missed, the technological breakthroughs sacrificed that will happen if we don't have a Department of Commerce. The timing of your hearings is particularly striking and ironic to the state I represent. I spent the day yesterday hosting a visit to West Virginia by 12 officials from Japanese businesses, who are in my state to explore investment and sales opportunities. The visit is a direct offshoot of an historic trade mission of West Virginia business leaders-33 in all, from small, medium, and large companies-that I personally led to Japan and Taiwan in January. In 7 months, these West Virginia companies have already entered into contracts totalling over $4 million. I admit that Secretary Ron Brown's incredible success with his trade missions was one of the inspirations in our West Virginia trip, which we called "Project Harvest." But a major reason for the actual success-measured in hard dollars, contracts, and jobs-is the Department of Commerce's International Trade Administration and its network of commercial service offices based in the U.S. and other countries. As you know, the Chrysler-Dole-Abraham bill calls for abolishing the ITA, moving some of its pieces to other locations, and actually eliminating the U.S.-based Commercial Service offices. Enact this bill, and that means the end of the one based in Charleston, West Virginia. The office that in just 1 year, helped over 300 businesses learn what they need to know about cracking foreign markets. The office that this very minute is working with the 18 companies that went on my trade mission to Japan and Taiwan, and has been instrumental in the $4 million of business so far. Without ITA's network of Commercial offices here and abroad, I wouldn't be here reciting these results. Nor could the companies that now have contracts. Take Precision Samplers, whose president joined us on the mission. Two months later, this company won a $500,000 contract to supply coal sampling systems to Taiwan. There is also Walhonde Tools, a small company based in South Charleston, whose president, Mrs. Kay McClure, was introduced by the Department of Commerce's office to a Japanese company that has since signed on the dotted line for an initial purchase of tools. I would love to spend an entire day telling you about Touchstone Labs, a company that has gone from a three-person operation to employing 40. With help from Commerce's Economic Development Administration in the 1980s, Touchstone moved into a research park near Wheeling, West Virginia, and then turned to the Charleston commercial assistance office for advice on exporting. The result? A contract with a Swiss laboratory, to buy Touchstone's Fiber Push-Out Scanning Electron Microscope for $100,000. We have companies in West Virginia selling their products in Mexico, Saudi Arabia, Brazil, and all over the world, because of advice, information, and motivation they got directly from the U.S. and Foreign Commercial Service offices in Charleston, West Virginia and abroad. The contracts, the profits, and the jobs would not exist without our own Federal Government devoting specialists and resources to exactly this. I hear all this talk about the new Congress and its devotion to business, especially small businesses. Eliminating the one agency committed to this sector and American business interests around the world is a strange way to help them. Small businesses cannot afford to hire the consultants and globetrotters that the Department of Commerce makes available in every one of our states. This bill would eliminate these domestic offices completely. The Chrysler-Dole-Abraham bill lays out different fates for different parts of the Department of Commerce. Moving companies are certainly going to do well under this bill, because one result will be a lot of relocation and unnecessary disruption. Instead of housing export control, export promotion, trade enforcement, and other functions in an agency focused intensely on America's private sector and economic strength, the functions will be stuck into other buildings and agencies with different missions and histories. It sounds like a terrific way to ensure 10 years or more of confusion and distraction. In the meantime, our competitors will keep their eye on the ball, investing in civilian R&D, grabbing markets, and defending their own busi nesses. You may also hear from some witnesses who say a better way to organize federal trade functions is a Department of Trade. That sounds appealing. But launching new agencies while you're razing others does raise questions. In fact, there are very good arguments for separating the trade enforcement activities of our government from our trade negotiators and foreign policy makers. Having a separate cop on the beat, with less investment in how trade agreements got hammered out, and more investment in the follow-up, makes sense and more than that, it works. Listen to industries who have plenty to complain about when it comes to the international playing field of trade, like steel companies who know a lot about foreign dumping. They are not complaining about having a Department of Commerce making sure foreign companies comply with our trade laws and for American business interests. Mr. Chairman, this is a feel-good bill and not a do-good bill. Congress does not have the luxury of wasting time on symbolic ways to claim we're dealing with big challenges and real problems. Chopping up an agency, and eliminating some of the parts that have the highest payoffs in jobs and economic return, is not the way to deal with the deficit. Retreating economically as the world's competitors suit up would be destructive, to American businesses, workers, and families. We have a trade deficit of $166 billion to close, and that should be our focus. We have people who want higher wages-technology and increasing high-tech exports are their best hope. This is a time to encourage, not dismantle, the Department of Commerce, and ask for even more of the tangible dividends they are producing. I urge you to reject this dangerous idea. Chairman ROTH. Thank you, Senator Rockefeller. Our next speaker will be Senator Bond. We will be pleased to put your statement in full into the record. We are pleased to have you here as the one who heads the Small Business Committee. Senator Bond? TESTIMONY OF HON. CHRISTOPHER S. BOND, U.S. SENATOR FROM THE STATE OF MISSOURI Senator BOND. Thank you very much, Mr. Chairman, members of the Committee. I will need to submit my full statement because I have a lot to say, but fortunately, I will try to watch the lights and stay within the 5-minute time limit. I do Chair the Small Business Committee and I am here because of my concern for the assistance that the Commerce Department provides to small business. I also Chair the International Finance Subcommittee of the Banking Committee, which has jurisdiction over all of the Commerce Department trade agencies with the exception of the Import Administration function. I am here, however, not just because of the jurisdictional questions but because of my personal commitment to and experience in promoting exports and export opportunities, an endeavor I have shared with several members of this Committee. I believe that as we enter the 21st century, it is clear that the future of our economy depends upon the international marketplace. There is no question in my mind, if we are to remain the world's leading economy, then we will have to dominate the international marketplace as well as our own. The competition is going to be intense. Companies from other nations will come equipped with a wide array of tools provided by their nation's government, from concessional financing to market research to top-level sales help from senior government officials. If our companies are going to remain competitive, they must have access at least to the same tools. The International Trade Administration and the Bureau of Export Administration are the agencies that will help to provide our companies with that edge. S. 929 would eliminate large portions of the ITA, BXA, and disperse their remaining functions to other agencies throughout the Federal bureaucracy. These are the engines that drive the rest of the Federal Government's trade agencies. Without them, other agencies cannot function effectively. For that reason, last month I went to the floor and said, at an appropriate time, I will offer an amendment to this bill to strike the trade sections and replace them with language_creating a new, very small Department of International Trade. It is a simple proposition endorsed by a large part of the business community. These agencies work. They should not be split up. They should continue to have cabinet-level representation. My colleagues need to understand that ITA is responsible for supporting the activities of the U.S. Trade Representative, with sectoral and technical expertise. This bill does not recognize that fact. USTR is successfully performing a critical function but it only has 170 people. It could not handle all of our trade negotiations without significant support from ITA and the other agencies. Even more importantly, ITA is the Federal agency with primary responsibility for monitoring bilateral and multilateral trade agreements once they are in place. Elimination of the network of ITA specialists would severely hamper our ability to monitor trade agreements and ensure that other countries are playing by the rules. Secondly, this bill would effectively remove the Federal Government from providing export promotion and assistance for non-agricultural exports. Some Senators may agree with that. I do not. I think the economic battleground has moved solidly to the international marketplace and our future economic growth depends in large part on American firms winning their share of new markets developing in places like Indonesia, India, Brazil, and China, which have huge populations hungry for development. I can tell you that our large exporters can do the job themselves. They have the people; they have the staffs. But smaller and medium-sized businesses cannot do it without the kind of assistance that is now being provided by the trade agencies. Infrastructure needs in these countries alone are staggering. Competition for projects is intense. Companies from other nations will aggressively seek to win them, and they will go after the contracts with the active backing of their governments. Already, our companies are competing with fewer government resources than other governments give those who are competing with our businesses. If we send them in unarmed, they are not going to have a chance. 92-690 96-2 |